Need To Improve Internal Controls To Curtail Fraud and Abuse in the RRB Unemployment and Sickness Insurance Program

HRD-85-37: Published: Feb 27, 1985. Publicly Released: Feb 27, 1985.

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GAO assessed the Railroad Retirement Board's (RRB) controls for preventing and detecting fraud and abuse in its Unemployment and Sickness Insurance (SI) Program.

The program paid out about $1.4 billion in benefits during the last 5 years to 1 million qualified rail workers who became unemployed or were absent from work due to sickness. GAO found that, although 38 states collect wage records against which RRB could detect instances of persons working in nonrail employment while collecting unemployment or sickness benefits, RRB does not attempt to make such detections. Further, RRB does not have procedures to notify a rail employer that a claimant has filed for unemployment benefits. GAO also found that RRB makes no attempt to identify the prevalent problem of employees' claiming benefits using another person's record. GAO noted that RRB internal controls over sickness claims are also vulnerable to fraud or abuse.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: RRB completed the analysis of a computer match to identify questionable multiple payments in August 1986. No instances of fraud were uncovered. A final report is being prepared on the results of the analysis and will include recommendations on the frequency of future computer checks.

    Recommendation: RRB should, if it finds that implementation is feasible and cost-beneficial, periodically review the validity of multiple benefit checks being sent to the same address.

    Agency Affected: Railroad Retirement Board

  2. Status: Closed - Implemented

    Comments: As of September 1985, RRB mailed about 4,500 change-of-address notices in an attempt to identify instances of fraud and abuse.

    Recommendation: RRB should, if it finds that implementation is feasible and cost-beneficial, systematically verify reported changes of address.

    Agency Affected: Railroad Retirement Board

  3. Status: Closed - Implemented

    Comments: Since July 1985, RRB had notified rail employers that rail workers applied for benefits. Of 1350 replies received, RRB determined that about 190 require investigations.

    Recommendation: RRB should, if it finds that implementation is feasible and cost-beneficial, notify rail employers after a claimant has filed for unemployment benefits.

    Agency Affected: Railroad Retirement Board

  4. Status: Closed - Implemented

    Comments: State wage-benefit computer checks were initiated in Missouri, Indiana, Ohio, and Texas. More arrangements are to follow.

    Recommendation: RRB should, if it finds that implementation is feasible and cost-beneficial, initiate more systematic wage checks for nonrail employment by beneficiaries, including the regular use of computerized wage checks of beneficiaries with state employer wage records in those states which maintain such records, and where computerized wage checks are found to be cost-beneficial.

    Agency Affected: Railroad Retirement Board

  5. Status: Closed - Not Implemented

    Comments: The Board states in its lastest Federal Manager's Financial Integrity Act report that this was delayed because of other high priority work. RRB advised that, because of a tremendous backlog in automatic data processing programming requests, action on this recommendation is not feasible either in the short or long term. Therefore, the recommendation should be closed.

    Recommendation: RRB should, if it finds that implementation is feasible and cost-beneficial, require, as a minimum, some form of additional control to verify sickness claims.

    Agency Affected: Railroad Retirement Board

 

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