Debt Management:

More Aggressive Actions Needed to Reduce Billions in Overpayments

HRD-91-46: Published: Jul 9, 1991. Publicly Released: Aug 8, 1991.

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Pursuant to a congressional request, GAO provided information on debt management practices at the Social Security Administration (SSA), Railroad Retirement Board (RRB), Office of Personnel Management (OPM), and Department of Veterans Affairs (VA).

GAO found that: (1) SSA has made little progress in controlling and collecting benefit overpayments, with its collection rate remaining at about 28 percent between fiscal years (FY) 1986 and 1989; (2) SSA was unable to collect a higher percentage of its overpayments due to a lack of emphasis on debt collection, fragmented responsibility for managing and collecting overpayments, legal restrictions on using certain collection methods that other agencies used, and improper use of policies and procedures governing the recovery of overpayments; (3) SSA proposed a legislative strategy to request the authority to use collection methods under the Debt Collection Act of 1982; (4) between FY 1986 and 1989, RRB collected about 55 percent of its total outstanding overpayments, OPM about 55 percent, and VA about 30 percent; (5) OPM and VA could increase their overpayments collections if they used all of the collection methods required by law; and (6) OPM and RRB had fragmented organizations for debt collection, but RRB was working on centralizing this function.

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: To improve overpayment recovery, the Director, Office of Management and Budget (OMB), should direct that the Secretary of Veterans Affairs assess interest and administrative costs on overpayments, as required by the Veterans Rehabilitation and Education Amendments of 1980.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: OMB has directed VA to assess interest and penalties in accordance with the recommendation.

    Recommendation: The Commissioner of Social Security should establish specific dollar collection goals for recovering debts owed by former beneficiaries.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: SSA has set specific collection objectives for agencywide debt collection efforts as part of its implementation of the Results Act. These collection goals will specifically target collections from former beneficiaries.

    Recommendation: The Commissioner of Social Security should adhere to the federal claims collection standards and SSA policies governing timely action on debt recovery, establishing appropriate plans for repayment, and using credit bureaus to locate delinquent debtors.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: Legislation has been enacted giving SSA authority to use a wide range of debt collection activities. This should help SSA to collect more debt and to collect debt timely.

    Recommendation: The Commissioner of Social Security should accelerate completing the management information system needed to support effective debt management.

    Agency Affected: Social Security Administration

    Status: Closed - Implemented

    Comments: SSA has developed a new system to track the recovery of overpayments. It has also implemented a new management information system to provide management with the necessary information to fully track and control debt as it proceeds through the system.

    Recommendation: The Commissioner of Social Security should require the debt collection units in the program service centers and others involved in the recovery of overpayments to report to, and be accountable to, DCFAM for all debt management matters.

    Agency Affected: Social Security Administration

    Status: Closed - Not Implemented

    Comments: After investigating whether to reorganize all debt management activities under the Deputy Commissioner for Finance, Assessment, and Management, SSA has decided not to adopt the GAO recommendation.

    Recommendation: The Commissioner of Social Security should assign central responsibility for debt management to the Deputy Commissioner for Finance, Assessment, and Management (DCFAM).

    Agency Affected: Social Security Administration

    Status: Closed - Not Implemented

    Comments: SSA has been authorized to use a wide range of debt collection tools previously denied to it. This should enhance its ability to collect more debt and obviate the need to centralize the debt collections activities.

    Recommendation: To improve overpayment recovery, the Director, OMB, should direct the Director, OPM, to collect overpayments through deductions from taxpayer income tax refunds, as required by the Deficit Reduction Act.

    Agency Affected: Executive Office of the President: Office of Management and Budget

    Status: Closed - Implemented

    Comments: OPM collected overpayments through Internal Revenue Service tax refund offset beginning in 1993.

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