Railroad Retirement Board:

Internal Controls for Unemployment Program Improving, but Gaps Remain

HRD-90-42: Published: May 3, 1990. Publicly Released: May 3, 1990.

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contact@gao.gov

 

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Pursuant to a legislative requirement, GAO reviewed the railroad unemployed-sickness benefits program's internal controls for safeguarding against fraud and payment error.

GAO found that: (1) despite recently strengthened internal controls, gaps existed in controls for processing benefits and in computer operations that could permit fraud and errors to go undetected; (2) there was no assurance that the people filling out required physician certificates were the applicants' physicians, which presented the opportunity for applicants to falsify certificates and make fraudulent claims; (3) documents used to enter data into a computer were not adequately controlled; (4) the Railroad Retirement Board's (RRB) computer documentation indicated that incorrect and unauthorized software was used to process benefits; (5) security for the RRB computer center was inadequate, creating opportunities for theft, loss, unauthorized use, and fraudulent activities; (6) standards required screening of all computer personnel before hiring to ensure their integrity and guard against fraud, but RRB failed to investigate the background of all computer employees; and (7) RRB personnel did not manually verify whether claimants were working, and computer generation of potential wage-reporting violations took months to resolve.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Chairman, RRB, should improve control for validity of physician certificates of sickness by implementing an earlier GAO recommendation that physicians: (1) provide their tax identification numbers with the certificates; and (2) deal directly with RRB, rather than through claimants.

    Agency Affected: Railroad Retirement Board

    Status: Closed - Implemented

    Comments: Use of revised medical information forms that require physicians to furnish tax identification numbers was implemented January 14, 1991. On January 31, 1991, an on-line comparison of the tax ID numbers furnished on medical statements with a database of valid numbers was initiated. Discrepancies are investigated through questionnaires sent directly to physicians.

    Recommendation: The Chairman, RRB, should strengthen controls to ensure that only properly authorized computer programs are used, the computer center is secure, and all computer personnel receive background security checks.

    Agency Affected: Railroad Retirement Board

    Status: Closed - Implemented

    Comments: RRB installed a software program that will automatically keep source and load modules in proper synchronization. The security access system for the computer facility is fully operational. RRB now conducts security investigations on all employees who are in sensitive positions.

    Recommendation: The Chairman, RRB, should provide better control for documents used to enter data so the documents cannot be lost or manipulated.

    Agency Affected: Railroad Retirement Board

    Status: Closed - Implemented

    Comments: RRB has developed procedures to improve control of original entry documents.

    Recommendation: The Chairman, RRB, should alter procedures to ensure adequate separation of claims-processing and payment authorization activities.

    Agency Affected: Railroad Retirement Board

    Status: Closed - Implemented

    Comments: Procedures were implemented on October 1, 1991 to conduct quality control reviews of a statistically valid sample of unemployment and sickness insurance claims transactions resulting in benefit payments of less than $1,000. Procedures requiring separate authorization of payments of $1,000 or more were also implemented.

    Recommendation: The Chairman, RRB, should increase the: (1) priority for resolving discrepancies disclosed by computer matches of benefit payments with state employment records; and (2) number of manual matches in states in which computer match agreements have not been negotiated. A cost-benefit analysis should be carried out, however, to ensure that the benefits derived exceed the costs incurred.

    Agency Affected: Railroad Retirement Board

    Status: Closed - Implemented

    Comments: Guidance on resolving discrepancies from computer matches has been issued to responsible personnel. The number of computer matching programs with state agencies has been increased significantly, with agreements in place with 35 states, as of September 1, 1991. Efforts are on-going to secure agreements with all other states. Automated selection of cases is in place.

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