Social Security Administration's Procedures for Allocating Administrative Costs to the Supplemental Security Income Program

HRD-78-12: Published: Nov 17, 1977. Publicly Released: Nov 17, 1977.

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The Social Security Administration (SSA) has highly integrated units with common management and support duties which administer programs such as the Supplemental Security Income for the aged, blind, and disabled. Since the administrative costs of the various programs are paid from different sources, SSA distributes these costs through a cost allocation system. The SSA method of allocating administrative costs to the Supplemental Security Income program is reasonable, but could be improved.

In fiscal year 1976, SSA administrative costs were $2.3 billion. The Supplemental Security Income program was allocated $484 million of this, about 21 percent. Social Security has over 1,300 field offices nationwide to carry out its responsibilities. In New York State, some field offices spent as much as 67 percent of their time on the Supplemental Security Income program while other offices spent very little time on the program. There are other large units within SSA which spent little or no time on the Supplemental Security Income program. SSA allocates its shared costs on the basis of benefits paid.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Health, Education, and Welfare should direct the Commissioner of Social Security to review and revise as appropriate the method for allocating shared costs between the trust funds and the Supplemental Security Income program to recognize the relative cost of doing a particular unit of work rather than allocating costs on the basis of benefits paid. The Commissioner should also review any changes in the various work measurement systems to insure that they continue to provide reliable data needed to allocate costs.

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