Social Security:

Costs Associated with the Administration's Efforts to Promote Program Reforms

GAO-07-621R: Published: Aug 10, 2007. Publicly Released: Sep 7, 2007.

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Congress requested that GAO identify the official Social Security reform public speaking events and other promotion initiatives involving administration officials, and their costs to the federal government, since January 2005. As you know, the Social Security Board of Trustees is projecting in its 2007 report that as early as 2017 Social Security benefit payments will exceed tax revenues. After that time, the gap between costs and tax revenues grows continuously, and unless action is taken to close this gap, it is currently estimated that the Social Security trust funds will be depleted by 2041. In his 2005 State of the Union Address, the President emphasized the need to reform Social Security, and he announced his intention to work with the Congress to achieve reforms. On March 2, 2005, the Secretary of the Treasury announced the "60 Stops in 60 Days" tour in which the President and other administration officials would speak to the public about the need for reform in a series of town hall meetings across the country in an attempt to gain popular support for program reforms. Congress asked us to include events such as those associated with the "60 Stops in 60 Days" tour and initiatives such as the Social Security Information Center (SSIC) established at the Department of the Treasury (Treasury) to provide a focal point for the administration's Social Security reform activities. To answer Congress's question about the list of public speaking events and other promotion initiatives, we relied upon information supplied by the Social Security Administration (SSA), Treasury, and the Executive Office of the President (EOP), including information posted to Treasury's and the White House's Web sites. To answer Congress's question about the cost of the public speaking events and other promotion initiatives, we focused our work on the activities of SSA, Treasury, and EOP, which accounted for approximately 75 percent of the public speaking events.

GAO identified 228 public speaking events to promote the Social Security reform initiative, of which there were 40 presidential events, 7 vice presidential events, and 122 events with officials from EOP, SSA, or Treasury. We primarily focused on these 169 events (almost 75 percent of the 228 public speaking events) and are reporting cost information we obtained for these events. We also identified many other promotion initiatives, including radio addresses and interviews and the establishment of a Treasury Web site. The direct and incremental costs for the 169 events and other initiatives were a reported $2,588,367 for staging, travel, and other direct costs. The largest portion was for reported reimbursements to EOP from Treasury, the Department of Health and Human Services, and Labor for staging costs totaling $1,651,460, while reported travel costs included $437,887 for the use of Air Force One and Air Force Two, $369,838 for EOP officials' travel, and $66,794 for travel by Treasury and SSA officials. EOP reported $62,388 in other direct costs to support its public speaking events. Treasury reported an additional $222,608 in other initiative costs to establish and operate its SSIC and Strengthening Social Security Web site, bringing the total reported costs to $2,810,975. In addition to reporting the scope limitation imposed by EOP which prevents us from providing reasonable assurance that the costs reported to us are complete and fully supported, we are reporting a deficiency we found in how Treasury handled its interagency agreements with EOP. Treasury did not have supporting documentation for amounts it reimbursed EOP under the interagency agreements to pay for staging costs associated with Social Security reform events. We are making a recommendation to Treasury that it strengthen its guidance on obtaining, reviewing, and retaining supporting documentation for reimbursements under interagency agreements.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: On May 31, 2007, Treasury issued updated guidance, Acquisition Bulletin 07-03. The bulletin requires the servicing agency to provide documentation supporting all charges, including invoices if used, to the requesting agency's Contracting Officer Technical Representative/Point of Contact (COTR/POC). The bulletin also provides that the requesting agency COTR/POC and the servicing agency program office are to be responsible for technical oversight of the specific product or service, including documentation of receipt and acceptance of goods or services in support of payments. As of July 6, 2011, Treasury's website for Procurement Policy and Regulations lists Acquisition Bulletin 07-03 as an active Treasury Acquisition Bulletin.

    Recommendation: To strengthen Treasury's oversight of its interagency agreements, the Secretary of the Treasury should direct the Chief Financial Officer of the department to strengthen the department's guidance to clarify that sufficient documentation to support reimbursements made through interagency agreements is to be obtained, reviewed, and retained.

    Agency Affected: Department of the Treasury


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