SSA Representative Payee Program: Addressing Long-Term Challenges Requires a More Strategic Approach
Released: 2013-06-05T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Representative Payees—persons who SSA staff appoint to manage Social Security benefits for those unable to do so for themselves—play an important role in ensuring that beneficiary needs are met. In fiscal year 2012, about 5.9 million payees managed $72 billion in annual benefits for nearly 8.4 million beneficiaries, a number that is likely to grow as the population ages. Congress and others have expressed concerns that SSA may not be well positioned to administer the Representative Payee Program, as currently structured, in the future. This report examines (1) administrative challenges facing the program and steps SSA has taken to address them and (2) long-term challenges and actions SSA has taken or could take to address them.

To answer these objectives, GAO reviewed relevant research, policies, federal laws and regulations, and other documents. GAO interviewed SSA officials and other parties, and visited the Philadelphia Regional Office. GAO also reviewed program trend data and studies on challenges associated with an aging population. GAO reviewed options SSA could consider to address program challenges and conducted interviews to identify the strengths and weaknesses of these options.

section_title: What GAO Found
paragraphs: The Social Security Administration (SSA) struggles to effectively administer its Representative Payee Program, despite steps taken to address its challenges in identifying, selecting, and monitoring representative payees. For example, due to increasing workloads and staff attrition, SSA field office managers in some offices said they sometimes have to perform payee program duties that lower level staff typically handle. SSA has also experienced an increasing number of beneficiaries who may not have a suitable payee available. In an effort to address this challenge, SSA hosted a webinar to recruit additional payees. However, SSA officials said this effort did not result in the addition of any new payees. SSA also faces challenges ensuring that payees who are selected are suitable for the task. To help address this challenge, SSA implemented a pilot program in its Philadelphia region to screen and bar payee applicants who have been convicted of certain crimes. The pilot relies on self-reported information from payee applicants, but SSA plans to screen applicants by accessing a commercial database that contains state-level criminal information. This database, however, does not contain information from every state and it is not clear how SSA will address this limitation. SSA also faces challenges monitoring payees' use of beneficiaries' SSA funds--a time-consuming process. SSA developed an electronic accounting process that allows payees to submit reports online, which saves SSA time on handling the reports and scanning paper reports. However, it does not lessen the need for SSA staff to review some of these reports. SSA has also taken other steps to improve the administration of the program, but the SSA Office of the Inspector General (OIG) nonetheless continues to identify the program as a major SSA management challenge.

Although changing demographics and resource constraints will challenge the future administration of the Representative Payee Program, SSA has done little to position itself for the long term. The projected growth in the aged population, as well as the incidence of individuals with dementia, will have implications for the program, as SSA will have to spend more resources finding and monitoring payees. These challenges are exacerbated by staff and resource constraints, which could make SSA less able to identify and address payee benefit misuse. Some of the steps SSA has taken align with goals in the agency's Strategic Plan. For example, SSA's piloting of a new payee screening and selection process is an effort to better protect the program from fraud, waste, and abuse--one of the objectives included in the plan. Nonetheless, SSA does not plan to assess whether the pilot actually reduces the incidence of benefit misuse in the long run. Further, SSA has not projected the future need for payees, the likely characteristics of beneficiaries, or the resources needed to administer the program. Others have identified a range of options that could help SSA address its long-term challenges by increasing its pool of payees and better targeting its monitoring practices. Experts and stakeholders we interviewed identified trade-offs for each of these options, citing the need to balance the potential benefit of reducing SSA's workloads with the possible increased risk of benefit misuse by payees. SSA has considered some options, but it has not fully assessed and compared the potential benefits and feasibility of implementing these options.

section_title: What GAO Recommends
paragraphs: GAO recommends that SSA (1) evaluate the effectiveness of its criminal bar pilot, (2) estimate long-term program needs, and (3) develop a long-term strategy for addressing challenges that includes assessing options to streamline the program. SSA agreed with all three recommendations.

section_title: Letter
paragraphs: The Social Security Administration’s (SSA) Representative Payee  Program appoints representative payees (payees) to manage the Old- Age, Survivors, and Disability Insurance (OASDI) and Supplemental  Security Income (SSI) benefits received by individuals who are unable to  do so for themselves. Typically, SSA appoints a spouse, parent, or other  close relative to be the payee, but may also appoint another individual, a  public or nonprofit agency, or another organization, depending on the  beneficiary’s circumstances. Payees can only use SSA benefits to  provide beneficiaries with food, clothing, shelter, medical care, and  personal comfort items. SSA reported that, in fiscal year 2012, about 5.9  million payees managed $72 billion in annual benefits for nearly 8.4  million beneficiaries (14 percent of all SSA beneficiaries). Consistent with  the growth in the overall number of SSA beneficiaries, the number of  beneficiaries needing a payee has grown over the years—by nearly 20  percent between 2002 and 2011.

In addition to the broader implications of sustained program growth,  Congress and others have expressed concerns that SSA may not be well  positioned to administer the Representative Payee Program, as currently  structured, in the future. In light of these concerns, this report examines  the  (1) administrative challenges facing the Representative Payee Program  and steps SSA has taken to address them, and  (2) long-term challenges and actions SSA has taken or could take to  address them.

To identify the administrative challenges facing the Representative Payee  Program, we reviewed reports by SSA’s Office of the Inspector General  (OIG), the National Research Council (NRC), and others. We  interviewed SSA officials, including field office managers from 6 of SSA’s  10 regions,from the Social Security Advisory Board (SSAB). We also visited the  Philadelphia Regional Office to learn about SSA’s ongoing pilot initiative  to screen and bar certain types of criminals from becoming payees. We  obtained more detailed information from the OIG on their past findings  and recommendations relevant to the administration of the program and  met with members of the NRC to better understand the impetus for their  recommendations in this area. Furthermore, we reviewed beneficiary and  payee data from annual SSA reports to describe beneficiary and payee  trends. We assessed the reliability of the data by reviewing the  methodology used to develop them and determined that the data were  sufficiently reliable to describe payee trends and beneficiary trends and  projections.   and others knowledgeable about the program such as staff  To identify the long-term challenges facing the Representative Payee  Program, we reviewed reports on the payee program and interviewed  SSA, NRC, and Social Security Advisory Board officials, as well as  experts and members of organizations knowledgeable about the program.  To determine the actions SSA has taken or could take to position itself to  address the program’s long-term challenges, we reviewed relevant  program policies and procedures and interviewed SSA officials. In  addition, we reviewed relevant federal laws and regulations governing the  Representative Payee Program to gain a further understanding of  program requirements. We also reviewed reports on the payee program,  as well as literature on similar programs, to identify options SSA could  consider to address the long-term challenges facing the program. We  interviewed experts and members of organizations knowledgeable about  the program to obtain their views on the potential strengths and  weaknesses of each option identified. Although these views represent  many points of view, they are not representative of all potential views.

We conducted this performance audit from April 2012 to May 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe the  evidence obtained provides a reasonable basis for findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Beneficiaries needing a payee fall into one of three basic categories: (1)  child beneficiaries—almost all children under age 18 have payees,those who are legally incompetent or mentally incapable of managing  benefit payments, and (3) beneficiaries who are physically incapable of  managing or directing the management of their benefit payments. SSA  claims representatives determine whether a beneficiary needs a  representative payee by reviewing court determinations of legal  incompetency, medical evidence, or statements of relatives, friends, or  others who know and observe the beneficiary concerning the  beneficiary’s ability to manage or direct the management of his or her  benefits. In December 2012, over 8.6 million individuals had a  representative payee—over 5.3 million received only OASDI benefits,  almost 2.5 million received only SSI benefits, and over 830,000 received   (2)

OASDI and SSI concurrently. See figure 1 for an overview of the  percentage of beneficiaries with a payee, by benefit type and age.

According to SSA data, about 76 percent of SSI recipients and Disability  Insurance beneficiaries who had a payee in 2011 suffered from a mental  health condition. The most prevalent condition for each of these  beneficiary groups was intellectual disability. As of January 2013, family  members served as representative payees for about 85 percent of  beneficiaries who had a payee.

SSA may appoint an individual or organization to be a representative  payee. Organizational payees—which can include social service  agencies, state mental institutions, and state or local government  agencies—may offer their services free of charge or they may collect a  capped fee, provided they meet certain conditions. Certain individuals  are not eligible to serve as representative payees. For example, in order  to be eligible to serve as a representative payee, an individual cannot be  a fugitive felon or have been convicted of certain felonies, including  those related to Social Security fraud, misuse of SSA benefits, or  concealing or failing to disclose knowledge of events affecting entitlement  to or payment of Social Security benefits.

SSA administers the Representative Payee Program through a network of  over 1,200 field offices located across the country. According to SSA and NRC officials, the process for administering the program consists of  many time-consuming and often complicated steps, guided largely by  requirements in statute and SSA regulations. These steps are primarily  completed by field office claims representatives who are also responsible  for other work processes, such as interviewing individuals to determine  their eligibility for OASDI and SSI benefits. According to SSA’s  guidance,payee, SSA staff perform the following activities:   once a beneficiary is determined to need a representative  1.  Identify Potential Payees  SSA claims representatives use a variety of approaches to identify  prospective payees, including asking the beneficiary if there is an  individual whom he or she trusts; reviewing beneficiary claims files and  any available medical records; and consulting with local government,  social service, and other providers who can often provide payee contacts.  If no payee is readily available, the claims representative tries to find a  payee by consulting the list of payee sources (e.g., local organizations  with volunteers who can serve as payees) that each field office is required  to maintain.  2.  Screen Potential Payees  After identifying prospective payees, claims representatives interview  them to assess their suitability, considering factors such as the nature of  their relationship to the beneficiary and whether they are knowledgeable  about the beneficiary’s needs. In addition, claims representatives receive  automated messages during the screening process that show whether a  prospective payee is a fugitive felon or otherwise prohibited by law from  serving as a representative payee.  3.  Appoint a Payee  SSA’s guidance includes preference lists to assist claims representatives  in selecting a payee when more than one candidate is available. For  example, the preference list for adults is as follows:  (1) a spouse, parent or other relative with custody or who shows    (2) a legal guardian/conservator with custody or who shows strong   (3) a friend with custody; (4) a public or nonprofit agency or institution;  (5) a federal or state institution; (6) a statutory guardian; (7) a voluntary conservator; (8) a private, for-profit institution with custody and is licensed  (9) a friend without custody, but who shows strong concern for the            beneficiary’s well-being, including persons with power of    attorney;      (10) anyone not listed above who is qualified and able to act as     payee, and who is willing to do so; and  (11) an organization that charges a fee for its service.

Although claims representatives are generally expected to select payees  in the order in which they are listed, they may deviate from this order  based on their assessment of the beneficiary’s individual circumstances.  In selecting a payee, claims representatives are primarily concerned with  identifying someone who will best serve the beneficiary’s interest.

SSA staff monitor payees to identify potential misuse—the use of SSA  funds for purposes other than the needs of the beneficiary. SSA field  office and other staff monitor payees by reviewing the annual accounting  reports that payees submit to document how the payee spent Social  Security funds on behalf of the beneficiary. Certain payees are also  subject to periodic site reviews. For example, individuals serving as a  payee for 15 or more beneficiaries and certain organizational payees,  including agencies that serve 50 or more beneficiaries, are subject to  these reviews.

section_title: SSA Has Taken Some Steps to Address the Current Challenges It Faces in Identifying, Selecting, and Monitoring Representative Payees
paragraphs: SSA has faced challenges identifying, selecting, and monitoring  representative payees. For example, field office managers said that some  field offices have been struggling to keep up with payee program  workloads due to staff attrition and that managers themselves sometimes  have to perform payee program duties that claims representatives  typically handle, such as processing payee applications. In addition, SSA  has experienced an increasing number of beneficiaries, such as persons  suffering from mental health conditions or the elderly, who may not have  a suitable payee readily available. Recognizing the challenges associated  with finding payees for some beneficiaries, SSA attempted to identify and  recruit individuals and organizations who would be willing to serve as  payees. For example, SSA partnered with the National Alliance on Mental  Illness in 2012 to host a webinar to recruit additional payees for  beneficiaries suffering from mental health conditions. However, as of April  4, 2013, SSA officials said this effort did not result in the addition of any  new payees. SSA officials told us that they posted the webinar to  YouTube in an effort to reach a larger segment of the population.

SSA has also taken steps to address challenges it has had with ensuring  that payees who are assigned are suitable for the task. For instance, in  June 2012, SSA initiated a pilot in its Philadelphia region to screen and  block payee applicants who have been convicted of any 1 of 12 types of  felonies. Under the pilot, SSA field staff are required to bar certain  payee applicants who have committed one or more of these crimes.  According to SSA officials, as of January 23, 2013, SSA staff in the  Philadelphia region barred 108 out of 10,291 applicants from serving as  payees as a result of the pilot. SSA said that the pilot primarily relies on  self-reported information from payee applicants. In our past work, we  found that reliance on self-reported information alone can be problematic  because it may not be accurate. In April 2013, SSA published a notice  in the Federal Register that agency officials said would allow them to  collect data necessary to use Lexis/Nexis Accurint, a database that  contains state-level felony and misdemeanor information, to perform  criminal background checks on payee applicants. According to SSA  officials, the agency is currently testing an automated tool to query the  Accurint database as well as developing field office procedures and  training materials. SSA plans to begin using the database to screen  payee applicants in the summer of 2013. Although the database could  help SSA staff in the Philadelphia region better screen payee applicants,  it is limited because it does not contain data from every state. It is not  clear how, if at all, SSA is going to address these limitations. SSA said  the focus of the pilot is to determine how easily these additional controls  can be implemented. For example, SSA is interested in determining how  difficult it is for field staff to find a suitable alternative payee after they bar  a payee applicant.implemented nationwide in fiscal year 2014.

According to SSA, if the pilot is successful it will be  SSA has also taken steps to improve its ability to monitor payee activities.  Generally, all representative payees are required to file an annual  accounting report that shows how they spent beneficiaries’ SSA funds.  According to SSA officials and the OIG, obtaining these reports, reviewing  them, and following-up on delinquent reports is extremely time-consuming  for staff. For example, the OIG found that SSA staff expend considerable  effort to obtain accountings, which sometimes required multiple mailings,  telephone calls, and face-to-face meetings, and, in some instances, took  several months to complete. process that allows payees to submit reports online, which saves SSA  time on handling the reports and scanning paper reports. However, it  does not lessen the need for SSA staff to review some of these reports.

SSA OIG, Annual Representative Payee Accounting Report Non-responders, A-06-10- 11069 (March 2011). (nearly 40 percent of all reviews). Based on their testing of the model,  SSA officials expect it to identify many more instances of payee benefit  misuse than random reviews. However, SSA officials said they have not  yet completed a sufficient number of reviews to determine whether the  model is performing as expected.

SSA has taken other steps to help it improve the management and  operations of the Representative Payee Program. For example, SSA is in  the process of redesigning its Representative Payee System—the  electronic system used to record payee applications, payee performance,  and any significant information about the payee, among other things. SSA  has also provided additional guidance and training to payees and field  office staff to help them better understand their roles and responsibilities,  as well as implemented other actions to address numerous  recommendations made by the SSA OIG. Nonetheless, the OIG  continues to identify the program as a major management challenge  facing SSA.

section_title: SSA Has Done Little to Position Itself to Address the Program’s Long-Term Challenges
subsections: section_title: Changing Demographics and Resource Constraints Pose Long-Term Challenges for the Representative Payee Program
paragraphs: Changing demographics will challenge SSA’s ability to effectively  administer its Representative Payee Program in the future. The  proportion of elderly individuals is projected to grow to nearly 20 percent  of the total population over the next two decades. As a result, it is  estimated that not only could the number of SSA beneficiaries grow by as  much as 55 percent, but that the number of aged beneficiaries could  increase from over 38 million in 2012 to over 72 million in 2035. This  projected growth in the number of beneficiaries, especially the increase in  the proportion of aged beneficiaries, will have implications for the  Representative Payee Program (see fig. 2).

While age alone does not determine one’s capability to manage personal  finances, research shows that the incidence of Alzheimer’s and other  forms of dementia that undermine judgment increases with age.Researchers estimate that, by 2025, the number of people aged 65 years  and older with Alzheimer’s could increase by as much as 30 percent— from the 5.2 million persons affected in 2012 to 6.7 million. Given the  projected growth in the aged population, SSA will likely be challenged to  locate more payees as well as monitor a greater number of them in the  future.

Staff and resource constraints also present challenges for the future  administration of the Representative Payee Program. For example, the  impacts of a hiring freeze and anticipated retirements of SSA staff will  further impair the agency’s ability to effectively manage the program—a  problem common to other SSA workloads, such as claims processing. In  fact, in 2009 we reported that staffing constraints were having adverse  effects on SSA field office services and that field office staff were having  to defer some of the work they considered of lower priority. More recently, field office managers we spoke with said that, to the extent that  SSA field offices are required to do progressively more with limited staff  and resources, they will be less likely to identify and address instances of  payee benefit misuse.

section_title: SSA Has Not Engaged in Long-Term Planning for the Representative Payee Program
paragraphs: SSA has not developed a comprehensive plan for addressing the  challenges the Representative Payee Program faces over the long term.  SSA’s Strategic Plan notes the future challenges, including growing  workloads and limited resources, facing all of its programs. Even though  representative payee activities are not specifically mentioned in the plan,  according to SSA, these activities align with the plan’s goal to preserve  the public’s trust in its programs by (1) simplifying and streamlining how  SSA does its work and (2) protecting programs from waste, fraud, and  abuse. SSA officials said, for example, the Philadelphia criminal bar pilot  and the application of a misuse predictive model to select payees for  review using selected beneficiary and payee characteristics are steps the  agency is taking to better safeguard beneficiaries. While SSA plans to  assess how easily the pilot can be implemented, it has no plans to  determine whether the pilot actually reduces the incidence of benefit  misuse by payees in the long-run. We have previously reported that  program evaluation can play a key role in long-term planning efforts by  providing feedback on both program design and execution, including  whether an agency’s efforts are effective in resolving a problem or filling a  need.

Furthermore, SSA has done little long-term planning to address the  workload challenges the Representative Payee Program faces. SSA  acknowledged the need to better understand the future needs of the  program, but it has not determined how many beneficiaries will likely need  payees in the future and their characteristics. GAO’s standards for  internal control state that an agency should assess the risks it faces from  both external and internal sources.  While the reasons for the potential  growth in the program fall beyond SSA’s control, such as an increase in  older beneficiaries, assessing this growth can affect the program’s  chances for success. Agencies can use such assessments to assist them  in determining how to best manage risk, as well as the staff skills and  resources needed to address operational challenges for the short- and  long-term. Some experts have suggested that the payee program does  not garner attention from SSA because the agency considers it a lower  priority than other SSA activities such as claims processing.

section_title: Others Have Identified a Range of Options That Could Address SSA’s Long- Term Challenges
paragraphs: GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1  (Washington, D.C.: November 1999). each of the options, mostly related to balancing SSA’s efforts to  streamline and simplify the program while adequately protecting  beneficiaries from fraud and abuse. Additionally, more than one  programmatic change may be necessary to best position SSA to meet its  growing workload demands. These options, as well as interviewees’  views on them, are described below.

As noted earlier, SSA’s most recent efforts to recruit more payees have  not been very successful. The lack of additional payee volunteers may be  because local service providers, such as those that serve individuals with  developmental disabilities or the elderly, are facing similar resource  constraints as SSA. Many interviewees said that it might not be cost- effective for SSA to invest its scarce resources on an effort that would  likely yield few volunteers. Two interviewees suggested that, if SSA were  to pursue this option, the agency should pilot it first. Most interviewees  agreed that contracting out responsibility for developing and maintaining a  pool of payees would be more cost-effective for SSA than performing  these activities itself. Using an outside entity would also allow SSA staff to  focus on other tasks, and the agency could hold the contractor  accountable for maintaining a pool of qualified payees. For example, SSA  could require the contractor to find qualified payees who would commit to  serving as payees for a specified amount of time. Additionally, SSA could  structure the contract so that it emphasizes the need to find payees for  certain beneficiary groups such as the elderly or persons with  developmental disabilities.

Under federal law, a payee can only qualify to collect a fee from a  beneficiary if the payee is (1) a state or local government agency with  fiduciary responsibilities whose mission is to carry out income  maintenance, social service, or health care-related activities or (2) a tax- exempt community-based nonprofit social service organization that is  bonded and licensed (provided licensing is available) in the state where  they serve as a payee. The organization must also regularly provide  payee services concurrently to at least five beneficiaries and generally  may not be a creditor of the beneficiary. In 2013, fee-for-service payees  could collect up to 10 percent of a beneficiary’s benefit up to a maximum  of $39 per month, and up to $76 if they serve as a payee for a person  suffering from drug addiction or alcoholism. Changing the law to allow  more organizations to collect a fee could enable SSA to access a larger  pool of potential payees. Some interviewees cautioned that permitting a  broader range of organizations to collect a fee could, however, create a  perverse incentive for organizations to create a payee “business” where  the focus would be on serving a larger number of beneficiaries rather than  the best interests of beneficiaries. Lastly, this option could negatively  affect beneficiaries since the fee is deducted from their SSA benefit.  Some interviewees suggested that SSA could offset this potentially  negative effect on beneficiaries by paying the fee from SSA funds,  although SSA noted that this would require a statutory change.

Courts in each state have the authority to appoint a guardian or  conservator for individuals the court determines to be incapacitated.  Generally, guardianships are legal relationships created when a state  court grants one person or entity the authority and responsibility to make  decisions in the best interest of an incapacitated individual concerning his  or her person or property. Automatically selecting a person legally  designated to manage the beneficiary’s assets, such as a guardian, to  serve as a representative payee would not only lessen the time staff  spend on screening payees, but could also reduce potential redundancies  in screening procedures between SSA and state courts. However, the  potential benefit of this option cannot be fully assessed because SSA  officials said they do not have data on the number of guardians who  currently serve as payees. Despite its potential benefits, this option could  also face implementation challenges because some guardians may not  want to serve as payees due to administrative program requirements.  Further, automatically appointing individuals to serve as payees without  screening them could be problematic because screening and eligibility  criteria for guardians vary by state with some states having more stringent  procedures than others.

In 2009, SSA submitted a legislative proposal to Congress to eliminate  the statutory requirement that payees who are custodial parents of  children who receive benefits, or spouses who live with a beneficiary, file  annual accountings. If enacted, such a change could reduce SSA’s  workload because, as noted earlier, SSA spends a considerable amount  of time obtaining and reviewing accounting reports and family members,  primarily parents and spouses, serve 85 percent of beneficiaries who  have payees. Nonetheless, annual accounting reports serve as an  important reminder that SSA funds should be used for the beneficiary. An  alternative that would lessen SSA’s workload burden while maintaining a  level of accountability would be for SSA to reduce the frequency of  accountings for custodial parents and spouses. To date, Congress has  not enacted SSA’s legislative proposal.

Eliminating or limiting monitoring practices for payees who already  oversee a beneficiary’s assets by virtue of their status as a guardian or  power of attorney could create many of the same challenges that might  exist if SSA were to automatically appoint these groups without screening  them. For example, although SSA initially might be able to save  resources by not monitoring selected categories of payees, there could  be long-term costs resulting from increased instances of payee fraud,  waste, and abuse. Relying on state court monitoring also replaces a  national framework with a variety of state practices, which could result in  different standards for oversight and potentially make some beneficiaries  more vulnerable to having their funds misused. Further, we previously  reported that states face challenges adequately monitoring guardians and  that persons with power of attorney can easily exploit beneficiaries.

As previously noted, all payees are generally required by law to submit  annual accounting reports for review by SSA. To better target its  accounting reviews to payees who are most likely to misuse benefits  based on the misuse predictive model described earlier, SSA could seek  legislative changes to this requirement. This could allow SSA to focus its  attention on areas of greater risk. During our review, SSA said that it is  too soon to determine whether expansion of the risk-based targeting  approach would be effective.

SSA currently contracts with the National Disability Rights Network  (NDRN) to coordinate and oversee the completion of onsite reviews of  selected organizational payees by state protection and advocacy  agencies.review reports from the protection and advocacy agencies under this  contract. As a result of these reviews, SSA referred 356 cases to the field  offices to follow up on a range of payee issues, including incorrect bank  account titling and payees not properly documenting beneficiary  expenses. SSA also began investigating 13 payees for benefit misuse.  Some experts have suggested that expanding NDRN’s contract to have it  conduct site reviews for other payees, such as individuals, could help  lessen the challenges SSA faces in conducting these reviews. Another  alternative, which is being used by some courts are volunteer  guardianship monitoring programs, would be to identify and train a pool of   As of November 2, 2012, SSA had received 557 payee  volunteers to assist with monitoring. Under such an approach, SSA could  work with volunteer organizations to train and certify individuals to monitor  payees. With both of these options, SSA would still have to devote  some level of staff and resources to addressing any findings identified  during the reviews.

More than half of all beneficiaries with a payee are under the age of 18  and nearly 90 percent of these beneficiaries had their parent as a payee  in 2011. According to SSA, custodial parents generally serve  appropriately as payees for their children. Allowing custodial parents to  automatically receive benefits on behalf of their children would reduce  SSA staffs’ responsibility to screen and monitor parent payees, thus  potentially freeing up staff and program resources to focus on aspects of  the program SSA considers high need or high risk. This option would also  decrease the burden on parents by not requiring them to apply to be their  child’s payee or file annual accounting reports. According to a  Department of Veterans Affairs’ (VA) official, the department does not  require custodial parents to serve as payees for minors who receive  monthly benefits. Nonetheless, eliminating the requirement that parents  be assigned as payees also eliminates any safeguards—screening and  monitoring—that would help to ensure that children’s benefits are being  used on their behalf.

GAO and various experts have long recognized the need for better  coordination and exchange of information between SSA and other entities  that serve SSA beneficiaries and have made recommendations for SSA  to share information with these entities to the extent permitted by law. For  example, we reported in 2004 that the lack of systematic coordination  weakens the oversight of incapacitated people and may leave them at  risk of not being assigned a payee or guardian despite having been  identified as needing one. We further reported that insufficient  interagency coordination may leave incapacitated people more vulnerable  to abuse or neglect. Interviewees generally agreed that developing  better relationships on payee matters with state and local entities is an  important step toward helping SSA manage the program and leverage its  constrained resources; however, several interviewees said there may be  some challenges to sharing information on payee matters such as privacy  issues and developing a data sharing mechanism. Sharing information  could lessen the time SSA staff spend on screening payees and following  up on delinquent accounting reports. For example, SSA could use  information from state courts to determine whether or not to appoint a  guardian as a payee or to better target its monitoring practices.

SSA has acknowledged that changes to the Representative Payee  Program are needed to address its growing workloads and effectively  manage the program, but told us that few of the options identified are  currently under consideration by the agency. For example, SSA has  recognized the potential benefits of some of these options, such as  limiting parental accounting requirements and developing a pool of  payees for hard to serve beneficiaries, and has taken steps toward  implementing them. Nonetheless, SSA officials said they cannot  implement several options, such as automatically assigning payees  without screening them or limiting accounting requirements for certain  groups of payees because they are statutorily required to conduct these  activities. They also indicated that some of these options would not help  SSA administer the program more effectively or would be too costly. For  example, SSA said that creating a data sharing mechanism with state  courts would cost too much; however, it has not formally or systematically  estimated the cost of sharing this information. Some experts we spoke  with highlighted the need for SSA to examine alternatives to manage the  payee program. Further, GAO’s internal controls guidance states that  agencies should determine what actions they should take to manage  program risk. GAO has also reported that without effective short- and  long-term planning, which takes into account the changing environment,  federal agencies risk delivering programs and services that may not meet  critical needs.feasibility of these options or begun to explore other alternatives that  could help it address the current and growing demands of the program.  Such an assessment would inform the types of actions that SSA should  take, including whether the agency should pursue developing legislative  proposals for changes.

section_title: Conclusions
paragraphs: Given the significant role that payees play in the lives of many SSA  beneficiaries, it is imperative for SSA to take a long-term strategic  approach to position itself to administer the Representative Payee  Program effectively in the future. Over the years, SSA has taken  important steps to improve the program in an effort to prevent misuse of  benefits by payees. However, if SSA fails to evaluate the effectiveness of  these changes, such as those in its Philadelphia pilot, in actually  preventing misuse, SSA runs the risk of wasting its scarce resources on  activities that may be ineffective over the long term.

SSA’s lack of long-term planning could also render it unable to effectively  administer the program and expose an already vulnerable population to  misuse of their benefits. Without a clearer assessment of the future need  for payees, SSA runs the risk of not being prepared to serve a growing  number of aged beneficiaries whose needs often differ from those of  beneficiaries typically served by SSA staff. In addition, SSA may be  unable to ensure that there are enough payees available and that  beneficiaries’ funds will be adequately protected from misuse. Lastly,  because of its lack of long-term planning, SSA may be limited in its ability  to make effective decisions about how to modify the program going  forward.

While there are no simple fixes to help SSA manage its growing program  workloads, SSA has demonstrated that it cannot effectively administer the  program within its current resources and structure. Experts have identified  a range of possible options that SSA could consider to meet its goals of  streamlining the program and protecting beneficiaries from misuse.  Nonetheless, if SSA does not assess the potential costs and benefits of  different alternatives and pursue operational and program design  changes the agency deems to be feasible and cost-effective, it will miss  an opportunity to better position itself to meet its service delivery  challenges in the future.

section_title: Recommendations for Executive Action
paragraphs: To better position itself to address its growing challenges with  administering the program while protecting individuals’ benefits from  misuse, we recommend that the Commissioner of SSA direct the Deputy  Commissioner, Retirement and Disability Policy, to work with relevant  SSA offices to  1.  systematically evaluate the effectiveness of SSA’s criminal bar pilot to  help ensure that it meets its intended purpose of preventing misuse;  2.  estimate the long-term increase in the number of individuals who will  need a payee and their demographic characteristics, as well as the  resources that will be needed to meet this increase in demand; and  3.  develop a long-term strategy for addressing these challenges that  includes developing and testing a range of alternatives that could  streamline program processing to determine and compare their  feasibility and their potential impact on processing times and risk of  benefit misuse.

section_title: Agency Comments
paragraphs: We provided a draft of this report to the Commissioner of SSA for review  and comment. In its written comments, reproduced in appendix II, SSA  agreed with all three of our recommendations. In responding to our draft  report, SSA noted that the agency expects to complete an evaluation of  the criminal bar pilot in fiscal year 2014, before implementing the policy  nationwide. In addition, SSA said that it is currently working to estimate  the number of beneficiaries who will need a payee and will use this  information to develop long-term strategies for addressing Representative  Payee Program challenges. Finally, SSA said it is considering alternatives  to streamline its processes and improve its monitoring. SSA also provided  technical comments that we have incorporated, as appropriate.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Commissioner of  Social Security. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7215 or bertonid@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  reported are listed in appendix III.

section_title: Appendix I: Methodology for Identifying Options and Their Strengths and Weaknesses
paragraphs: We identified options that the Social Security Administration (SSA) could  consider to address the Representative Payee Program’s long-term  challenges by reviewing prior reports on the program such as the National  Research Council’s 2007 review of the program; Social Security Advisory  Board reports, SSA Office of the Inspector General, and GAO reports;  and other reports. We also sought input from experts, members of  organizations familiar with the program, and SSA field office managers  from 6 of the 10 regions (interviewees). These sources offered numerous  options to address long-term challenges facing SSA’s Representative  Payee Program. We selected options that could assist SSA in managing  its growing workload, including options that directly address the growing  need for payees and SSA’s challenges in monitoring these payees. We  combined some options that were similar in nature to reduce the number  of options to a reasonable amount for interviews. We also eliminated  actions that SSA has already implemented.

We selected a nongeneralizable sample of experts who had conducted  research on the Representative Payee Program (or similar programs  such as guardianship programs), served on Advisory panels, or who are  affiliated with an organization that represents persons who may need  payee services (see table 2 for a list of entities). In addition, we selected a  group of interviewees to help ensure a range of viewpoints. Specifically,  we interviewed persons who work with different beneficiary groups such  as the aged, persons with developmental disabilities, persons with  substance abuse, and others. They also represented different interactions  with the program such as the court perspective, SSA’s field office  perspectives, beneficiary perspectives, and payee perspectives. Although  many points of view were represented by our interviewees, they may not  represent the complete range of views on the options.

We conducted 14 semi-structured interviews to identify strengths and  weaknesses of the options, including the likelihood that the option would  help SSA address the growing demand for payees and increased staff  workloads, their cost-effectiveness, and feasibility. In some instances,  these interviews included several members from the organization and the  views expressed were those of the individuals who participated in the  interview, not those of their organizations. We did not conduct an  independent review of the feasibility or potential impact of any of these  options. GAO is not recommending or endorsing the adoption of any of  these policy options in this report.

We conducted this performance audit from April 2012 to May 2013 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe the  evidence obtained provides a reasonable basis for findings and  conclusions based on our audit objectives.

section_title: Appendix II: Comments from the Social Security Administration

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov.

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Clarita Mrena (Assistant  Director), Sherwin Chapman, and Nyree Ryder Tee made significant  contributions to this report, in all aspects of the work. Also contributing to  the report were Rachel Beers, Gary Bianchi, David Chrisinger, Brittni  Milam, Mimi Nguyen, Almeta Spencer, Vanessa Taylor, Roger Thomas,  and Walter Vance.

section_title: Related GAO Products
paragraphs: Human Services: Sustained and Coordinated Efforts Could Facilitate  Data Sharing While Protecting Privacy. GAO-13-106. Washington, D.C.:  February 8, 2013.

Elder Justice: National Strategy Needed to Effectively Combat Elder  Financial Exploitation. GAO-13-110. Washington, D.C.: November 15,  2012.

Supplemental Security Income: Better Management Oversight Needed for  Children’s Benefits. GAO-12-497. Washington, D.C.: June 26, 2012.

Designing Evaluations: 2012 Revision. GAO-12-208G. Washington, D.C.:  January 2012.

Incapacitated Adults: Oversight of Federal Fiduciaries and Court- Appointed Guardians Needs Improvement. GAO-11-678. Washington,  D.C.: July 22, 2011.

Elder Justice: Stronger Federal Leadership Could Enhance National  Response to Elder Abuse. GAO-11-208. Washington, D.C.: March 2,  2011  Guardianships: Cases of Financial Exploitation, Neglect, and Abuse of  Seniors. GAO-10-1046. Washington, D.C.: September 30, 2010.

Social Security Administration: Service Delivery Plan Needed to Address  Baby Boom Retirement Challenges. GAO-09-24. Washington, D.C.:  January 9, 2009.

Guardianships: Collaboration Needed to Protect Incapacitated Elderly  People. GAO-04-655. Washington, D.C.: July 13, 2004.


Question-summary annotations: questions: question: How effectively does the SSA administer its Representative Payee Program?
answer: The Social Security Administration (SSA) struggles to effectively administer its Representative Payee Program, despite steps taken to address its challenges in identifying, selecting, and monitoring representative payees. For example, due to increasing workloads and staff attrition, SSA field office managers in some offices said they sometimes have to perform payee program duties that lower level staff typically handle.
child_questions: question: What challenges does SSA face due to increasing number of beneficiaries?
answer: SSA has also experienced an increasing number of beneficiaries who may not have a suitable payee available.
child_questions: question: How did SSA address this challenge?
answer: In an effort to address this challenge, SSA hosted a webinar to recruit additional payees.

question: How successful was this effort?
answer: However, SSA officials said this effort did not result in the addition of any new payees.

question: How did SSA address payee selection?
answer: SSA also faces challenges ensuring that payees who are selected are suitable for the task. To help address this challenge, SSA implemented a pilot program in its Philadelphia region to screen and bar payee applicants who have been convicted of certain crimes. The pilot relies on self-reported information from payee applicants, but SSA plans to screen applicants by accessing a commercial database that contains state-level criminal information.
child_questions: question: What limitations exist in this database?
answer: This database, however, does not contain information from every state and it is not clear how SSA will address this limitation.

question: What challenges does SSA face regarding payee monitoring?
answer: SSA also faces challenges monitoring payees' use of beneficiaries' SSA funds--a time-consuming process.
child_questions: question: How did SSA address this problem?
answer: SSA developed an electronic accounting process that allows payees to submit reports online, which saves SSA time on handling the reports and scanning paper reports.  However, it does not lessen the need for SSA staff to review some of these reports.

question: What is OIG's stance regarding SSA?
answer: SSA has also taken other steps to improve the administration of the program, but the SSA Office of the Inspector General (OIG) nonetheless continues to identify the program as a major SSA management challenge.

questions: question: How well has SSA prepared for the future?
answer: Although changing demographics and resource constraints will challenge the future administration of the Representative Payee Program, SSA has done little to position itself for the long term.
child_questions: question: What factors will cause issues for the SSA in the future?
answer: The projected growth in the aged population, as well as the incidence of individuals with dementia, will have implications for the program, as SSA will have to spend more resources finding and monitoring payees. These challenges are exacerbated by staff and resource constraints, which could make SSA less able to identify and address payee benefit misuse.

question: What steps has the SSA taken?
answer: Some of the steps SSA has taken align with goals in the agency's Strategic Plan. For example, SSA's piloting of a new payee screening and selection process is an effort to better protect the program from fraud, waste, and abuse--one of the objectives included in the plan.
child_questions: question: How does the SSA plan to assess the pilot?
answer: Nonetheless, SSA does not plan to assess whether the pilot actually reduces the incidence of benefit misuse in the long run. Further, SSA has not projected the future need for payees, the likely characteristics of beneficiaries, or the resources needed to administer the program.

question: What alternative solutions exist for the SSA?
answer: Others have identified a range of options that could help SSA address its long-term challenges by increasing its pool of payees and better targeting its monitoring practices. Experts and stakeholders we interviewed identified trade-offs for each of these options, citing the need to balance the potential benefit of reducing SSA's workloads with the possible increased risk of benefit misuse by payees.
child_questions: question: In what ways has SSA considered these suggestions?
answer: SSA has considered some options, but it has not fully assessed and compared the potential benefits and feasibility of implementing these options.

questions: question: How important are Representative Payees for the SSA?
answer: Representative Payees—persons who SSA staff appoint to manage Social Security benefits for those unable to do so for themselves—play an important role in ensuring that beneficiary needs are met.
child_questions: question: How large was the payee role in FY2012?
answer: In fiscal year 2012, about 5.9 million payees managed $72 billion in annual benefits for nearly 8.4 million beneficiaries, a number that is likely to grow as the population ages.

question: What concerns has Congress raised?
answer: Congress and others have expressed concerns that SSA may not be well positioned to administer the Representative Payee Program, as currently structured, in the future.

question: What does this report examine?
answer: This report examines (1) administrative challenges facing the program and steps SSA has taken to address them and (2) long-term challenges and actions SSA has taken or could take to address them.

questions: question: What documents did GAO review?
answer: To answer these objectives, GAO reviewed relevant research, policies, federal laws and regulations, and other documents.
child_questions: question: What officials did GAO interview?
answer: GAO interviewed SSA officials and other parties, and visited the Philadelphia Regional Office.

question: How did GAO review program data?
answer: GAO also reviewed program trend data and studies on challenges associated with an aging population.

question: What potential plans did GAO review?
answer: GAO reviewed options SSA could consider to address program challenges and conducted interviews to identify the strengths and weaknesses of these options.