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. 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. 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. 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. 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. 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. 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. 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. 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. Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov. 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. 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.

Summary: 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. 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. 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.