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.
Woman in a complex wheelchair and her caregiver
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.
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.
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
|Social Security Administration||1. 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)|
|Social Security Administration||2. 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)|
|Social Security Administration||3. 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)|
|Social Security Administration||4. 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)|
|Social Security Administration||
Priority Rec.5. 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)
|Social Security Administration||6. 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)|
|Social Security Administration||7. 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)|
|Social Security Administration||8. 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)|
|Social Security Administration||
Priority Rec.9. 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)