SSA’s DI program provides cash benefits to individuals with disabilities, and paid $144 billion to 10.8 million beneficiaries and their families in fiscal year 2015. Individuals are generally considered to have a disability if (1) they cannot perform work that they did before and cannot adjust to other work because of their medical condition(s); and (2) their disability has lasted or is expected to last at least 1 year, or is expected to result in death. Further, individuals must have worked and paid into the program for a minimum period of time to qualify for DI benefits. DI overpayments occur when beneficiaries are paid more than they should be for a given period of time. We previously found that more than half of all DI overpayments are paid to beneficiaries earning above program limits. Overpayments may also result if SSA does not cease benefit payments when notified by a beneficiary of a change in work status, when inaccurate information and administrative errors lead to incorrectly calculated benefits, or as the result of individuals knowingly misleading the agency or committing fraud. As of September 30, 2015, approximately 637,000 individuals owed about $6.3 billion to SSA in DI overpayment debt. SSA will seek repayment of most overpaid benefits after pursuing various procedural steps. Specifically, when SSA detects an overpayment, it requests a full immediate refund, unless the overpayment can be withheld from the beneficiary’s next monthly benefit. SSA also notifies the overpaid person that they may request reconsideration, a waiver, or both. A beneficiary requests reconsideration when he or she disputes that an overpayment occurred or the amount of the overpayment, and requests a waiver when asserting that he or she is neither responsible for the overpayment nor capable of repaying it. SSA may grant a waiver request if it finds that the beneficiary was not at fault for the overpayment and that recovering the overpayment would defeat the purpose of the program or be against good conscience and equity. A waiver permanently terminates collection of a debt. If SSA denies a reconsideration, a waiver, or both, the agency will request full repayment. SSA will attempt to withhold SSA benefits from the beneficiary to immediately recoup the full amount. If the individual is not receiving SSA benefits at the time or is unable to immediately pay the full amount owed, the agency generally requests a repayment plan. This may take the form of voluntary remittances or withholding from monthly SSA benefits. These withholdings may be taken from DI or other SSA benefits being received, such as Supplemental Security Income (SSI) benefits. Withholding from other SSA benefits is known as cross-program recovery. SSA policy is to obtain repayment within 36 months, but it may approve longer repayment periods after reviewing an individual’s income, expenses, and assets. SSA regulations require a minimum monthly DI withholding of $10, an amount that has not changed since 1960 according to SSA. SSA’s policy is to stop its collection activities and temporarily write off a debt if it meets at least one of these criteria: the debtor cannot or will not repay the debt, the debtor cannot be located after a diligent search, the cost of collection actions is likely to exceed the amount recovered, or the debt is at least two years delinquent. (SSA may refer to such debt write-offs as terminating or conditionally writing off debts.) Temporarily writing off debts conditionally removes them from SSA’s accounts receivable balance, although SSA will refer debts to Treasury for collection through external tools. Prior to referring debts to Treasury, SSA notifies debtors and informs them of the appeal rights. SSA will re- establish these debts and its own collection efforts if it receives payment through these external collection tools or if the individual becomes re- entitled to Social Security benefits. External debt collection tools include tax refund offset, which withholds or reduces federal tax refunds to the individual; federal salary offset, which withholds or reduces wages and payments to federal employees; administrative offset, which withholds or reduces other federal payments (other than tax refunds or salary) to the individual; administrative wage garnishment, which garnishes wages and payments from private employers or state and local governments; and credit bureau referral, which reports delinquent debt to credit bureaus and may adversely affect an individual’s credit scores. Conditionally written-off debts remain subject to collections through any available tools until the debt is paid in full or the case is otherwise resolved. As of the end of fiscal year 2015, SSA had $1.5 billion dollars of overpayments that were conditionally written off. The average amount of written-off debt was about $4,100 and more than 75 percent of these debts were written off over 5 years ago. About 30 percent of people in written-off status were under age 18 when a parent received benefits for them and most of these recipients were written off in their late teens or twenties. The amount of outstanding DI overpayments increased by 70 percent between fiscal years 2006 and 2015, with the amount of debt newly detected and reestablished exceeding the amount collected, waived, or conditionally written off in 9 of the last 10 years. Moreover, while collections of prior debt have seen some increases over the past 10 years, they have not kept pace with new debt established (see fig. 1). SSA can take several actions against individuals who knowingly mislead SSA or make false statements to obtain benefits, and these actions serve as deterrents against potential fraud and abuse. Allegations of suspected wrongdoing are referred to SSA’s OIG by SSA staff or the public. OIG will assess each allegation received to determine whether they warrant investigation. According to SSA, those opened for investigation must be referred to the Department of Justice (DOJ) under the U.S. Attorney of jurisdiction any time OIG has grounds to believe there has been a criminal violation, as required by the Inspector General Act. Once DOJ reviews a case for potential civil or criminal action, OIG decides to impose civil monetary penalties (penalties) where warranted. Section 1129 of the Social Security Act provides for penalties against individuals who make certain false statements, representations, or omissions in the context of determinations of initial or continuing eligibility. Under that section, there are certain factors that must be considered when determining the amount of a penalty, which are: the nature of the individual’s actions, the circumstances under which the actions occurred, the individual’s history of prior offenses, the individual’s degree of culpability in the current case, the financial condition of the individual, and any other factors that justice may require. OIG officials told us that they exercise discretion when deciding which cases to pursue for penalties and take into account the age of the individual and the availability of OIG resources, among other considerations. A penalty of up to $5,000 may be imposed for each false statement or material omission, and an additional assessment up to double any payment that was made as a result, may be imposed. OIG’s Office of Counsel to the Inspector General (OCIG) imposes penalties, but subsequently refers penalties imposed to SSA’s Office of Operations for collection. According to SSA, because penalties result from fraud and misconduct, SSA cannot terminate collection or write off the debt without the permission of DOJ. Additionally, individuals cannot discharge penalties through bankruptcy. If OCIG declines to impose a penalty, it will consider whether administrative sanctions (sanctions) might be appropriate. If it determines that sanctions may be suitable, OCIG will return the case to SSA for further consideration. SSA is ultimately responsible for deciding whether sanctions are imposed in each case. If it imposes sanctions, the sanctioned individual will not receive benefit payments that he or she would have been entitled to for the duration of the sanction period: 6 months for a first occurrence, 12 months for a second occurrence, and 24 months for any subsequent occurrences. In fiscal year 2015, SSA identified about $1.2 billion in new DI overpayment debt and recovered about $857 million, of which 78 percent was collected by withholding some or all of beneficiaries’ monthly benefits (see fig. 2). SSA officials told us benefit withholding is their most effective tool for recovering overpayments and that collecting overpayments from individuals who no longer receive benefits can be difficult as these individuals may lack tax refunds or other federal and state payments to offset. Nonetheless, while withholding accounts for the bulk of collections, individuals repaying in this way make up less than half of people who have DI overpayment debt. Specifically, those repaying through benefit withholding represent about 311,000 of 637,000 people with DI overpayment debt. Benefit withholding plans, in which SSA withholds a specified amount of an individual’s benefits each month, often reflect lengthy repayment periods. We estimated the length of time needed to complete repayment for overpayments being collected in this way at the end fiscal year 2015 (see fig. 3) and found that over 50 percent of plans will take more than 3 years to complete. In addition, about 44,000, or 1 in 7 withholding plans are scheduled to be completed after the beneficiary’s 80th birthday. Given the age at which these beneficiaries are scheduled to complete repaying their debts, it is possible that many individuals will die before completing repayment. Moreover, individuals with the longest repayment periods account for a disproportionately large share of outstanding overpayment debt. For example, about 10 percent of individuals with withholding plans are scheduled to take over 30 years to repay their debts, but account for nearly a quarter of the outstanding debt to be recouped through withholding. We also found that over a third of withholding amounts were less than $50 and over half were less than $100 (see fig. 4). The median amount of monthly benefits being withheld from beneficiaries’ DI benefits to repay prior overpayments was $57. In addition, many withholding amounts represented a small percentage of recipients’ monthly benefits. About two-thirds of withholding amounts were less than 10 percent of beneficiaries’ monthly benefit (see fig. 5). SSA withheld a median of less than 8 percent of individuals’ monthly benefits for repayment. We also found, when we looked at data from the end of fiscal year 2015, that individuals with lower benefits had a larger share of their monthly benefits withheld for an overpayment debt (see appendix II, figures 7 and 8). For example, the median withholding level for those in the lowest quartile of monthly benefits was 10 percent, while for those in the highest quartile of monthly benefit, the median was 6.2 percent. Appendix II provides additional information on overpayments and withholding amounts and rates. Despite SSA’s heavy reliance on withholding benefits to recover debt, we found gaps in SSA’s guidance, oversight, and verification of information related to establishing withholding plans. The importance of determining and collecting an appropriate amount of debt from individuals is laid out in federal standards. The Federal Claims Collection Standards indicate agencies need to aggressively collect all debts arising out of activities of that agency, and that the size and frequencies of installment payments should bear a reasonable relation to the size of the debt and the debtor’s ability to pay. When pursuing debt, it is important for SSA to balance collection efforts against not placing too high a burden on an individual repaying a debt, and for SSA to have policies and procedures in place that ensure staff consistently make decisions on debt recovery that balance these opposing goals. However, as described below, SSA policy for determining reasonable beneficiary expenses is ambiguous, repayment plans are not subject to review or oversight, and beneficiaries’ self-reported financial information is not independently verified. In the absence of these elements, SSA cannot reasonably ensure that repayment amounts and time frames determined by its staff are appropriate and set in accordance with best practices and agency policy. SSA’s policies for how to consider beneficiaries’ expenses when determining benefit repayment amounts are ambiguous and leave much to the judgment of staff. Federal Internal Control Standards indicate that agencies’ policies and procedures should be clearly documented in administrative policies or operational manuals. According to SSA policy, staff are to obtain an SSA form 632 documenting financial information, including income and expenses, from a beneficiary to determine his or her ability to repay an overpayment when the beneficiary requests a repayment period exceeding 36 months. In these cases, SSA policy generally directs staff to withhold the amount by which an individual’s income exceeds expenses, or the rate permitted by income or assets if there are excess assets, and notes that this amount should generally not be less than $10 per month. However, a recent report prepared for SSA by an external auditor found that the agency has contradictory policies for determining what reasonable expenses are for beneficiaries. SSA’s policy states that a person’s particular circumstances and lifestyle determine whether expenses are ordinary and necessary, and that patterns of living are established over time and these patterns must be considered when evaluating the facts. At the same time, SSA policy also directs staff to not allow extraordinary and unnecessary expenses, regardless of the person’s standard of living. The report noted that these conflicting statements can lead to confusion when determining a feasible repayment rate. In contrast, the Internal Revenue Service provides detailed guidance on allowable living expenses when determining taxpayers’ ability to repay a delinquent tax liability. Its Collection Financial Standards include national guidelines for the cost of food, clothing, and other items and local standards for housing, utilities, and transportation costs. In the absence of clear guidance, SSA staff may struggle to determine what a beneficiary can reasonably afford to repay and could lead to inconsistencies across different repayment plans. SSA lacks effective oversight to know whether these plans are being consistently or appropriately administered. Federal Internal Control Standards indicate that key duties and responsibilities need to be divided among different individuals to reduce the risk of errors, and this should include separating responsibilities for authorizing, processing, recording, and reviewing transactions. In 2011, we reported that SSA staff are not required to obtain supervisory review of repayment plans, and recommended that SSA require supervisory review of repayment plans that extend beyond 36 months—the point at which SSA staff are directed to evaluate an individual’s ability to repay based on income, assets, and expenses. The agency disagreed with our recommendation and has not taken any action to implement it. In the course of our current review, SSA maintained that reviewing withholding plans would not increase recovery of overpayments, but the agency did not provide any analyses or studies to support its position. We continue to believe that supervisory review is an important part of ensuring that staff create appropriate repayment plans. In addition to lacking supervisory review, SSA also has not performed targeted reviews of repayment plans for adherence to policy, even though the agency systematically samples cases to review other aspects of DI overpayment decision making through its Continuous Quality Area Director Reviews, such as whether waiver decisions are properly documented. Without oversight provided by either supervisory or quality assurance reviews, the consistency and appropriateness of repayment amounts cannot be known. While oversight over repayment plans is lacking, any efforts to provide oversight could be hampered by a lack of documentation. Federal Internal Control Standards state that all transactions and other significant events need to be clearly documented, and that the documentation should be readily available for examination. SSA policy directs staff to obtain information and supporting documentation of the beneficiary’s income, assets, and expenses. This information should be documented by the beneficiary on a form 632 worksheet. Although SSA policy directs staff to retain copies of all supporting documentation (including bills and bank statements) for individuals whose overpayment is $75,000 or more, SSA policy does not explicitly require that supporting documentation— including the form 632 worksheet—be retained for lesser overpayment amounts. Since the median overpayment balance was about $3,200 at the end of fiscal year 2015, an audit trail for conducting oversight may not exist for many repayment plans. Our review of a small sample of overpayment case files—with overpayment amounts ranging from about $3,000 to about $165,000—raised questions about the sufficiency of documentation. Our non-representative sample of 16 cases was of overpayments being repaid through benefit withholding and with repayment periods exceeding 36 months. In 4 cases the overpayment was over $75,000 and retention of supporting documentation, such as mortgage statements, bills, or pay stubs, is directed by SSA policy; however, only 2 had any documentation verifying income or expenses. Further, in 3 of 8 cases in which beneficiaries were directed to complete a form 632—the worksheet used by the beneficiary to request a repayment period exceeding 36 months and to document relevant financial information—we found no evidence in the file that the form was completed. Ultimately, not requiring documentation to be retained for the record for all plans precludes the agency from reviewing the accuracy of repayment amounts in any future review. SSA may be missing opportunities to verify self-reported financial information, and therefore individuals’ ability to repay overpayments. Federal Claims Collection Standards state that agencies should obtain financial statements from debtors who represent that they are unable to pay in one lump sum and independently verify such representations whenever possible. Further, GAO’s Framework for Managing Fraud Risks in Federal Programs states that managers should take steps to verify self-reported data to effectively prevent and detect instances of potential fraud. While SSA policy directs staff to collect evidence (such as bank statements or bills) to corroborate self-reported financial information from some beneficiaries, the agency may be able to more efficiently and effectively validate self-reported information by other means that SSA already is leveraging for other purposes. For example, SSA is already using the Department of Health and Human Services’ National Directory of New Hires (NDNH) to determine an individual’s initial and continued eligibility for DI and SSI benefits. The value of this database was further demonstrated in March 2014 when SSA initiated the Quarterly Earnings Pilot to systematically identify and contact DI beneficiaries before their earnings cause them to accumulate large overpayments. According to SSA, the project identified 278 cases for contact using these data about 10 months earlier than it presumably would have identified them using old procedures and methods, uncovering about $3 million in overpayments. Nevertheless, SSA officials told us the agency has not studied the feasibility of using NDNH to verify income information from individuals seeking to establish withholding plans. Similarly, since 2011, SSA has used an automated process, Access to Financial Institutions (AFI), to verify Supplemental Security Income (SSI) applicants’ bank balances and detect undisclosed accounts. In November 2015, legislation was enacted that requires individuals to authorize SSA to access their financial information when deciding whether to waive their overpayments under certain circumstances. Although SSA uses the same form to collect self-reported information for overpayment waiver decisions and withholding plans, according to SSA officials, the agency has not yet determined whether this recent legislation allows it to use AFI for verifying withholding plans that extend beyond 36 months. Using information sources, like AFI and NDNH, to verify financial information provided by beneficiaries can help SSA ensure that it is collecting no more or no less than an individual can afford to pay. SSA reports that it has or is taking several steps to improve the collection of delinquent DI overpayment debt. These include: Modernizing the External Collection Operation (ECO) system: The ECO system identifies beneficiaries with delinquent debt and refers them to Treasury for external collection, using tools such as wage garnishment and tax refund offset. Currently, due to a system limitation, if a debtor has multiple debts, all of the debts must meet the criteria for referral to Treasury. If one debt is not eligible for referral— for instance if an individual is requesting that a debt be waived—none of the debts will be referred. According to SSA officials, as part of its Overpayment Redesign initiative, SSA plans to address this limitation by changing the way in which ECO stores debts to be able to select debts on an individual level as opposed to the aggregate beneficiary record level. This update should allow Treasury to use external collection tools against more debtors and potentially increase the amount of overpayments recovered through these tools. State Reciprocal Program: Under the State Reciprocal Program (SRP), managed by the Treasury as part of the Treasury Offset Program, the federal government enters into reciprocal agreements with states to collect debts by offsetting state payments due to debtors, such as state income tax refunds. This program provides SSA with an additional avenue to recover overpayments from delinquent debtors and may increase overall debt recovery. SSA published regulations in October 2011 and modified its systems to begin accepting offsets of state payments in 2013. According to SSA officials, SSA is dependent upon Treasury, who enters into reciprocal agreements with states, to expand the SRP to additional states. Address Verification Project: Implemented in February 2015, SSA’s Address Verification Project is expected to improve its ability to notify individuals with delinquent debt before referring them to external collection. Prior to implementation, SSA relied on the addresses in its records when notifying debtors of their delinquent debt. If the United States Postal Service returned the notice, SSA would cease collection activity, and use a contractor to obtain a current address to re-notify the debtor. It now obtains a current address from the contractor prior to mailing the notice to ensure it has current address information. SSA and GAO identified several additional options that could increase its overpayment recoveries. Officials told us that one change they are considering is to make the minimum monthly withholding amount 10 percent of an individual’s monthly benefit instead of the current $10 minimum, but SSA is in the early stages of studying this option and does not yet have time frames for implementing such a change. The agency noted that this could help minimize the number of long-term repayment plans and would put DI collections more in line with its SSI program. Beyond this, we identified two additional options based on past GAO work or conversation with SSA. Adjusting monthly benefit withholding according to cost of living adjustments (COLA): In 1996, we recommended that SSA adjust its monthly withholding amounts so that they keep pace with any annual increases in benefits. This option would accelerate overpayment recoveries with only minimal effect on recipients’ monthly benefits. Charging interest on debt: SSA officials told us that they have the authority to charge interest on delinquent overpayment debt and would like to be able to do so, but that they have not done so due to resource constraints and competing priorities. With respect to debts that are in the process of being repaid, such as through benefit withholding, SSA has determined that it does not have the authority to charge interest. As we discuss below, however, charging interest on debt that is being repaid could help protect the value of overpayments against the effects of inflation, especially over longer repayment periods. However, SSA lacks concrete plans and timeframes for studying and implementing these options or any other collection tools beyond those already in place, and SSA officials told us the agency currently has more pressing priorities than expanding its DI debt recovery tools. Federal Claims Collection Standards state that federal agencies shall aggressively collect all debts arising out of activities of, or referred or transferred for collection services to, that agency. Further, collection activities shall be undertaken promptly with follow-up action taken as necessary. Our analysis of the options we examined show that they hold promise for increasing SSA’s recovery of DI overpayments. We reviewed overpayments as of September 30, 2015 that were being repaid through benefits withholding, and determined how existing scheduled benefit withholding amounts would be affected by: (1) making the minimum withholding amount 10 percent of monthly DI benefits, (2) adjusting withholding amounts according to annual COLAs, and (3) charging interest on debts being collected through withholding. We took outstanding debts and withholding levels and computed the repayment schedule under the status quo and each alternative option. By definition, repayment schedules do not account for future changes such as individuals who gain or lose eligibility for benefits or whose ability to repay changes. Changes such as those mean that actual collections differ from scheduled collections. Options that increase withholding will speed recovery and reduce the effects of attrition, while charging interest will delay the completion of repayment and magnify the effects of attrition. Nonetheless, these options—implemented alone or in combination—have the potential to significantly increase collections of overpayment debt. Of the options we examined, setting a minimum withholding amount equal to 10 percent of an individual’s monthly DI benefit has the greatest potential to increase scheduled collections and reduce the amount of time to fully recover overpayments. We estimate this option would increase scheduled collections by $276 million over 5 years and reduce the median scheduled time to fully recover all beneficiary overpayments from 3.4 years to 2.3 years. Further, those beneficiaries scheduled to take over 20 years to complete repayment would decrease from 17 percent to 4 percent. Figure 6 below provides additional information on the effect of this scenario on scheduled repayment times. The increase in collections under this scenario comes entirely from individuals currently having less than 10 percent of their benefits withheld, and as such, the changes within this portion of the population are more pronounced when examined separately. Among those beneficiaries, the median scheduled repayment time would decrease by over half, from 5.9 to 2.5 years. Increasing the minimum withholding rate to 10 percent of monthly benefits could also be implemented in a way that improves collections while sparing or minimizing the effect on beneficiaries receiving the lowest monthly benefits. We estimate that only about 5 percent of the increase in collections would come from the quartile of beneficiaries receiving the lowest monthly benefits, in part because they already have a disproportionately larger amount of benefits withheld, and in part because increasing the withholding rate recovers much less dollar-wise from those receiving lower monthly benefit levels than those with higher benefits. We estimate that adjusting monthly withholding amounts according to COLAs or charging interest on overpayment debt would have a smaller effect than changing the minimum withholding rate to 10 percent of monthly benefits (see table 1), but could help protect the DI trust fund from the effects of inflation. For example, if SSA overpaid a dollar in 1985 and the beneficiary repaid that dollar 30 years later in 2015, the recovered dollar would have only 45 percent of the buying power of the 1985 dollar. Similarly, if SSA overpaid a dollar in 2010 and recovered it in 2015, the repaid dollar would have only about 92 percent of the buying power of the dollar SSA overpaid. Given that many withholding plans extend for decades, the effect of inflation can be significant. Charging interest on outstanding overpayment balances at the rate of inflation would counteract the effect of inflation and give repaid dollars the same buying power they had when erroneously paid years earlier. Other agencies already charge debtors interest. For instance, the Internal Revenue Service charges individuals with delinquent tax debt interest at a rate that is adjusted quarterly and is based on the federal short-term interest rate. Similarly, adjusting monthly withholding amounts according to COLA increases could help accelerate repayments and thus help negate the effect of inflation on amounts repaid to the DI Trust Fund. Implementing any combinations of the options we examined could result in even higher scheduled collections. For instance, setting a minimum withholding rate of 10 percent of monthly DI benefits and charging an interest rate of 1 percent would increase scheduled collections by $287 million over the next 5 years, while these options implemented individually would be scheduled to bring in $276 million and $7 million respectively. SSA’s OIG has in recent years increased its use of penalties against individuals who knowingly mislead the agency, according to SSA’s Office of Counsel to the Inspector General (OCIG), which is responsible for imposing penalties. According to SSA officials, in fiscal year 2010, OCIG successfully resolved 89 cases and imposed penalties totaling approximately $3.9 million. That increased to 313 cases and more than $17.6 million in fiscal year 2015. OCIG officials attribute this increase to improving its evaluations process and more management focus on the use of penalties as a deterrent. Increased penalties notwithstanding, officials told us SSA lacks reliable data on the status of penalties, how much of penalty amounts have been collected, and how much is delinquent. While OCIG imposes penalties on individuals, SSA’s Office of Operations is ultimately responsible for collecting these amounts. SSA officials said they could not provide us with comprehensive data on the number and amount of penalties paid because of limitations in their computer systems, and added that they would need to review each individual case to determine its repayment status. Federal Internal Control Standards indicate that program managers need appropriate data to monitor the performance of their program and help ensure accountability. Without valid data on the disposition of penalties, SSA cannot determine whether penalties are being used effectively across the agency and if individuals who mislead the agency are paying as appropriate. SSA reports that it is planning a number of steps to better track imposed penalties, and ultimately the amounts collected as part of a larger effort to improve its processing of overpayments and other debts. According to its plans, SSA hopes to: by fiscal year 2018, assign penalties a unique transaction code to be able to track them through the collection process; and by fiscal year 2020 unbundle penalties from other debts owed by an individual in its ROAR database—which is used to track debts and collections—in order to allow remittances to be directly applied to penalties as opposed to an individual’s cumulative debt. While such improvements could help address the limitations we identified, they are a number of years away. Further, SSA notes in its plans that they may be subject to delays related to resource constraints. Moreover, SSA is still in the process of analyzing and planning potential fixes. As such, it is uncertain whether SSA will meet its intended time frames or whether its currently planned efforts may change and ultimately address the shortcomings it identified. SSA has met with limited success collecting on imposed penalties, and is not using some tools to better ensure that individuals who knowingly mislead the agency pay their penalties. Officials said SSA currently only collects penalties by either withholding DI or other SSA benefits, or relying on individuals to voluntarily remit penalty amounts. A recent OIG audit highlighted the difficulty that SSA has in collecting delinquent penalties. In a sample of 50 penalties imposed between calendar years 2010 and 2012 totaling $1.9 million, OIG found that about $1.7 million of that amount remained uncollected as of July 2014. The majority of that amount (approximately $920,000) was associated with individuals not receiving benefits and with whom SSA had no ongoing collection actions—the same category of individuals who could be targeted with external collection tools. While officials noted the agency determined it can refer penalties for collection through some external collection tools, such as wage garnishment, tax refund offsets, and administrative offsets, the agency has not utilized them. According to officials, SSA drafted a regulation for implementing these options; however, the regulation is still undergoing internal review and SSA does not yet have time frames for implementing these options. Moreover, the agency determined it is prohibited by statute from referring delinquent penalties for collection through other tools, such as federal salary offset, credit bureau reporting, and assessing interest. Nevertheless, SSA has not explored pursuing legislative authorities to use these tools. By not collecting some delinquent penalties and not considering additional tools to do so, SSA may be undermining the deterrent value of penalties against potential fraud. GAO’s Framework for Managing Fraud Risks in Federal Programs indicates that a consistent response to fraud demonstrates that management takes this subject seriously, and that the likelihood that individuals who engage in fraud will be punished serves to deter others from engaging in fraudulent behavior. SSA collaborated with OIG to change its sanctions procedures in 2013 in an effort to more consistently impose sanctions across the agency. Prior to this change, officials told us, SSA field offices had broad discretion to impose sanctions. SSA officials told us that some offices were more aggressive in pursuing sanctions and that an offense that could result in sanctions in one office might not do so in another office. The new procedures direct that potential sanctions cases first be evaluated for prosecution or civil action by DOJ and then by OIG for the imposition of civil monetary penalties. Ultimately, SSA is responsible for determining whether to impose sanctions based on the circumstances of the case, such as whether evidence exists to show that the individual knowingly misled the agency. The relevant SSA field office is responsible for developing the documentation to support the sanction, which is then reviewed by a sanctions coordinator in the SSA regional office. Despite changes in decision-making for sanction cases, unreliable data and shortcomings in how SSA tracks sanctions prevent the agency from reasonably ensuring that sanctions are imposed as appropriate, and ultimately prevent SSA from assessing whether its recent procedural changes had their desired effect. SSA cannot reasonably ensure sanctions are imposed as appropriate: SSA officials told us that they could not provide us with reliable data on the disposition of sanction cases. SSA currently tracks the disposition of sanctions in a database, which includes whether sanctions were imposed and the sanction period (i.e., the period of time during which beneficiaries will not receive benefits). However, this database requires SSA staff receiving information on sanctions to manually enter information about the sanction into the database, which lacks data checks or related oversight and may lead to errors and omissions. For instance, officials in three regional offices with oversight responsibilities told us that decisions on sanctions cases are generally communicated between OIG and the relevant field office. If these officials are inadvertently not included on the communications, they cannot ensure that the sanctions database is properly updated. One regional official said this has resulted in instances in which SSA headquarters wanted to know why sanctions were not imposed in particular cases, but this official did not have the information to respond correctly. Furthermore, officials in two regions noted that SSA’s database does not generate alerts when field offices fail to take action on potential sanctions cases, thus making it incumbent on regional coordinators to manually track and follow up on the status of cases. One regional official noted that the lack of tracking resulted in several instances in which SSA was pursuing sanctions years after the alleged wrongdoing. SSA cannot evaluate procedural changes: Beyond the disposition of specific sanctions, officials told us that they also lacked reliable data on the number of sanctions imposed and whether this number has changed since the current procedures were instituted in 2013. This is likely a result of the limitations in how sanctions data are captured as described earlier. Moreover, SSA conducted an internal assessment to determine whether field offices followed correct procedures for implementing sanctions. Specifically, SSA selected a sample of cases that were originally referred to OIG, and were subsequently returned by OCIG to field offices. SSA determined that sanctions were not imposed in the majority of cases in which sanctions were likely warranted, often because field offices did not take action on cases in a timely manner. The study did not determine why the agency failed to act on these cases in a timely manner. SSA officials speculated that it may be due to the difficulty of imposing harsh punishment on beneficiaries and because sanctions are labor intensive for SSA staff. Federal Internal Control Standards indicate that managers need to compare actual performance to planned or expected results and analyze significant differences, and that operational data is needed to determine whether they are meeting their goals for accountability. Furthermore, as indicated in GAO’s Framework for Managing Fraud Risk in Federal Programs, a prompt and consistent response to fraud demonstrates that agency management takes reports seriously and serves to deter others from engaging in fraudulent behavior. As a result of SSA’s internal evaluation, the agency recognized the need to better track sanction cases, improve how it communicates decisions, and act on them in a timely manner. However, officials said the agency is in the early stages of determining how it will address these identified shortcomings, and ultimately ensure the deterrent value of sanctions. More recently, OCIG officials told us that they plan additional changes in how OCIG refers cases back to SSA for possible sanctions. According to SSA, OCIG will share additional information with SSA that may be helpful in SSA’s sanctions determinations. Notwithstanding this change, complete and accurate data will still be needed to effectively manage and evaluate SSA’s sanctions program. While overpayments account for a relatively small portion of all DI benefit payments, it is incumbent on SSA to collect these debts as a good steward of public funds. Improvements in collecting overpayment debt, however small, could help strengthen the solvency of the DI trust fund. In short, the collection of overpayment debts warrants more attention than SSA has demonstrated to date. Absent clear policies and oversight procedures for establishing and reviewing withholding plans, which are heavily relied on by SSA to recover the bulk of overpayments, SSA cannot be sure that beneficiaries are repaying debts in appropriate amounts within appropriate time frames. Further, SSA could be collecting too little or too much money each month from beneficiaries by not leveraging available tools to verify beneficiaries’ ability to pay. By not implementing additional debt collection tools that would speed up lengthy withholding plans or ensure that the value of collections is not diminished by inflation, SSA is missing opportunities to restore debt to the DI trust fund. Increasing the minimum monthly withholding amount would promote more equity in how SSA deals with overpayments across its programs, while improvements to procedures and tools for establishing repayment plans would better protect those beneficiaries who truly lack resources to pay. As part of its efforts to ensure the integrity of the DI trust fund, penalties and sanctions are key tools that the agency needs to use effectively. By not using all available tools to collect penalties and by not consistently imposing and tracking sanctions, SSA weakens its stance that fraud is unacceptable, and its ability to deter other individuals from attempting to collect benefits for which they are ineligible. To ensure effective and appropriate recovery of DI overpayments and administration of penalties and sanctions, we recommend the Acting Commissioner of the Social Security Administration take the following 8 actions: Clarify its policy for assessing the reasonableness of expenses used in determining beneficiaries’ repayment amounts to help ensure that withholding plans are consistently established across the agency and accurately reflect individuals’ ability to pay. Improve oversight of DI benefit withholding agreements to ensure that they are completed appropriately. This could include requiring supervisory review of repayment plans or sampling plans as part of a quality control process, and requiring that supporting documentation for all withholding plans be retained to enable the agency to perform such oversight. Explore the feasibility of using additional methods to independently verify financial information provided by beneficiaries to ensure that complete and reliable information is used when determining repayment amounts. These additional tools could include those already being used by the agency for other purposes. Adjust the minimum withholding rate to 10 percent of monthly DI benefits to allow quicker recovery of debt. Consider adjusting monthly withholding amounts according to cost of living adjustments or charging interest on debts being collected by withholding benefits. Should SSA determine that it is necessary to do so, it could pursue legislative authority to use recovery tools that it is currently unable to use. Pursue additional debt collection tools for collecting delinquent penalties. This includes taking steps to implement tools within its existing authority and exploring the use of those not within its authority, and seeking legislative authority if necessary. Take steps to collect complete, accurate, and timely data on, and thereby improve its ability to track both: civil monetary penalties and their disposition; and administrative sanctions and their disposition. We provided a draft of this report to the Social Security Administration for comment. In its written comments, reproduced in appendix III, SSA agreed with 7 of our 8 recommendations and disagreed with 1. SSA also raised some broader concerns about the focus of our report. SSA stated that our report confuses two distinct issues: recovering overpayments and deterring fraud through civil monetary penalties and administrative sanctions. We agree that these issues are distinct; however, both are important parts of safeguarding the integrity of the DI program, and ensuring that payments are made in the right amounts to the right individuals. SSA stated that overpayments are not necessarily the result of fraud. We agree and note in our report that overpayments occur for a number of reasons, including fraud. SSA also stated it believed it was misleading to include deterring fraud in the title of our report, noting that penalties and sanctions are not themselves findings of fraud, and are based on, among other things, findings of false or misleading statements or knowing omissions by individuals. We acknowledge this distinction, and made revisions in the title and to the report in response to SSA’s comments. However, we continue to believe that the consistent use of these tools serves as a deterrent against those who would engage in fraud or abuse of the DI program. SSA agreed with our recommendation to clarify its policies regarding the reasonableness of expenses when determining beneficiaries’ repayment amounts. SSA noted that it has already taken actions to clarify its policies regarding overpayments and waivers, and informed us in its comments that it delivered video training to its employees in 2015 on these topics. SSA added that it will continue to assess efforts and make other improvements to ensure consistent and accurate application of policy. To the extent that SSA’s efforts also address unclear written policies, such actions could help meet the intent of the recommendation. SSA agreed with our recommendation to improve the oversight of benefit withholding plans and said it will explore options to do so. However, it disagreed with requiring supervisory review of repayment plans. We present supervisory review as just one option for improving oversight, and there may be other approaches SSA could explore for improving oversight in this area. Nevertheless, we continue to believe that this option—recommended in prior GAO work—can be an effective option for ensuring that staff create appropriate repayment plans. SSA agreed with our recommendation to explore the feasibility of using additional methods to independently verify financial information provided by beneficiaries when determining repayment amounts. SSA agreed with our recommendation to adjust the minimum withholding rate to 10 percent of monthly DI benefits, and noted that the President’s fiscal year 2017 budget submission contains a legislative proposal to do so. We acknowledge that SSA recently included a paragraph in its budget submission discussing this proposal. SSA may need to work closely with Congress to ensure this change is realized. SSA disagreed with our recommendation to consider adjusting monthly withholding amounts according to cost of living adjustments or charging interest on debts being collected through withholding benefits. For debt subject to benefit withholding, which is not considered delinquent debt, SSA asserted that these measures would not have a significant effect on the amount of debt recovered, especially compared to the option of making the minimum withholding rate 10 percent of monthly benefits. For delinquent debt, SSA asserted charging interest on debts would require substantial changes to multiple systems that affect its overpayment businesses processes, and would require extensive training to its employees. While SSA stated it has studied the potential changes needed to charge interest on debt, without further consideration of, for example, the costs and benefits of charging interest or adjusting withholding amounts according to cost of living adjustments, SSA cannot know the extent to which these options would improve debt recovery efforts or help protect the value of debts against the effects of inflation, which can be substantial given that withholding plans can take decades to complete. SSA agreed with our recommendation to pursue additional tools to collect delinquent penalties, and stated that it has begun drafting regulations to use existing external debt collection tools, as noted in our report. However we state in our report that SSA lacks timeframes for completing this action. SSA reported that it is also developing a legislative proposal to allow it to use other tools it cannot currently utilize, such as reporting these debts to credit bureaus and withholding federal salary payments. Such actions, if implemented as intended, could help meet the intent of the recommendation. SSA agreed with our recommendations to improve its ability to track penalties and sanctions, and noted that it is developing workload tracking tools for both, which it expects to implement in fiscal year 2016, and is in the planning stages of an overpayment redesign effort said that should result in more complete, accurate, and timely data for penalties. Such actions, if implemented as intended, could help meet the intent of the recommendations. SSA also provided technical comments on our draft that we incorporated as appropriate. In particular, SSA noted that our draft report contained sensitive information on its sanctions process, which we agreed to exclude. We are sending copies of this report to the appropriate congressional committees, the Acting Commissioner of the Social Security Administration, and other interested parties. In addition, the report will be 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 report are listed in appendix IV. In conducting our review of how the Social Security Administration (SSA) recovers Disability Insurance (DI) overpayments and oversees civil monetary penalties and administrative sanctions, our objectives were to examine (1) how and to what extent SSA is recovering DI overpayments, and (2) SSA’s procedures for imposing penalties and sanctions, and how often they are used. We conducted this performance audit from November 2014 to April 2016, in accordance with generally accepted government auditing standards. These 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 our findings and conclusions based on our audit objectives. To determine how SSA recovers DI overpayments, we reviewed relevant federal laws and regulations, and SSA policies and procedures. Regarding the extent to which SSA recovers overpayments, we obtained available data from SSA on the amounts of overpayments detected, waived or written-off, collected, and reestablished between fiscal years 2006 through 2015, as well as data on the cumulative DI overpayment debt balance at the start and end of each fiscal year in that period. We also obtained corresponding data on the amount of DI overpayment debt recovered through internal and external debt collection tools. To examine SSA efforts to improve its recovery of overpayments, we reviewed agency plans, and publicly available documents such as its annual performance plan, and past GAO and Office of Inspector General (OIG) reports. We also interviewed SSA headquarters and regional staff responsible for overseeing the collection of overpayments. To obtain additional insight on SSA’s recovery of DI overpayments, we interviewed officials from an organization representing SSA field office managers (National Council of Social Security Management Associations) and an organization representing advocates for individuals with disabilities (National Disability Rights Network). To gain perspective on how SSA sets and documents overpayment repayments plans, we reviewed a non-representative sample of 16 overpayments being repaid through benefit withholding established in fiscal year 2015. We selected a mixture of cases in terms of (1) whether the original overpayment amount was over or under $75,000, the threshold at which SSA policy requires the retention of documentation supporting income and expenses; and (2) whether more or less than 10 percent of the beneficiaries’ monthly DI benefits were withheld to repay the overpayment. We then randomly selected cases for review from each of the 4 subsets of cases that result from applying our two criteria. In reviewing these cases, we sought to determine how SSA verified beneficiaries’ ability to repay overpayment and how it documented these decisions, including reviewing whether SSA retained supporting documentation in accordance with its policies. This sample is non- representative and our results are not generalizable to all benefit withholding plans. To examine the extent to which SSA is recovering DI overpayments and options for improving collections, we obtained data on DI overpayments as of September 30, 2015. The data we obtained came from SSA’s Master Beneficiary Record (MBR) and Recovery of Overpayments, Accounting and Reporting (ROAR) systems. We limited our data request and analysis to those overpayments publicly reported by SSA. Using these data, we calculated the effect of potential enhancements in terms of how much more SSA would be scheduled to collect in fiscal years 2016 through 2020, and how much faster SSA would be scheduled to recover these overpayments in full. Our estimates are based on withholding amounts and overpayments as of the end of fiscal year 2015 and the assumption that everyone will continue to pay based on the current schedule. This implies there will be, for example, no future changes in eligibility for benefits, no deaths among people having benefits withheld, and no changes in withholding amounts. We also did not attempt to estimate future overpayments. As such, actual total collections would differ from scheduled total collections. The enhancements we discuss below are based on information obtained from SSA or through examining past GAO work. We did not conduct an exhaustive review of options for improving debt recovery and there may be others that we did not consider. In reporting scheduled repayments for all of our enhancement scenarios, we adjusted repayment amounts by four inflation rates: 0, 2.0, 2.7, and 3.4 percent. This gives the reader a sense of the extent to which each of the policy options counteracts the effects of inflation, either by inflation- adjusting repayments, or simply speeding up SSA’s recovery of overpayments, thereby reducing its exposure to inflation. For each month, we then computed the recipient’s remaining balance assuming that the recipient repaid either their normal monthly repayment amount or the remaining balance, whichever was less. We included the 0 percent inflation scenario because it isolates the effects of factors other than inflation. Social Security estimated long-range inflation scenarios of 2.0, 2.7, and 3.4 percent in its 2015 Trustee’s Report. We computed total repayments in each scenario as the sum of monthly payments. We assumed that people make monthly payments until they have paid off their entire balance and then stop paying. If their balance was less than their usual monthly payment, we assumed they paid exactly the outstanding balance in their final month. We estimated scheduled repayments for the following scenarios: 1. Baseline collections (no change): We examined beneficiaries’ outstanding overpayment balances as of September 30, 2015, as well as their current monthly repayment rates. We used that information to estimate, at current withholding rates, when beneficiaries are scheduled to complete repaying their overpayment debts, age at scheduled repayment, as well as how much they are scheduled to repay over the next five fiscal years. 2. Setting the minimum withholding rate to 10 percent of monthly DI benefits: We computed the standing repayment amount as the greater of 10 percent of the recipient’s post-COLA benefits in each month or the recipient’s actual repayment amount in the ROAR system as of September 30, 2015. 3. Adjusting monthly withholding amounts by the cost of living adjustment (COLA): These scenarios increased the withholding amounts that SSA reported by 0, 2.0, 2.7, or 3.4 percent effective in January of each year. The 2.0, 2.7, and 3.4 percent estimated COLAs are based on SSA’s long-range inflation estimates in the 2015 Social Security Trustee’s report. This scenario adjusts both benefit and withholding amounts. 4. Charging interest: This scenario increases the remaining balance at the beginning of year by 1 percent in the 0 percent COLA scenario, and an interest rate equal to the rate of inflation in the other scenarios. We chose the 1 percent interest rate in the no inflation scenario because it is the rate of interest the US government is allowed to charge in calendar year 2016 on delinquent debts. 5. Combined scenarios: We report the results of a few policy options in combination. It is important to note that our combination of interest and COLA effectively undo the effects of inflation on both monthly repayment amounts and on total debt owed. We assessed the reliability of the data we used by checking for extreme and implausible values and by comparing the totals in them to published sources and found them to be sufficiently reliable for our use. In estimating scheduled repayments for the above scenarios, we made a number of decisions and assumptions about overpayments and withholdings in the custom file provided by SSA. The data provided by SSA listed all overpayments that SSA is either actively trying to collect or has conditionally written off, referred to Treasury, and will collect if the beneficiary becomes eligible for disability or retirement benefits. These data lists both a claimant—the person whose disability creates eligibility for DI benefits—and a beneficiary—who may be the claimant, the claimant’s spouse, or a dependent of the claimant. SSA officials told us that the agency can seek repayment from the claimant, beneficiary, or anyone else receiving benefits on the claimant’s earnings record. We aggregated this overpayment level data to the beneficiary level, taking the maximum withholding amount per beneficiary if the beneficiary’s account showed more than one overpayment, and adding together withholding in rare instances when one person benefited from overpayments to multiple claimants. If a beneficiary had withholding on any one of the overpayments on his or her record, we treated all overpayments on the account as subject to recovery through withholding. This methodology can misstate repayment times in situations where, for example, a beneficiary had overpayments both on their own disability claim and their parent’s disability claim, and both parties are involved in repaying the beneficiary’s overpayments. We identified and excluded from our analysis beneficiaries who appeared to be deceased by matching their Social Security Numbers (SSN) to the full SSA Death Master File. This may exclude some recoverable overpayments from our analysis because SSA officials told us that they could seek repayment from anyone receiving benefits on the claimant’s earnings record. While about 40 percent of the conditionally written off recipients matched to the full SSA Death Master File, only about 0.01 percent of people in withholding status matched to the full SSA Death Master File. We computed the time to repay under the status quo condition by dividing the sum of current balances for a beneficiary by the withholding amount, calculated as described above. In general, this yields repayment schedules that end—as expected—no later than December 2049 due to limitations of SSA’s data system. In a handful of cases—where we aggregate one beneficiary across multiple claimants—we get longer repayment times. To identify individual beneficiaries, we used the beneficiary’s SSN when it was available. When the beneficiary’s SSN was not available, we developed a replacement unique identifier, first under the assumption that there was only one person with a given name and date of birth, for each claimant SSN; and if the name was missing, then the assumption that each combination of a claimant SSN and the beneficiary identification code variable identifies a unique person. The beneficiary identification code indicates whether the beneficiary is, for example, the claimant’s first child, second child, or spouse. This methodology may slightly overstate the total number of beneficiaries in the data, since it will miss cases where the same person is the beneficiary of two different claimants. In order to count the number of recipients in withholding, voluntary repayment, conditionally written off, and neither paying nor in written off status, we developed categorization rules to resolve ambiguities arising from the small percentage of beneficiaries who had debts in more than one status. Specifically, we considered people to be in withholding status if any of their overpayments indicated that they were in “current pay” status and had a withholding amount. We considered people to be making voluntary remittances if they had no withholding on any overpayment and had a monthly voluntary remittance amount listed on at least one account. We considered beneficiaries to be conditionally written off if all of their overpayments were flagged as conditionally written off. We categorized the remaining beneficiaries as active, but not currently repaying. Throughout this analysis, we use the monthly benefit amount— i.e., the benefits due before a variety of adjustments—to characterize benefit levels. We adjusted future payments in the three scenarios with positive inflation by dividing all of the receipts in a given calendar year by (1+r)(t-2015) where r is the inflation rate of .020, .027, or .034 and t is the year. This assumes that all of the year’s inflation takes place on January 1, and will tend to overstate inflation early in the year. This stylized assumption means that our COLA plus interest scenario can precisely undo the effects of inflation when, in fact, appropriately set annual COLA and interest charges would typically overcorrect for inflation during some months and under-correct for it during others. To determine how SSA imposes penalties and sanctions, we reviewed applicable federal laws, regulations, and guidance. We also reviewed SSA plans for improving its administration of penalties and sanctions, internal studies of its use of sanctions, as well as past OIG reviews of penalties and sanctions. We interviewed officials in SSA headquarters who oversee their use, OIG (which investigates potential fraud), and OIG’s Office of Counsel to the Inspector General (OCIG) which has responsibility for imposing penalties and considering whether sanctions may be warranted. We requested available data from SSA on its use and the disposition of penalties and sanctions. However, after discussions with SSA officials regarding the agency’s procedures for collecting and tracking penalties and sanctions, we determined that these data were not sufficiently reliable for our use and did not include them in our report. To gain further insight on how sanctions are tracked and imposed, we interviewed regional sanctions coordinators—individuals responsible for reviewing sanctions determinations—in three of SSA’s regions: Atlanta, Chicago, and San Francisco. We chose these regions based on variation in terms of sanctions workload and error rates according to past SSA internal evaluations. The views of these officials are not generalizable across all of SSA. We also spoke to officials in SSA’s New York regional office, which developed a database for tracking the disposition of sanctions. This appendix provides more information about individuals repaying DI overpayments by having a portion of their monthly benefits withheld— notably, the relationship between their monthly benefit payments and the amount of benefits withheld. All data presented is for outstanding overpayment balances as of September 30, 2015. Throughout this report, the benefit levels we report are SSA’s “monthly benefit amount,” which is the amount due to beneficiaries before withholding or other adjustments. Figures 7 and 8 below break down this population with benefit withholding into 10 equal groups (deciles) according to the amount of their monthly benefits. Figure 7 shows, for each decile, the median percentage of benefits being withheld. Figure 8 shows the median dollars withheld for each decile. When we compared individuals with lower monthly benefit amounts to those receiving larger benefits amounts, we found that those with the smallest benefits had a higher percentage of their benefits withheld to repay overpayments. The figures also show that the majority of individuals with a larger monthly benefit amount have less than 10 percent of their DI benefits withheld. Figure 8 shows that the difference between withholding 10 percent of the median DI benefit and actual median withholding is more than $86 per month in the top decile, which consists of more than 31,000 beneficiaries. Tables 2 to 5 below provide additional information on the relationship between withholding and benefit amounts. For each table, we report not only the median (the 50th percentile) of the distribution, which offers a sense of the “typical” outcome, but also: the 25th and 75th percentiles which give a sense of the experience of beneficiaries somewhat below and above the median, respectively; the 5th and 95th percentiles to offer a sense of the experiences of people experiencing fairly extreme outcomes; the number of beneficiaries from which we computed each number; and the standard deviation. The withholding and repayment time averages are often significantly above the median because these distributions are not symmetric; rather people with the largest withholding levels are much further above the median than the people with the smallest withholding levels are below the median. For example, table 3 reports that the 95th percentile withholding level for all beneficiaries ($517) is $460 higher than the median of $57, while the 5th percentile ($10) is $47 below the median. This asymmetric distribution of withholding levels at higher amounts produces an average of $133, which is more than twice the median and more than the 75th percentile of the withholding distribution ($101). In addition to the contact named above, Michele Grgich (Assistant Director), Daniel R. Concepcion (Analyst-in-Charge), Martin Scire, and Robert Letzler made key contributions to this report. Additional contributors include: Susan Aschoff, James Bennett, Kathleen Donovan, Alex Galuten, Arthur Merriam, Monica Savoy, and Almeta Spencer. Disability Insurance: SSA Could Do More to Prevent Overpayments or Incorrect Waivers to Beneficiaries. GAO-16-34. Washington, D.C.: October 29, 2015. Disability Insurance: Preliminary Observations on Overpayments and Beneficiary Work Reporting. GAO-15-673T. Washington, D.C.: June 16, 2015. Supplemental Security Income: SSA Has Taken Steps to Prevent and Detect Overpayments, but Additional Actions Could be Taken to Improve Oversight. GAO-13-109. Washington, D.C.: December 14, 2012. Disability Insurance: SSA Can Improve Efforts to Detect, Prevent, and Recover Overpayments. GAO-11-724. Washington, D.C.: July 27, 2011.

Summary: SSA's DI program provides cash benefits to millions of Americans who can no longer work due to a disability. While most benefits are paid correctly, beneficiary or SSA error can result in overpayments—that is, payments made in excess of what is owed. In fiscal year 2015, SSA detected $1.2 billion in new overpayments, adding to growing cumulative debt. Further, when individuals inappropriately obtain benefits in certain situations, SSA can levy penalties or withhold benefits for a period of time. GAO was asked to study the use of these actions, and SSA efforts to recover overpayments. This report examined how and to what extent SSA recovers overpayments, and imposes penalties and sanctions. GAO analyzed data on existing DI overpayments and repayment amounts at the end of fiscal year 2015 to determine the effect of potential improvements in recovery methods on collection amounts; and reviewed relevant federal laws, regulations, policies, and studies. In fiscal year 2015, the Social Security Administration (SSA) recovered $857 million in Disability Insurance (DI) overpayments that it erroneously made to beneficiaries; however, SSA is missing opportunities to recover more. More than three-fourths of the recovered overpayments in fiscal year 2015 were collected by withholding all or a portion of a beneficiary's monthly benefits. SSA's policy is to set withholding repayment amounts based on a beneficiary's income, expenses, and assets, but its policy regarding which expenses are reasonable is not clear. Moreover, SSA cannot know if repayment periods and amounts are consistently determined due to a lack of oversight, such as supervisory review or targeted quality reviews. Further, SSA lacks concrete plans for pursuing other debt recovery options, while GAO's analysis suggests that some options could potentially increase collections from individuals having their benefits withheld. For example, about half of withholding plans at the end of fiscal year 2015 extended beyond SSA's standard 36-month time frame, and could be shortened. Making the minimum monthly repayment 10 percent of a beneficiary's monthly benefit, instead of the current $10 minimum, would shorten the median length of all scheduled withholding plans by almost a third (from 3.4 years to 2.3 years) and result in an additional $276 million collected over the next 5 years. While SSA officials reported an increase in recent years in the amount of civil monetary penalties imposed, SSA currently lacks reliable data to effectively track the disposition of penalties and administrative sanctions. For example, SSA cannot readily track the amounts ultimately collected from penalties, which are fines imposed by the Office of the Inspector General (OIG) and collected by SSA. Further, SSA currently has only two paths for collecting on penalties—withholding benefits and voluntary payment. A recent OIG audit found that the majority of uncollected penalty amounts it reviewed were from individuals who were not receiving SSA benefits and with whom SSA had no ongoing collection actions. SSA determined it is able to use certain alternative collection tools, such as wage garnishment, but only recently began drafting regulations to use them, and the regulations are still undergoing internal review. In addition, SSA lacks and had not explored obtaining authority to use other tools for collecting penalties that it uses for collecting overpayments—such as credit bureau reporting. Related to administrative sanctions, SSA could not provide reliable data on how often it imposes sanctions, a punishment in which benefit payments are temporarily stopped. SSA's process of manually entering sanctions information into a database may be subject to errors or omissions. Regional officials said this can result in incomplete information and staff not taking appropriate action on cases. SSA changed its procedure in 2013 to direct that all potential sanctions first be reviewed for potential prosecution or civil monetary penalties, but SSA's lack of reliable data prevents it from determining whether this new procedure achieved the intended effect of more consistent application of sanctions. In an internal evaluation of its procedures, SSA identified weaknesses with how sanctions decisions are tracked and communicated, but it is in the early stages of deciding how to address them. The shortcomings in SSA's use of penalties and sanctions potentially diminish the deterrent value of these actions against individuals who may fraudulently obtain benefits. GAO is making eight recommendations to SSA, including: clarify its policy and improve oversight related to debt repayment plans, pursue additional recovery options for overpayments and penalties, and improve its ability to track penalties and sanctions. SSA agreed with seven, but disagreed with a recommendation on debt recovery options. GAO maintains the options merit exploration, as discussed further in the report.