SSI provides financial assistance to people who are age 65 or older, blind or disabled, and who have limited income and resources. The program provides individuals with monthly cash payments to meet basic needs for food, clothing, and shelter. Last year, about 6.8 million recipients were paid about $33 billion in SSI benefits. During the application process, SSA relies on state Disability Determination Services to make the initial medical determination of eligibility while SSA field offices are responsible for determining whether applicants meet the program’s nonmedical (age and financial) eligibility requirements. To receive SSI benefits in 2002, individuals may not have income greater than $545 per month ($817 for a couple) or have resources worth more than $2,000 ($3,000 for a couple). When applying for SSI, individuals are required to report any information that may affect their eligibility for benefits. Similarly, once individuals receive SSI benefits, they are required to report events, such as changes in income, resources, marital status, or living arrangements to SSA field office staff in a timely manner. A recipient’s living arrangement can also affect monthly benefits. Generally, individuals who rent, own their home, or pay their share of household expenses if they live with other persons receive a higher monthly benefit than those who live in the household of another person and receive food and shelter assistance. To a significant extent, SSA depends on program applicants and recipients to accurately report important eligibility information. However, to verify this information SSA uses computer matches to compare SSI records against recipient information contained in records of third parties, such as other federal and state government agencies. To determine whether recipients remain financially eligible for SSI benefits after the initial assessment, SSA also periodically conducts redetermination reviews to verify eligibility factors such as income, resources, and living arrangements. Recipients are reviewed at least every 6 years, but reviews may be more frequent if SSA determines that changes in eligibility are likely. Since its inception, the SSI program has been difficult and costly to administer because even small changes in monthly income, available resources, or living arrangements can affect benefit amounts and eligibility. Complicated policies and procedures determine how to treat various types of income, resources, and in-kind support and maintenance that a recipient receives. SSA must constantly monitor these situations to ensure benefit amounts are paid accurately. On the basis of our work, which spans more than a decade, we designated SSI a high-risk program in 1997 and initiated work to document the underlying causes of longstanding SSI program problems and the impact these problems have had on program performance and integrity. In 1998, we reported on a variety of management problems related to the deterrence, detection, and recovery of SSI overpayments. Over the last several years, we also testified about SSA’s progress in addressing these issues (see app. I). Since 1998, SSA has demonstrated a stronger management commitment to SSI program integrity issues. SSA has also expanded the use of independent data to verify eligibility factors and enhanced its ability to detect payment errors. Today, SSA has far better capability to more accurately verify program eligibility and detect payment errors than it did several years ago. However, weaknesses remain in its debt prevention and deterrence processes. SSA has made limited progress toward simplifying complex program rules that contribute to payment errors and is not fully utilizing several overpayment prevention tools, such as penalties and the suspension of benefits for recipients who fail to report eligibility information as required. Since our 1998 report, SSA has taken a variety of actions that demonstrate a fundamental change in its management approach and a much stronger commitment to improved program integrity. First, SSA issued a report in 1998 that outlined its strategy for strengthening its SSI stewardship role.This report highlighted specific planned initiatives to improve program integrity and included timeframes for implementation. In addition to developing a written SSI program integrity strategy, SSA submitted proposals to Congress requesting new authorities and tools to implement its strategy. In December 1999, Congress provided SSA with several newly requested tools in the Foster Care Independence Act of 1999. The act gave SSA new authorities to deter fraudulent or abusive actions, better detect changes in recipient income and financial resources, and improve its ability to recover overpayments. Of particular note is a provision in the act that strengthened SSA’s authority to obtain applicant resource information from banks and other financial institutions. SSA’s data show that unreported financial resources, such as bank accounts, are the second largest source of SSI overpayments. SSA also sought and received separate legislative authority to penalize persons who misrepresent material facts essential to determining benefit eligibility and payment amounts. SSA can now impose a period of benefit ineligibility ranging from 6 to 24 months for individuals who knowingly misrepresent facts. SSA also made improved program integrity one of its five agency strategic goals and established specific objectives and performance indicators to track its progress towards meeting this goal. For example, the agency began requiring its field offices to complete 99 percent of their assigned redetermination reviews and other cases where computer matching identified a potential overpayment situation due to unreported wages, changes in living arrangements, or other factors. During our review, most field staff and managers that we interviewed told us that SSA’s efforts to establish more aggressive goals and monitor performance toward completing these reviews was a clear indication of the new enhanced priority it now places on ensuring timely investigation of potential SSI overpayments. To further increase staff attention to program integrity issues, SSA also revised its work measurement system—used for estimating resource needs, gauging productivity, and justifying staffing levels—to include staff time spent developing information for referrals to its Office of Inspector General (OIG). In prior work, we reported that SSA’s own studies showed that its employees felt pressured to spend most of their time on “countable” workloads, such as quickly processing and paying claims rather than on developing fraud referrals for which they received no credit. Consistent with this new emphasis, the OIG also increased the level of resources and staff devoted to investigating SSI fraud and abuse; key among the OIG’s efforts is the formation of Cooperative Disability Investigation (CDI) teams in 13 field locations. These teams consist of OIG investigators, SSA staff, state or local law enforcement officers, and state DDS staff who investigate suspicious medical claims through surveillance and other techniques. A key focus of the CDI initiative is detecting fraud and abuse earlier in the disability determination process to prevent overpayments from occurring. The OIG reported that the teams saved almost $53 million in fiscal year 2001 in improper benefit payments by providing information that led to a denial of a claim or the cessation of benefits. Finally, in a June 2002 corrective action plan, SSA reaffirmed its commitment to taking actions to facilitate the removal of the SSI program from our high-risk list. This document described SSA’s progress in addressing many of the program integrity vulnerabilities we identified and detailed management’s SSI program priorities through 2005. To ensure effective implementation of this plan, SSA has assigned senior managers responsibility for overseeing key initiatives, such as piloting new quality assurance systems. The report also highlighted several other program integrity initiatives under consideration by SSA, including plans to test whether touchtone telephone technology can improve the reporting of wages, credit bureau data can be used to detect underreported income, and public databases can help staff identify unreported resources, for example, automobiles and real property. To assist field staff in verifying the identity of recipients, SSA is also exploring the feasibility of requiring new SSI claimants to be photographed as a condition of receiving benefits. In prior work, we noted that SSA’s processes and procedures for verifying recipients’ income, resources, and living arrangements were often untimely and incomplete. In response to our recommendations, SSA has taken numerous actions to verify recipient reported information and better detect and prevent SSI payment errors. SSA has made several automation improvements to help field managers and staff better control overpayments. For example, last year, the agency distributed software nationwide that automatically scans multiple internal and external databases containing recipient financial and employment information and identifies potential changes in income and resources. The system then generates a consolidated report for use by staff when interviewing recipients. SSA also made systems enhancements to better identify newly entitled recipients with uncollected overpayments from a prior coverage period. Previously, each time an individual came on and off the rolls over a period of years, staff had to search prior SSA records and make system inputs to bring forward any outstanding overpayments to current records. The process of detecting overpayments from a prior eligibility period and updating recipient records now occurs automatically. SSA’s data show that, since this tool was implemented in 1999, the monthly amount of outstanding overpayments transferred to current records increased on average by nearly 200 percent, from $12.9 million a month to more than $36 million per month. Thus, a substantial amount of outstanding overpayments that SSA might not have detected under prior processes is now subject to collection action. Nearly all SSA staff and managers that we interviewed told us that systems enhancements have improved SSA’s ability to control overpayments. In commenting on this report, SSA said that it will soon implement another systems enhancement to improve its overpayment processes. SSA will automatically net any overpayments against underpayments that exist on a recipient’s record before taking any recovery or reimbursement actions. Presently, netting requires SSA employees to record a series of transactions and many opportunities to recover overpayments by netting them against existing underpayments are lost. SSA estimates that automating the netting process will reduce overpayments by up to $60 million each year, with a corresponding reduction in underpayments paid to beneficiaries. In addition to systems and software upgrades, SSA now uses more timely and comprehensive data to identify information that can affect SSI eligibility and benefit amounts.