Fast Facts

Some Social Security beneficiaries rely on organizations like non-profits or nursing homes to help them manage their benefits. The Social Security Administration monitors these organizations to ensure benefits are not being misused.

Yet SSA does not require background checks for key employees of such organizations as it does for relatives or friends that assist beneficiaries. In addition, SSA accounting forms make it difficult to track in detail how these funds are spent.

We made 9 recommendations, including that SSA redesign its accounting forms and look into requiring background checks for employees at these organizations.

Social Security beneficiaries may rely on non-profits or other organizations to manage their benefits.

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Highlights

What GAO Found

The Social Security Administration (SSA) approves organizational payees—such as nursing homes or non-profits that manage the Social Security benefits of individuals unable to do so on their own—by assessing a range of suitability factors, such as whether the organizations have adequate staff to manage benefits for multiple individuals. However, GAO found that SSA's policy does not specify how to assess more complex suitability factors, such as whether an organization demonstrates sound financial management. Without clearer guidance, unqualified or ill-prepared organizational payees could be approved to manage benefits. Also, SSA does not currently require background checks for key employees of an organizational payee. In contrast, SSA requires background checks for individual payees—such as a relative or friend of the beneficiary. A comprehensive evaluation could help SSA determine whether and how to expand their use of background checks to organizational payees.

To ensure organizational payees are managing funds appropriately, SSA uses several monitoring tools, including resource-intensive onsite reviews. Certain organizational payees, such as those that charge fees for their services or have 50 or more beneficiaries (high-volume), receive onsite reviews every 3 to 4-years. In contrast, payees that serve fewer than 50 beneficiaries (low-volume)—the vast majority—are selected for review based on their estimated likelihood of misusing beneficiary funds, and a relatively low percent of them receive onsite reviews (see figure). SSA uses a predictive statistical model to identify higher risk low-volume payees, but the model's effectiveness cannot be fully assessed by GAO or others due to missing documentation on how it was designed. SSA officials said they will update the model in the future, but do not have a time frame for doing so. Establishing such a time frame and documenting design decisions are key steps toward assessing the model's effectiveness.

Number and Percentage of SSA Organizational Payees, by Payee Type, Reviewed Onsite in Fiscal Year 2018.

Fig HL-5 v07_102716

Another way SSA oversees organizational payees is by reviewing their annual accounting forms, but shortcomings exist in SSA's review of the form and in the form's content and design. For example, SSA lacks timeframes for following up on missing or problematic forms. Also, the accounting form does not capture complete information on whether payees co-mingle beneficiaries' funds in collective accounts, which can limit SSA's ability to monitor those risk-prone accounts. Establishing timeframes and revising the form could enhance the effectiveness of the annual accounting form as an oversight tool.

Why GAO Did This Study

Nearly a million individuals relied on organizational payees to manage their Social Security benefits in 2018. Due to an aging population more beneficiaries may need organizational payees in the future. These beneficiaries are among the most vulnerable because, in addition to being deemed incapable of managing their own benefits, they lack family or another responsible party to assume this responsibility. SSA reports that misuse of benefits by payees is rare, but its Office of Inspector General has identified cases of misuse that have harmed vulnerable beneficiaries. GAO was asked to review SSA's organizational payee program.

This review examines, among other things SSA's process for approving payees and its monitoring efforts. GAO reviewed relevant federal laws, regulations, policies, and guidance; analyzed SSA data from fiscal year 2018; analyzed the predictive statistical model SSA uses to select low-volume payees for on-site reviews; and interviewed SSA central office staff and regional, area, and field office staff in four regions selected for geographic diversity.

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Recommendations

GAO is making nine recommendations in this report, including that SSA: clarify how to assess complex suitability factors; assess requiring background checks for organizational payees; establish a timeframe for reviewing the predictive model and document design decisions resulting from that review; and establish timeframes for, and conduct revisions of the accounting form. SSA agreed with all nine recommendations and provided technical comments that GAO incorporated as appropriate.

Recommendations for Executive Action

Agency Affected Recommendation Status
Social Security Administration The Commissioner of the Social Security Administration should ensure that (a) the agency's policies and guidance are specific enough so field office staff know how to apply complex suitability criteria for assessing payee suitability, such as by providing a minimum set of specific questions; and (b) additional regional guidance that is made available to staff is centrally reviewed for compliance and completeness. (Recommendation 1)
Open
SSA agreed with this recommendation. In April 2020 and August 2021, the agency reported that it is reviewing its representative payee suitability policy to identify areas that need improvement. They anticipate their efforts to implement the recommendation will continue until FY2024.
Social Security Administration The Commissioner of the Social Security Administration should create safeguards in the Electronic Representative Payee System (eRPS) to ensure that field office staff fully document all required information, such as the rationale for their decision, before approving an application. (Recommendation 2)
Open
SSA agreed with this recommendation and identified actions to address it. Specifically, SSA reported that, as part of implementing the Strengthening Protections for Social Security Beneficiaries Act of 2018, planned changes to eRPS will improve documentation of selection decisions. In August 2021, the agency reported that it is evaluating eRPS's functionality to determine if it can support the documentation of representative payee selection decisions. SSA anticipates these efforts will continue until FY2024.
Social Security Administration The Commissioner of the Social Security Administration should complete a plan, including timeframes, for comprehensively evaluating if and how to leverage external sources of information on organizations' suitability, such as by conducting background checks or credit checks on organizations or key staff that handle beneficiaries' funds or requiring organizations to conduct their own background checks on key staff. (Recommendation 3)
Open
SSA agreed with this recommendation and identified actions to address it. Specifically, SSA officials stated that, after implementing provisions of the Strengthening Protections for Social Security Beneficiaries Act of 2018 related to background checks for certain individual payees, the agency plans to evaluate conducting criminal background checks and credit checks on organizational payees and their staff. In April 2020, the agency reported that it is researching existing data sources to assess whether to conduct credit checks on organizations that serve as representative payees and also determine how frequently to conduct the checks for payee suitability. In August 2021, the agency reported that it awarded a contract in September 2020 to research the use of credit reports in the selection and monitoring of organizational representative payees and anticipates that the research will be completed in the first quarter of FY2022. We will consider closing this recommendation when SSA provides documentation that these efforts are complete.
Social Security Administration The Commissioner of the Social Security Administration should develop and implement mechanisms to systematically obtain and review feedback from organizational payees and communicate findings to SSA management. (Recommendation 4)
Open
SSA agreed with this recommendation. In April 2020, the agency reported that it is evaluating potential communication channels that can be used to implement a systematic approach to obtain feedback from organizational representative payees. In August 2021, the agency reported that it had postponed the launch of its new feedback tool - Engage SSA - and is working on a new launch date. We will consider closing this recommendation when SSA provides documentation that these efforts are complete.
Social Security Administration
Priority Rec.
This is a priority recommendation.
The Commissioner of the Social Security Administration should (a) establish a plan and time frame for periodically reviewing the predictive model's design; (b) consider additional data sources that would allow for additional screening or modeling of potentially high-risk organizational payees; and (c) ensure that subsequent design decisions are documented in sufficient detail so the development process can be more fully understood and replicated, either by SSA or a knowledgeable third party, with minimal further explanation. (Recommendation 5)
Open
SSA agreed with this recommendation and identified actions to address it. In April 2020, SSA officials reported that the agency is finalizing a plan to revise the existing model and would pursue other data sources to develop additional screening tools and models to identify potentially high-risk organizational payees. They also reported that they are in the early stages of re-estimating the model used to identify potentially high-risk organizational payees. In addition, agency officials noted they are finalizing a review of nursing home data from the Center for Medicare and Medicaid Services (CMS) as a predictive variable for use in their new organizational payee misuse model. As of August 2021, the agency reported that it had completed its review of CMS data and found it would not enhance the current models' predictive power, and is developing the data set which will be used for model development. The agency also reported it plans to first replicate the model for control and documentation purposes, then update both models with newer data, then update the model itself. To close this recommendation, SSA needs to provide documentation of its efforts, including its plan for ensuring more timely updates.
Social Security Administration The Commissioner of the Social Security Administration should require field offices to contact payees about missing or problematic annual accounting forms within a specific time frame. (Recommendation 6)
Open
SSA agreed with this recommendation. In April 2020, the agency reported that it is evaluating the representative payee accounting process for opportunities to implement processing timeframes and system enhancements to address problematic accounting issues. In August 2021, the agency reported that it has experienced delays in these efforts due to COVID-19 and expects to implement accounting form processing timeframes and enhancements to the Electronic Representative Payee Accounting System in FY 2022. To close this recommendation, SSA should provide documentation that it has implemented these efforts..
Social Security Administration The Commissioner of the Social Security Administration should revise the annual accounting form to enhance its effectiveness. Such revisions could include (but not be limited to) more fully ascertaining the use of collective accounts, adopting stakeholders' recommendations on using the form to collect more meaningful data, and reflecting best practices from behavioral science insights in the design of the form. (Recommendation 7)
Open
SSA agreed with this recommendation. In April 2020, the agency reported that it continues to engage with agency stakeholders - including the User Experience Group - to identify revisions to the annual accounting form and redesign that reflects best practices from behavioral science insights. The agency expected to finalize the accounting form revisions in FY2021. In August 2021, SSA reported that it submitted to the Office of Management and Budget the initial changes to the annual representative payee accounting form, which included improved instructions and design changes in line with current accessibility requirements. However, the agency has not yet set an implementation date. To close this recommendation, SSA should provide documentation that it has implemented these efforts.
Social Security Administration The Commissioner of the Social Security Administration should enhance the eRPS system to ensure that field offices are (a) alerted when collective accounts are due to be reviewed; and (b) able to take action on expired collective account information and thereby avoid payees' continued use of these accounts without oversight. (Recommendation 8)
Open
The Social Security Administration took several steps to address this recommendation. In April 2020, the agency reported that field offices receive alerts in electronic Representative Payee System (eRPS) when collective account reviews are set to expire, and the agency said it would issue a reminder to field office technicians to review collective accounts in a timely manner. In November 2020, SSA reported that it verified that alerts are issued twice before collective account approvals expire (3 and 1 month prior) and that it implemented a change to eRPS to enable field office technicians to search for and view expired accounts. However, SSA clarified in June 2021 that staff are unable to make changes to collective accounts within 30 days of their expiration date. As a result, expired accounts can remain in use without approval until and unless representative payees submit new annual accounting forms alerting SSA of that collective account.. We will consider closing this recommendation after SSA provides documentation of actions to address this concern with collective accounts.
Social Security Administration
Priority Rec.
This is a priority recommendation.
The Commissioner of the Social Security Administration should, as it carries through with its plan to develop a risk assessment for the organizational payee program, ensure that that the plan reflects periodic consideration of findings from onsite reviews and audits. (Recommendation 9)
Closed - Implemented
SSA agreed with this recommendation. In September 2020, SSA published a report documenting the results of its fraud risk assessment of the representative payee program, covering both organizational as well as individual representative payees.. The risk assessment incorporated findings from onsite assessments and audits into its methodology. Furthermore, SSA reported that it plans to conduct an ongoing assessment of program risks every 3 years and consider audit findings within 5 years of assessment

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