oversight

Major Management Challenges and Program Risks: Social Security Administration

Published by the Government Accountability Office on 2003-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Performance and Accountability Series




January 2003
               Major Management
               Challenges and
               Program Risks
               Social Security
               Administration




GAO-03-117
               a
A Glance at the Agency Covered in This Report
The Social Security Administration’s mission is to promote the economic security
of the nation’s people. It administers three major federal programs that provide
benefits to more than 50 million people.
●   Old Age and Survivors Insurance and Disability Insurance, together commonly
    known as Social Security, provide benefits to retired and disabled workers and
    their dependents and survivors. These benefits are paid from trust funds
    financed through payroll taxes paid by workers and their employers and by the
    self-employed.
●   Supplemental Security Income provides income for aged, blind, or disabled
    individuals with limited income and resources and is financed from general
    tax revenues.


The Social Security Administration’s Budgetary and Staff Resources


Budgetary Resources a,b                                                Staff Resources b
Dollars in billions                                                    FTEs in thousands
                                                                             64        63                 63          63
560                                                                    64                        62
                                                  522
                                       498
                             465
         425       439
420                                                                    48


280                                                                    32


140                                                                    16


    0                                                                   0
        1998      1999      2000      2001        2002                      1998      1999      2000     2001         2002
        Fiscal year                                                         Fiscal year
Source: Budget of the United States Government.

a Budgetary resources include new budget authority (BA) and unobligated balances of previous BA. Totals
    include trust fund as well as general fund dollars.
b Budget and staff resources are actuals for FY 1998-2001. FY 2002 are estimates from the FY 2003 budget, which
    are the latest publicly available figures on a consistent basis as of January 2003. Actuals for FY 2002 will be
    contained in the President’s FY 2004 budget to be released in February 2003.




This Series
This report is part of a special GAO series, first issued in 1999 and updated in
2001, entitled the Performance and Accountability Series: Major Management
Challenges and Program Risks. The 2003 Performance and Accountability Series
contains separate reports covering each cabinet department, most major
independent agencies, and the U.S. Postal Service. The series also includes a
governmentwide perspective on transforming the way the government does
business in order to meet 21st century challenges and address long-term fiscal
needs. The companion 2003 High-Risk Series: An Update identifies areas at high risk
due to either their greater vulnerabilities to waste, fraud, abuse, and
mismanagement or major challenges associated with their economy, efficiency, or
effectiveness. A list of all of the reports in this series is included at the end of
this report.
                                                    January 2003


                                                    PERFORMANCE AND ACCOUNTABILITY SERIES

                                                    Social Security Administration
Highlights of GAO-03-117, a report to
Congress included as part of GAO’s
Performance and Accountability Series




 In its 2001 performance and                        SSA has made progress in addressing problems with the integrity of the SSI
 accountability report on the Social                program and in playing a more active role in research, evaluation, and policy
 Security Administration (SSA),                     development. Nevertheless, because of ongoing concerns about the
 GAO identified important issues                    positioning of SSA’s disability programs to provide meaningful and timely
 relating to research capacity, its                 support to Americans with disabilities, GAO has added modernizing federal
 process for determining disability,                disability programs to the 2003 high-risk list. In addition, the agency is
 management of a high-risk                          continuing to face management challenges and needs to:
 Supplemental Security Income
 (SSI) program, future service                      •   Continue to strengthen the integrity of the SSI program. SSA’s
 delivery plans, and protection of
 information facing the agency. The
                                                        progress in developing new tools to improve SSI’s financial integrity and
 information GAO presents in this                       management warrants removing the program’s high-risk designation.
 report is intended to help to sustain                  However, the agency must completely implement the reforms it has
 congressional attention and an                         undertaken and identify and move forward with options to simplify the
 agency focus on continuing to                          program’s complex policies.
 make progress in addressing these
 challenges and ultimately                          •   Improve SSA’s programs that provide support for individuals with
 overcoming them. This report is                        disabilities. Improving these programs will require updating disability
 part of a special series of reports                    criteria to reflect advances in medicine and technology, and changes in
 on governmentwide and agency-                          the workforce and developing a comprehensive return-to-work strategy.
 specific issues.
                                                        Further, after years of efforts to redesign its disability claims process,
                                                        applicants still face a time-consuming process. However, the agency’s
                                                        new Commissioner has made its improvement a priority and has
 GAO believes that SSA should                           implemented several short-term initiatives to speed up the processing of
                                                        disability claims on appeal.
 •     sustain and expand the range
       of SSI program integrity                     •   Better position SSA for future service delivery challenges. SSA
       initiatives underway,                            has conducted extensive analyses of future staff retirements, but it has
                                                        made decisions about succession planning and allowed early retirements
 •     develop a long-term strategy                     without a concrete service delivery plan to detail how and where it will
       for improving timeliness of                      provide services in the future. In addition, its investments in information
       claims processing and                            technology to facilitate service delivery need to be more closely tied to
       consistency in decisionmaking,
                                                        service delivery goals and objectives.
 •     develop a comprehensive
       return-to-work strategy for                  •   Strengthen controls to protect the personal information SSA
       individuals with disabilities,                   develops and maintains. Concerns about the widespread use of social
       and                                              security numbers (SSN), compounded by the terrorist attacks on
                                                        September 11, 2001, have heightened the need to assess how SSNs are
 •     develop a concrete service                       issued and protected and how Social Security data are used by law
       delivery plan.                                   enforcement agencies in safeguarding national security. Since the
                                                        attacks, SSA has further restricted the assignment of SSNs to individuals
                                                        not authorized to work and implemented new procedures for verifying
www.gao.gov/cgi-bin/getrpt?GAO-03-117.                  the authenticity of identity documents to ensure that only those with a
                                                        legal right to SSNs receive them.
To view the full report, click on the link above.
For more information, contact Barbara D.
Bovbjerg at (202) 512-7215 or
bovbjergb@gao.gov.
Contents



Transmittal Letter                                                                                                    1


Major Performance                                                                                                     2

and Accountability
Challenges

GAO Contacts                                                                                                         27


Related GAO Products                                                                                                 28


Performance and                                                                                                      31
Accountability and
High-Risk Series




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                       Page i                                                            GAO-03-117 SSA Challenges
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                           Comptroller General
                                                                                           of the United States




           January 2003                                                                                           T
                                                                                                                  ransmL
                                                                                                                       ta
                                                                                                                        ileter




           The President of the Senate
           The Speaker of the House of Representatives

           This report addresses the major management challenges facing the Social Security Administration
           (SSA) as it seeks to carry out its goal to “promote the economic security of the nation’s people
           through compassionate and vigilant leadership in shaping and managing America’s social security
           programs.” This report discusses the actions that SSA has taken and that are under way to address
           the challenges GAO identified in its Performance and Accountability Series 2 years ago, and major
           events that have occurred that significantly influence the environment in which the agency carries out
           its mission. Also, this report summarizes the challenges that remain and further actions that GAO
           believes are needed.

           This analysis should help the new Congress and the administration carry out their responsibilities and
           improve government for the benefit of the American people. For additional information about this
           report, please contact Barbara D. Bovbjerg, Director, Education, Workforce, and Income Security, at
           (202) 512-7215 or at bovbjergb@gao.gov.




           David M. Walker
           Comptroller General
           of the United States




                                                                                    GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges

              In our January 2001 management challenges report,1 we identified the
              following performance and management challenges that the Social Security
              Administration (SSA) needed to face: (1) playing an active research,
              evaluation, and policy development role; (2) improving its disability
              determination and return-to-work processes; (3) sustaining management
              and oversight of long-standing, high-risk Supplemental Security Income
              (SSI) issues; (4) better positioning itself for future service delivery
              challenges; and (5) further strengthening controls to protect SSA
              information.

              Our January 2001 report also identified the long-term solvency and
              sustainability of the social security system as one of the most urgent policy
              challenges facing the nation and SSA. At issue is how to make SSA’s
              programs fiscally sustainable as life expectancy increases and large
              numbers of Americans born in the baby boom generation become eligible
              for retirement. Over the past few years, a wide array of proposals has been
              put forth to restore Social Security’s long-term solvency, and in December
              2001, a commission appointed by the President presented three alternative
              proposals for reform. However, as the time approaches when Social
              Security’s expenditures will exceed its income, there is still no consensus
              on a plan for reforming the social security system. Although policy
              decisions regarding Social Security’s future are urgently needed, the
              challenges of addressing this problem are of a policy nature, and are not yet
              management challenges. Decisions about Social Security’s future, once
              made, will pose implementation challenges that may well challenge SSA’s
              management capacity farther in the future.

              Since our January 2001 report, two events have occurred that have
              influenced the assessment of SSA’s management challenges. First, the
              terrorist attacks of September 11, 2001, and the indication that some of the
              terrorists fraudulently obtained social security numbers (SSN) have
              heightened concerns about protecting personal information and raised new
              concerns about using personal information such as the SSN. In the
              aftermath of the terrorist attacks, there is a greater urgency to find the
              proper balance between the widespread and legitimate uses of personal
              information such as SSNs by both government and the private sector and
              the need to protect SSNs from nonlegitimate access and use. Second, with
              the confirmation of a new Commissioner to a 6-year term in November


              1
                U.S. General Accounting Office, Major Management Challenges and Program Risks:
              Social Security Administration, GAO-01-261 (Washington, D.C.: January 2001).




              Page 2                                                     GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




2001, SSA has sharpened its focus on addressing the challenges we
previously identified. Building on work begun under the prior
Commissioner, the agency has made considerable progress in addressing
weaknesses in the integrity of the SSI program since our 2001 management
challenges report. For example, SSA developed new tools to verify
financial eligibility, established access to electronic databases to facilitate
more timely verification of eligibility information, and expanded the
methods it uses to collect overpayments. We are satisfied that this
progress is sufficient to remove the high-risk designation of the integrity of
the SSI program but caution that sustained management attention is
needed to ensure that the implementation of all reforms is completed.
Therefore, strengthening the integrity of the SSI program remains a major
management challenge. Likewise, SSA has taken steps to strengthen its
research, evaluation, and policy development activities such as funding
outside research through its Retirement Research Consortium and
Disability Research Institute and we have eliminated this issue as a
separate management challenge. Nevertheless, the maintenance of these
capabilities is vital to informing the debate over the long-term solvency of
the social security system as well as addressing SSA’s continuing
management challenges, particularly in the disability area.

In spite of the increased focus on addressing the challenges we identified in
our January 2001 report, many challenges remain. For example, while SSA
has taken some steps to plan better for future service delivery changes and
the information technology to support them, much work remains. Of
greater concern are the complex challenges facing SSA’s disability
programs. SSA paid nearly $80 billion in cash benefits to nearly 11 million
people with a work-related disability and their families in 2001. These
programs are growing, despite greater opportunities for people with
disabilities to work. This growth is occurring at the same time that SSA is
struggling to provide timely, consistent disability decisions to applicants.
While the agency is taking actions to address these problems in the short
term, longer-term solutions must include more fundamental changes to the
programs, including those that may require legislative action. Because of
these sustained challenges, we have added modernizing federal disability
programs to our 2003 high-risk list.




Page 3                                                 GAO-03-117 SSA Challenges
                         Major Performance and Accountability
                         Challenges




                         In summary, SSA faces the following major management challenges that
                         will further affect its ability to administer critical programs.




                              Performance and
                              Accountability Challenges
                                  Continue to strengthen the integrity of the SSI program

                                  Improve programs that provide support for individuals with disabilities

                                  Better position SSA for future service delivery challenges, including information
                                  technology

                                  Strengthen controls to protect the personal information SSA develops and
                                  maintains




SSA’s Progress in        The SSI program is the nation’s largest cash assistance program for the
                         poor. We designated SSI a high-risk program in 1997, after several years of
Addressing SSI           reporting on specific instances of abuse and mismanagement, increasing
Overpayment Issues       overpayments, and poor recovery of outstanding SSI overpayments. The
                         SSI program poses a special challenge for SSA because, unlike Old Age and
Warrants Removal of      Survivors Insurance (OASI) and Disability Insurance (DI), it is a means-
High-Risk Designation,   tested program; thus, SSA must collect and verify information on income,
but Management           resources, and recipient living arrangements to determine initial and
                         continuing eligibility for the program.
Challenges Remain
                         In response to our high-risk designation, SSA has made sufficient progress
                         in improving SSI’s financial integrity and management to warrant removing
                         its high-risk designation. SSA’s actions include developing a major SSI
                         legislative proposal with numerous overpayment deterrence and recovery
                         provisions. Many of these provisions were incorporated into the Foster
                         Care Independence Act, which was signed into law in December 1999. The
                         act directly addresses a number of our prior recommendations and


                         Page 4                                                             GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




provides SSA with additional tools to obtain applicant income and resource
information from financial institutions; imposes a period of ineligibility for
applicants who transfer assets to qualify for SSI benefits; and authorizes
the use of credit bureaus, private collection agencies, interest levies, and
other means to recover overpayments. SSA also obtained separate
legislative authority in 1998 to recover overpayments from former SSI
recipients who currently receive OASI or DI benefits and has recently
begun the process of recovering overpayments from Social Security
benefits of individuals no longer on the SSI rolls.

In addition to obtaining the new legislative authorities, SSA has initiated a
number of internal administrative actions to further strengthen SSI
program integrity. These include using tax refund offsets for collecting SSI
overpayments, an action that SSA said resulted in $221 million in additional
overpayment recoveries from 1998 through the end of calendar year 2001.
SSA also uses more frequent (monthly) automated matches to identify
ineligible SSI recipients living in nursing homes and other institutions. As
of January 2001, SSA’s field offices also gained on-line access to wage, new-
hire, and unemployment insurance data maintained by the Office of Child
Support Enforcement. These data are key to field staff’s ability to more
quickly verify employment and income information essential to
determining SSI eligibility and benefit levels. Since 1998, the number of
state agencies allowing direct SSA on-line access to state data has nearly
doubled. In addition, SSA increased the number of SSI financial
redeterminations that it conducted, from about 1.8 million in fiscal year
1997 to about 2.4 million in fiscal year 2001. These reviews focus on income
and resource factors affecting eligibility and payment amounts.

SSA’s Office of Inspector General (OIG) has also increased the level of
resources and staff devoted to investigating SSI fraud and abuse. Key
among these efforts is the formation of Cooperative Disability Investigation
teams in 13 field locations. These teams are designed to identify fraud and
abuse before SSI benefits are approved and paid. Finally, in response to our
prior recommendation,2 SSA has revised its field office work credit and
measurement system to better reward staff for time spent developing fraud
referrals. If properly implemented, such measures should provide field staff



2
  U.S. General Accounting Office, Supplemental Security Income: Action Needed on Long-
Standing Problems Affecting Program Integrity, GAO/HEHS-98-158 (Washington, D.C.:
Sept. 14, 1998).




Page 5                                                      GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




with much needed incentives for preventing fraud and abuse and
controlling overpayments.

Although SSA’s current initiatives demonstrate a stronger management
commitment to SSI integrity issues and have the potential to significantly
improve program management, their impacts are still not fully realized. A
number of the agency’s initiatives—especially those associated with the
Foster Care Independence Act—are in the early planning or
implementation stages and have yet to yield results. In addition, at this
stage, the effect of SSA’s enhanced matching efforts, on-line access tools,
and other internal initiatives on the agency’s ability to recover and avoid
overpayments is unknown. Also unknown is the effect of the agency’s
efforts to improve the accuracy of SSI financial eligibility decisions. Thus,
ongoing and outstanding overpayments are still at high levels, even though
the prospects for reduction have improved.

SSA also has not yet addressed a key program vulnerability—program
complexity—that is associated with SSI overpayments. In prior work, we
have reported that SSI living arrangement and in-kind support and
maintenance policies used by SSA to calculate eligibility and benefit
amounts were complex, prone to error, and a major source of
overpayments.3 In the same report, we also recommended that SSA
develop options for simplifying the program. Last year, SSA’s policy office
issued a study that discussed various options for simplifying complex SSI
policies. Although SSA is considering various options, it has not moved
forward in recommending specific proposals for change.

We believe that sustained management attention is necessary to improve
SSI program integrity. Following our most recent review of SSA’s progress,4
the agency agreed with our recommendations to

• sustain and expand its program integrity activities underway and
  continue to develop additional tools to improve program operations and
  management;




3
    GAO/HEHS-98-158.
4
  U.S. General Accounting Office, Supplemental Security Income: Progress Made in
Detecting and Recovering Overpayments, but Management Attention Should Continue,
GAO-02-849 (Washington, D.C.: Sept. 16, 2002).




Page 6                                                   GAO-03-117 SSA Challenges
                      Major Performance and Accountability
                      Challenges




                      • identify and move forward with implementing cost-effective options for
                        simplifying complex policies;

                      • evaluate current policies for applying penalties for individuals who fail
                        to report essential eligibility information and remove barriers to their
                        use and effectiveness; and

                      • reexamine its policies for waiving recovery of SSI overpayments.



Long-Standing         SSA’s disability programs have been growing and are poised to grow even
                      more rapidly as more baby boomers reach their disability-prone years. Yet
Challenges in SSA’s   the statutory and regulatory design of these programs remain mired in
Disability Programs   concepts from the past and are poorly positioned to provide meaningful
                      and timely support for Americans with disabilities. These outdated
Warrant High-Risk     concepts persist despite scientific advances and economic and social
Designation           changes that have redefined the relationship between impairments and the
                      ability to work. In addition, while SSA has taken some steps in trying to
                      return beneficiaries to work, it has not developed, as we have
                      recommended, a comprehensive return-to-work strategy that focuses on
                      identifying and enhancing beneficiaries’ work capacities. Finally, as the
                      programs have grown, SSA has struggled to provide timely and consistent
                      disability decisions to program applicants. SSA’s new Commissioner has
                      made some progress addressing some of these problems and the agency
                      has implemented some short-term remedies while it is developing longer-
                      range plans to solve these problems. However, much more work needs to
                      be done. Ultimately, developing solutions to the problems facing these
                      disability programs will require consultation and cooperation between the
                      executive and legislative branches as well as cross-agency efforts, and will
                      likely require statutory as well as regulatory action. Our designation of
                      SSA’s disability programs as high risk can serve as a catalyst to bring
                      together the partners needed to resolve these long-standing problems. As
                      we have previously stated, as the primary manager of multibillion dollar
                      programs and as the entity with fiduciary responsibility for the trust funds,
                      SSA must take the lead in forging the partnerships and cooperation that
                      will be needed in reorienting the federal disability programs.5



                      5
                        U.S. General Accounting Office, SSA Disability: Return-to-Work Strategies From Other
                      Systems May Improve Federal Programs, GAO/HEHS-96-133 (Washington, D.C.: July 11,
                      1996).




                      Page 7                                                       GAO-03-117 SSA Challenges
                              Major Performance and Accountability
                              Challenges




Reexamination of Disability   To modernize the disability programs, SSA needs to reexamine the criteria
Criteria Needed to            it uses to determine whether individuals are disabled. The criteria include
                              medical as well as vocational factors. Over time, medical and technological
Acknowledge Changes in        advances have provided a better understanding of how medical conditions
Medicine as Well as the       affect the ability to work. Likewise, changes in the labor market have
Economy and Labor Market      affected the skills needed to perform work and the settings in which work
                              occurs. However, SSA has not fully updated its disability criteria to
                              determine who is unable to work to reflect these changes. Using outdated
                              information raises questions about the validity of its disability decisions,
                              and SSA risks overcompensating some individuals while
                              undercompensating or denying compensation entirely to others.

                              About 12 years ago, SSA began reviewing relevant medical advances and
                              updating the criteria used to evaluate disability claims. These updates
                              include adding or dropping conditions that qualify one for benefits,
                              modifying the criteria needed to establish the presence and severity of
                              certain medical conditions, and wording changes for clarification and
                              guidance in decision making. SSA’s efforts to update the criteria were
                              curtailed in the mid-1990s due to staff shortages, competing priorities, and
                              lack of adequate research on disability issues. The updates resumed in
                              1998, but progress has been slow and the lengthy time frames could
                              undermine the very purpose of an update. Keeping to a set schedule and
                              making necessary updates could help SSA minimize the use of outmoded
                              criteria in a large number of disability decisions.

                              In addition, because of the limited role of treatment in the statutory and
                              regulatory design of the programs, the updates have not fully captured the
                              benefits afforded by advances in treatment. SSA’s regulations require that
                              in order to receive benefits, claimants must follow treatment prescribed by
                              the individual’s physician, if the treatment can restore his or her ability to
                              work. The implication of this regulation is that if an individual is not
                              prescribed treatment, SSA does not consider the possible effects of
                              treatment in the disability decision, even if the treatment could make the
                              difference between being able and not being able to work. Moreover, the
                              disability programs do not require individuals to receive nonprescribed
                              treatment before or during the time they are assessed for eligibility. Thus,
                              treatments that can help restore functioning to persons with certain
                              impairments may not be factored into the disability decision for some
                              applicants. For example, the effects that medication to control severe
                              mental illness may have on an applicant’s ability to work are not
                              automatically factored into SSA’s disability decision making. Likewise,
                              efforts to update the programs’ criteria have not incorporated innovations


                              Page 8                                                GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




in assistive technologies—such as advanced prosthetics and wheelchairs—
because of similar program design issues.

Further, SSA’s disability criteria have not incorporated labor market
changes. For applicants who do not have impairments that SSA presumes
are severe enough ordinarily to prevent work, SSA evaluates whether they
are able to work despite their limitations. Individuals who are unable to
perform their previous work and other work in the national economy are
awarded benefits. SSA uses an outdated database—last updated in 1991—
for information on the types and demands of occupations in the national
economy in determining the impact that impairments have on individuals’
earning capacity. The agency is working on identifying a replacement
database, but this could take years to complete.

While SSA has not fully updated its disability criteria, it has started a
number of studies that recognize that medical advances and social changes
require the disability program to evolve. SSA has funded a project through
its Disability Research Institute (DRI)6 to design a study assessing the
validity of its medical criteria as measures of disability and has begun work
to design a study to identify the most salient job demands compared to a
claimant’s remaining capacity for work. In addition, SSA has funded a study
through the DRI to examine the impact and cost of assistive technology on
employment of persons with spinal cord injuries.

Updating disability criteria within existing program structures is prudent,
not only as a means to best ensure program integrity, but also for SSA to
meet its fiduciary responsibilities for public funds. To fully incorporate
scientific advances and labor market changes into the disability programs
would require more fundamental change, such as revisiting the programs’
basic orientation. Reorienting programs in this direction would align them
with broader social changes that focus on building and supporting the work
capacities of people with disabilities. Such a reorientation would require
examining complex program design issues such as beneficiaries’ access to
medical care and assistive technologies, the benefits offered and their
associated costs, mechanisms to return beneficiaries to work, as well as
the integration of SSA’s programs with other programs and policies
affecting people with disabilities. Success in implementing fundamental


6
  SSA awarded a 5-year cooperative agreement in 2000 to the University of Illinois at Urbana-
Champaign to participate in its Disability Research Institute to plan and conduct a broad
range of research that will develop disability policy information.




Page 9                                                          GAO-03-117 SSA Challenges
                            Major Performance and Accountability
                            Challenges




                            change to the orientation of the disability programs will be dependent upon
                            consultation and cooperation between the executive and legislative
                            branches as well as cross-agency efforts, and will likely require statutory as
                            well as regulatory action.



SSA Lacks a Comprehensive   The number of working-age beneficiaries of the DI and SSI programs has
Strategy to Return People   increased by 61 percent over the past 10 years, even as changes in
                            medicine, technology, society, and the nature of work have increased the
with Disabilities to Work
                            potential for some people with disabilities to return to, or remain in, the
                            labor force. Legislative changes have also focused on returning disability
                            beneficiaries to work. The Americans with Disabilities Act of 1990 supports
                            the premise that people with disabilities can work and have the right to
                            work, and the Ticket to Work and Work Incentives Improvement Act of
                            1999 increased beneficiaries’ access to vocational services. Indeed, many
                            beneficiaries with disabilities indicate that they want to work, and many
                            may be able to work in today’s labor market if they receive needed support.
                            In 1996, we recommended that SSA place a greater priority on helping
                            disabled beneficiaries work,7 and the agency has taken a number of actions
                            to improve its return-to-work practices. But even with these actions, SSA
                            has achieved poor results in this arena and few DI and SSI beneficiaries
                            leave the disability rolls to work.

                            Even in light of the Ticket to Work Act, SSA will continue to face difficulties
                            in returning beneficiaries to work, in part, owing to weaknesses, both
                            statutory and policy, in the design of the disability programs. As we have
                            reported in the past, these weaknesses include an either−or disability
                            decision-making process that characterizes individuals as either unable to
                            work or having the capacity to work and therefore ineligible for benefits.8
                            This either−or process produces a strong incentive for applicants to
                            establish their inability to work to qualify for benefits.

                            Moreover, return-to-work services are offered only after a lengthy
                            determination process. Because applicants are either unemployed or only
                            marginally connected to the labor force when they apply and remain so
                            during the eligibility determination process, their skills, work habits, and


                            7
                              U.S. General Accounting Office, SSA Disability: Program Redesign Necessary to
                            Encourage Return to Work, GAO/HEHS-96-62 (Washington, D.C.: Apr. 24, 1996).
                            8
                                GAO/HEHS-96-62.




                            Page 10                                                      GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




motivation to work are likely to deteriorate during this wait. Thus,
individuals who have successfully established their disability may have
little reason or desire to attempt rehabilitation and work. Unlike some
private sector disability insurers and foreign social insurance systems, SSA
does not incorporate into its initial or continuing eligibility assessment
process an evaluation of what is needed for an individual to return to work.
Instead of receiving assistance to stay in the workforce or return to work—
and thus to stay off the long-term disability rolls—an individual can obtain
assistance through DI or SSI only by proving his or her inability to work.
And even in its efforts to redesign the decision-making process, SSA has yet
to incorporate into these initiatives an evaluation of what an individual may
need to return to work.

In addition, SSA has made limited progress in developing baseline data to
measure progress in the return-to-work area. In June 2000, we reported that
many of SSA’s fiscal year 2001 performance measures were not sufficiently
results-oriented, making it difficult to track progress.9 SSA’s fiscal year 2002
performance plan showed that it had begun to incorporate more outcome-
oriented performance indicators that could support its efforts in this area.
Two new indicators, in particular, could help SSA gauge progress: (1) the
percentage increase in the number of DI beneficiaries whose benefits are
suspended or terminated owing to employment and (2) the percentage
increase in the number of disabled SSI beneficiaries no longer receiving
cash benefits. However, SSA did not set specific performance targets for
these measures, but instead established interim indicators to measure the
start of work activity. In its 2003 performance plan, SSA has refined these
interim indicators to more closely track outcomes related to employment,
but it has postponed implementing the permanent indicators from 2005
until 2007 while it develops new computer systems to collect data to
measure these indicators.

SSA has nevertheless recently stepped up its return-to-work efforts, in part,
in response to mandates from the Ticket to Work legislation. For example,
it has (1) established an Office of Employment Support Programs to
promote the employment of beneficiaries with disabilities; (2) recruited
more than 400 public or private entities to provide vocational
rehabilitation, employment, and other support services to beneficiaries


9
  U.S. General Accounting Office, Observations on the Social Security Administration’s
Fiscal Year 1999 Performance Report and Fiscal Year 2001 Performance Plan,
GAO/HEHS-00-126R (Washington, D.C.: June 30, 2000).




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under the Ticket to Work Program; (3) raised and indexed to a measure of
wage growth the limit on the amount a DI beneficiary can earn from work
and still receive benefits to encourage people with disabilities to work;
(4) funded 12 state partnership agreements that are intended to help the
states develop services to increase beneficiary employment; (5) provided
funding to more than 100 community-based organizations to help provide
work incentives planning and assistance to beneficiaries; and
(6) completed a pilot study on the deployment of work incentive specialists
to SSA field offices and is currently determining how to best implement the
position nationally.

Further, SSA has progressed in researching issues related to return-to-work
through its DRI. Current research underway includes: (1) designing a
demonstration to provide earlier return-to-work services to DI applicants
who are likely to be found eligible; (2) exploring the paths DI applicants
and beneficiaries took to the benefit program to determine whether SSA
might be able to redirect some applicants to work rather than a prolonged
stay on the benefit rolls; (3) examining how the onset of disability early in
life affects later employment outcomes; and (4) analyzing and facilitating
the transition to employment of youths with disabilities.

While these efforts represent positive steps in trying to return people with
disabilities to work, much remains to be done. As we have recommended
previously, SSA still needs to move forward in developing a comprehensive
return-to-work strategy that integrates, as appropriate, earlier intervention,
including earlier and more effective identification of work capacities and
the expansion of such capacities by providing essential return-to-work
assistance for applicants and beneficiaries.10 Adopting such a strategy is
likely to require improvements to staff skill levels and areas of expertise, as
well as changes to the disability determination process. It will also require
fundamental changes to the underlying philosophy and direction of the DI
and SSI programs, as well as legislative changes in some cases.
Policymakers will need to carefully weigh the implications of such
changes. Nevertheless, we remain concerned that the absence of such a
strategy and accompanying performance plan goals may hinder SSA’s
efforts to make significant strides in the return-to-work area, including its
efforts to improve the disability determination process. An improved
return-to-work strategy could benefit both the beneficiaries who want to
work and the American taxpayer.


10
     GAO/HEHS-96-133.




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Results of Efforts to      SSA’s disability determination process is time-consuming, complex, and
Improve the Disability     expensive. The agency has been working for years to improve this process,
                           yet, ensuring the quality and timeliness of its disability decisions remains
Claims Process Have Been   one of SSA’s greatest challenges. Individuals who are initially denied
Disappointing              benefits by SSA and appeal their claims may wait a year or more for a final
                           decision on their eligibility. These long waits result, in part, from complex
                           and fragmented decision-making processes that are laden with many layers
                           of reviews and multiple handoffs from one person to another. The cost of
                           administering the DI and SSI programs reflects the demanding nature of the
                           process. Although SSI and DI program benefits account for less than
                           20 percent of the total benefit payments made by SSA, they consume nearly
                           55 percent of the annual administrative resources.

                           In addition to its difficulties in processing claims, SSA has also had
                           difficulty ensuring that decisions regarding a claimant’s eligibility for
                           disability benefits are accurate and consistent across all levels of the
                           decision-making process. Our work shows that in fiscal year 2000, about
                           40 percent of the applicants whose cases were denied at the initial level
                           appealed this decision and about two-thirds of those who appealed were
                           awarded benefits.11 This happens in part because decision makers at the
                           initial level use a different approach to evaluate claims and make decisions
                           than those at the appellate level. The inconsistency of decisions at these
                           two levels has raised questions about the fairness, integrity, and cost of
                           SSA’s disability programs.




                           11
                             U.S. General Accounting Office, Social Security Disability: Efforts to Improve Claims
                           Process Have Fallen Short and Further Action is Needed, GAO-02-826T (Washington, D.C.:
                           June 11, 2002).




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In 1994, SSA laid out a plan to address these problems; however, that plan
and three subsequent revisions have yielded only limited success. Among
other things, SSA planned to develop a streamlined decision-making and
appeal process, more consistent guidance and training for decision makers
at all levels of the process, and an improved process for reviewing the
quality of eligibility decisions. Our reviews of SSA’s efforts found that the
agency had accomplished little.12 In some cases, the plans were too large
and too complex to keep on track, and the results of many of the initiatives
that were tested fell far short of expectations. Moreover, the agency was
not able to garner consistent stakeholder support and cooperation for its
proposed changes. Despite the overall disappointing progress, the agency
did issue formal guidance in a number of areas intended to improve the
consistency of decisions between the initial and appellate levels.

Overall, however, significant problems persist and difficult decisions
remain. For example, SSA is currently collecting data on the results from
an initiative known as the Prototype, which was implemented in 10 states
in October 1999 to test several modifications to the disability determination
process. Although interim data indicated that the Prototype would result in
more awards made correctly at the initial level, it also would increase the
number of appeals of denied claims. This, in turn, would result in both
higher administrative and benefit costs and lengthen the wait for final
decisions on claims. As a result, SSA modified the Prototype initiative and
is collecting more data on results. It remains to be seen whether these
revisions will retain the positive results from the Prototype while also
controlling administrative and program costs.




12
  U.S. General Accounting Office, SSA Disability Redesign: Focus Needed on Initiatives
Most Crucial to Reducing Costs and Time, GAO/HEHS-97-20 (Washington, D.C.: Dec. 20,
1996); SSA Disability Redesign: Actions Needed to Enhance Future Progress, GAO/HEHS-
99-25 (Washington, D.C.: Mar. 12, 1999); and Social Security Disability: Disappointing
Results From SSA’s Efforts to Improve the Disability Claims Process Warrant Immediate
Attention, GAO-02-322 (Washington, D.C.: Feb. 27, 2002).




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Even more pressing in the near term is the management and workload
crisis that SSA faces in its hearings offices. The agency’s 1999 plan included
an initiative to overhaul operations at its hearing offices to increase
efficiency and significantly reduce processing times at that level; however,
this nationwide effort has not only failed to achieve its goals, it has, in some
cases, made things worse. The initiative has suffered, in part, from
problems associated with implementing large-scale changes too quickly
without resolving known problems. As a result, the average case
processing time slowed and backlogs of cases waiting to be processed
approached crisis levels. We have recommended that the Commissioner act
quickly to implement short-term strategies to reduce the backlog and
develop a long-range strategy for a more permanent solution to the backlog
and efficiency problems at the Office of Hearings and Appeals.13 According
to SSA officials, they have implemented several short-term initiatives not
requiring statutory or regulatory changes to reduce hearing office
processing times and backlogs. These include new formats and software to
facilitate the issuance of favorable decisions, guidelines for the issuance of
favorable bench decisions, and awarding contracts to speed the assembly
of hearing files.

Finally, SSA’s 1994 plan to redesign the claims process called for the agency
to revamp its existing quality assurance system. However, because of
disagreement among SSA and state employee groups, unions, and interest
groups on how to accomplish this difficult objective, progress in this area
has been limited. We agreed with a March 2001 contractor assessment that
a significant overhaul was needed to encompass a more comprehensive
view of quality management and recommended that SSA develop an action
plan for implementing a more comprehensive and sophisticated quality
assurance program.14 Since then, the new Commissioner has signaled the
high priority she attaches to this effort by appointing a senior manager for
quality who reports directly to her. The senior manager and her team have
devised a 4-phase strategy to establish a quality oriented approach to all
SSA processes. As part of the first phase, the team has developed an
agency level definition of quality that incorporates the elements of
accuracy, timeliness, productivity, cost, and customer service.




13
     GAO-02-322.
14
     GAO-02-322.




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The limited results of some of these initiatives can be linked, in part, to
slow progress in incorporating technological improvements into the
disability determination process. As originally envisioned, SSA’s redesign
plan depended on these improvements. After spending about 7 years
designing and developing a new computer software application to
automate the disability claims process, SSA decided to discontinue the
initiative in July 1999, citing software performance problems and delays in
developing the software.

In August 2000, SSA issued a new management plan to develop the agency’s
electronic disability system. SSA expects this effort to move the agency
toward a paperless disability claims process. The strategy consists of
several key components, including (1) an electronic claims intake process
for the field offices, (2) enhanced state disability determination service
agencies’ claims processing systems, and (3) technology processes
necessary to support the operation of Office of Hearing and Appeals. The
components are to be linked to one another through the use of an
electronic folder that is being designed to transmit data from one
processing location to another and to serve as a data repository, storing
documents that are keyed in, scanned, or faxed. SSA is currently
implementing the automated intake process in its field offices. In addition,
it recently expanded the capabilities of its Internet application process to
include collecting information about the medical treatment and work
history needed to process disability claims. Further, SSA has stepped up its
schedule for implementing the electronic disability system from late in
2005 to January 2004. As SSA proceeds with this new system, it is
imperative that the agency effectively identify, track, and manage the costs,
benefits, schedule, and risks associated with the system’s full development
and implementation. Moreover, SSA must ensure that it has the right mix of
skills and capabilities to support this initiative and that desired end results
are achieved.




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                      SSA is at a crossroads in its efforts to redesign and improve its disability
                      claims process. Since its start in 1994, SSA’s redesign initiatives have
                      yielded limited progress and often disappointing results. SSA’s new
                      Commissioner has acknowledged the limited progress to date, has made
                      the issue one of the agency’s priorities, and has taken the first steps to
                      address this problem. However, as we testified in May 2002, it may be
                      appropriate, given the agency’s past experience, for SSA to undertake a
                      new and comprehensive analysis of the fundamental issues impeding
                      progress.15 Such an analysis should include reassessing the root causes
                      contributing to its problems and would encompass concerns raised by the
                      Social Security Advisory Board,16 such as the fragmentation and structural
                      problems in the agency’s disability determination process. The outcome of
                      this analysis may, in some cases, require legislative changes.



SSA Needs to Better   Among federal agencies, SSA has long been viewed as one of the leaders in
                      service delivery. SSA considers service delivery as one of its top priorities,
Position Itself for   and its current performance plan includes specific goals and strategies to
Future Service        provide accurate, timely, and useful service to the public. However, three
                      factors–(1) the expected increase in demand for services as baby boomers
Delivery Challenges   retire, (2) the concurrent retirement of a large part of its own workforce,
                      and (3) changing customer expectations–could hamper SSA’s ability to
                      provide high-quality service over the next decade and beyond. In response
                      to these challenges, SSA has initiated several workforce activities based on
                      its analysis of future retirements and has begun to envision what its future
                      service delivery might be. In addition, it has begun to expand its electronic
                      service delivery capabilities to meet changing customer expectations.
                      However, without a service delivery plan that lays out a detailed blueprint
                      for how service will be delivered in the future, SSA cannot ensure that it
                      will effectively cope with its future service challenges. Further, as the
                      agency transitions to electronic processes, it will be challenged to think
                      strategically about its information technology (IT) investments and to
                      ensure their effectiveness by linking them to service delivery goals and
                      performance.

                      15
                        U.S. General Accounting Office, Social Security Administration: Agency Must Position
                      Itself Now to Meet Profound Challenges, GAO-02-289T (Washington, D.C.: May 2, 2002).
                      16
                        The Social Security Independence and Program Improvements Act of 1994 (P.L. 103-296)
                      created a seven member bipartisan Advisory Board to advise the President, the Congress,
                      and the Commissioner of Social Security on matters relating to the Social Security and SSI
                      programs.




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SSA Needs to Develop a      Demand for services will grow rapidly as the baby boom generation ages
Concrete Service Delivery   and enters the disability prone years and retirement soon after. By 2010,
                            SSA expects worker applications for DI to increase by as much as
Plan                        32 percent over 2000 levels. As we have observed earlier in this report, SSA
                            already has trouble managing its disability determination workload; adding
                            additional cases without rectifying serious case processing issues will only
                            make things worse. Furthermore, by 2010, SSA projects that applications
                            for retirement benefits will also increase dramaticallyby 31 percent over
                            the 2000 levels.

                            SSA’s ability to provide high-quality service delivery is also potentially
                            weakened by challenges regarding its workforce. First, SSA’s workforce is
                            aging, and SSA is predicting a retirement wave that will peak in the years
                            2007 through 2010, when it expects about 2,500 employees to retire each
                            year. By 2010, SSA projects that about 37 percent of its almost 62,000
                            employees will retire. The percentage is higher for employees in SSA’s
                            supervisory or managerial ranks. In particular, more than 70 percent of
                            SSA’s upper-level managers and executives (GS-14, GS-15, and SES level)
                            are expected to retire by 2010. Second, SSA will need to increase staff skills
                            to deal with changing customer expectations and needs. SSA’s staff will
                            need to obtain and continually update the skills needed to use the most
                            current technology available to serve the public in a more convenient, cost
                            effective, and secure manner. At the same time, some aspects of SSA’s
                            customer service workload will likely become more time consuming and
                            labor intensive, owing primarily to the growing proportion of SSA’s non-
                            English speaking customers and the rising number of disability cases
                            involving mental impairments. Both situations result in more complex
                            cases that require diverse staff skills.




                            Page 18                                               GAO-03-117 SSA Challenges
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SSA has a number of workforce initiatives under way to help it prepare for
the future. For example, as required by law, SSA developed a workforce
transition plan to lay out actions to help ensure that its workforce will be
able to handle future service delivery challenges. In addition, recognizing
that it will shortly be facing the prospect of increasing retirements, SSA
conducted a study that predicts staff retirements and attrition each year,
from 1999 to 2020, by major job position and agency component. SSA also
began to take steps to fill its expected leadership gap. We have long
stressed the importance of succession planning and formal programs to
develop and train managers at all levels of SSA. As early as 1993, we
recommended that SSA make succession planning a permanent aspect of
its workforce planning and evaluate the adequacy of its investments in
management training and development.17 SSA created three new leadership
development programs to help prepare selected staff to assume mid- and
top-level leadership positions at the agency. Overall, many of the efforts
being made today are consistent with principles of human capital
management, which is fundamental to the federal government’s ability to
serve the American people.

However, SSA is taking these human capital measures in the absence of a
concrete service delivery plan to help guide its investments. We also
recommended in 1993 that SSA complete such a service delivery plan to
ensure that its human capital and other key investments are put to the best
use.18 In 1998, the agency took a first step by beginning a multiyear project
to monitor and measure the needs, expectations, priorities, and satisfaction
of customer groups, major stakeholders, and its workforce. In 2000, SSA
completed a document that articulates how it envisions the agency
functioning in the future.19 For example, SSA anticipates offering services
in person, over the telephone, and via the Internet; according to this
document, its telephonic and electronic access services will be equipped
with sophisticated voice recognition and language translation features, and
work will be accomplished through a paperless process. In its service
vision document, SSA also states that it will rely heavily on a workforce


17
  U.S. General Accounting Office, Social Security: Sustained Effort Needed to Improve
Management and Prepare for the Future, GAO/HRD-94-22 (Washington, D.C.: Oct. 27,
1993).
18
     GAO/HRD-94-22. Also, see GAO/T-HEHS-98-113 and GAO/HEHS-96-196.
19
   This document was originally called “2010 Vision,” but was subsequently renamed “SSA’s
Service Vision.”




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                            with diverse and updated skills to accomplish its mission. Although this
                            new vision represents a positive step for the agency toward acknowledging
                            and preparing for future service delivery challenges, it is too broad and
                            general to be useful in making specific information technology and
                            workforce decisions. We have stressed that this document should be
                            followed by a more detailed service delivery plan that spells out who will
                            provide what type of services in the future, where these services will be
                            made available, and the steps and timetables for accomplishing needed
                            changes. SSA needs this plan to ensure that its investments in its workforce
                            and technology are consistent with and fully support its future approach to
                            service delivery.



SSA Needs Effective         SSA has devoted considerable time and effort to identifying strategies to
Management of Information   meet its goal of providing world-class service. For example, SSA has begun
                            expanding its electronic service delivery capability—offering retirees the
Technology to Support
                            option of applying for benefits on-line as well as pursuing other on-line or
Future Service Delivery     Internet options to facilitate customer access to the agency’s information
                            and services. Yet SSA’s overall success in meeting its service delivery
                            challenge will depend on how effectively it manages its information
                            technology initiatives and links its investments in this area to its service
                            delivery goals and performance. Further, its actions and decisions must
                            effectively address dual modes of service delivery—its traditional services
                            via telephone, face-to-face, and mail contacts that are supported primarily
                            by its mainframe computer operations, as well as a more interactive, on-
                            line, Web based environment aimed at delivering more readily accessible
                            services in response to changing customer expectations.




                            Page 20                                              GAO-03-117 SSA Challenges
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Our evaluation of SSA’s information technology policies, procedures, and
practices in five key areas—investment management, enterprise
architecture, software development and acquisition, human capital, and
information security—found that the agency has many important
information technology management policies and procedures in place. For
instance, it has sound policies and procedures for software development
that were consistent with best practices. However, SSA has not
implemented its policies and procedures uniformly and has not established
several key policies and procedures essential to ensuring that its
information technology investments and human capital were effectively
managed. We have noted weaknesses in each of the five key areas and
recommended in this report 20 specific actions to improve SSA’s
information technology management practices.20 SSA has agreed with all
of the recommendations.

To illustrate, in making decisions on technology projects, SSA lacks key
criteria and regular oversight for ensuring consistent investment
management and decision-making practices. It also does not always
consider costs, benefits, schedules, and risks when making project
selections and as part of its ongoing management controls. Without such
information, SSA cannot be assured that its investment proposals will
provide the most cost-effective solutions and achieve measurable and
specific program-related benefits, such as high-quality service delivered on
time, within cost, and to the customer’s satisfaction. Further, given
competing priorities and funding needs, SSA will need such information to
make essential trade offs among its information technology investment
proposals and set priorities that can maximize the potential for both short-
and long-term improvements to services provided to the public.

As SSA pursues Internet and Web based applications to better serve its
customers, it must ensure that these efforts are aligned with the agency’s
information technology environment. A key element for achieving this is
the successful implementation of an enterprise architecture, a blueprint for
systematically and completely defining its current (baseline) and desired
(target) environment. It is essential for developing and implementing
information systems, and inserting emerging technologies that optimally
support the agency’s mission. We found that SSA has not completed key
elements of its enterprise architecture, including (1) finalizing its


20
 U.S. General Accounting Office, Information Technology Management: Social Security
Administration Practices Can Be Improved, GAO-01-961 (Washington, D.C.: Aug. 21, 2001).




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enterprise architecture framework, (2) updating and organizing its
architectures and architecture definitions under the framework, and
(3) reflecting its future service delivery vision and e-business goals.

As SSA moves forward in implementing electronic services and other
technologies, its architecture will be critical to defining, managing, and
enforcing adherence to the framework required to support its current and
future information processing needs. In surveying 116 agencies across the
federal government, we found the use of enterprise architectures by many
agencies to be a work in progress, with much left to be accomplished.21
Even within this group, SSA is at a relatively low level of maturity in
enterprise architecture management.

SSA plans to rely extensively on software-intensive systems to help achieve
processing efficiencies and improved customer service. SSA established
new policies and procedures to enhance the quality of its software
development. However, our evaluation found that SSA was not consistently
applying them to its software development projects. In particular, SSA had
not applied sound management and technical practices in developing the
electronic disability system.22 The use of sound, disciplined software
development processes is critical to ensuring that SSA delivers quality
software on schedule and within established cost estimates and can meet
its goal of developing a technological infrastructure to support its service
delivery vision.

As SSA places increased emphasis on using information technology to
support new ways of delivering service, it must also ensure that it
effectively manages its human capital to anticipate, plan for, and support its
requirements. However, SSA had not taken all of the necessary steps to
ensure the adequacy of its future information technology workforce. For
instance, although SSA had begun evaluating its short- and long-term
information technology needs, it had not linked its information technology
staffing needs to the competencies required to meet the agency’s mission
goals. Doing so is necessary to ensure that SSA’s plans project workforce


21
  U.S. General Accounting Office, Information Technology: Enterprise Architecture Use
Across the Federal Government Can Be Improved, GAO-02-6 (Washington, D.C.: Feb. 19,
2002).
22
  U.S. General Accounting Office, Social Security Administration: Update on Year 2000
and Other Key Information Technology Initiatives, GAO/T-AIMD-99-259 (Washington,
D.C.: July 29, 1999).




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needs far enough in advance to allow adequate time for staff recruitment
and hiring, skills refreshment and training, or outsourcing considerations.
Shortcomings in SSA’s information technology human capital management
could have serious ramifications as the agency moves toward making
larger investments in new electronic service delivery options, such as
Internet applications. Developing Internet applications represents a new
era for SSA—one in which the agency must ensure that it has enough of the
right people and skills to bring its electronic service delivery plan to
fruition.

As SSA proceeds with the development and implementation of Internet and
Web based initiatives, the need for a strong program to address threats to
the security and integrity of its operations will grow. Without proper
safeguards, these initiatives pose enormous risks that make it easier for
individuals and groups with malicious intentions to intrude into
inadequately protected systems and use such access to obtain sensitive
information, commit fraud, disrupt operations, or launch attacks against
other organizations’ sites.

SSA has made progress in addressing the information protection issues
raised in prior years. Specifically, during fiscal year 2002, the agency issued
final risk models to standardize platform security configurations,
established monitoring tools for enforcement of standards, improved
firewall controls, continued progress on a program to monitor and control
system user access requirements, strengthened physical security controls
in regional offices, and implemented procedures for enhanced review of
security violations on the mainframe.

Nonetheless, weaknesses in SSA’s information security program continue
to threaten its ability to effectively mitigate the risk of unauthorized access
to, and disclosure of, sensitive information. A recent audit by an
independent public accounting firm included recommendations that SSA
continue to conduct periodic risk assessments to identify inherent
vulnerabilities from emerging technologies, continue to implement risk
models to achieve compliance with SSA standard platform security
configuration settings, accelerate the program to ensure that sensitive
systems are adequately addressed, ensure use of the new procedures for
reviewing security violations on its mainframe, ensure that employees with
access to sensitive SSA data and equipment are properly assessed to
determine their eligibility for access, coordinate contingency planning
among SSA components, and continue to enhance the overall security




Page 23                                                GAO-03-117 SSA Challenges
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                       policy and improve physical security controls for the disability
                       determination services sites.



The Need to Protect    SSA is responsible for issuing SSNs, which are used to record wage data,
                       maintain earnings records, and efficiently administer its benefit programs.23
Personal Information   In addition, the SSN is also used by other government agencies as well as
Has Gained New         the private sector. This widespread use offers many benefits; however,
                       combined with an increase in reports of identity theft, such use has raised
Urgency                public concern over how SSNs and other personal information are being
                       used and protected. Moreover, the growth of the Internet, which can make
                       personal information contained in electronic records more readily
                       accessible to the general public, has heightened this concern. Finally, the
                       terrorist attacks of September 11, 2001, and the indication that some of the
                       terrorists fraudulently obtained SSNs have added new urgency to the need
                       to assess how SSNs are issued and protected and how Social Security data
                       are used in safeguarding national security.

                       Indeed, SSA has an important role to play in protecting the integrity of the
                       SSN. Given the widespread use of SSNs, the agency is considering steps to
                       ensure that it is taking all necessary precautions to prevent individuals who
                       are not entitled to SSNs from obtaining them. This may require SSA to find
                       a new balance between two competing goals: the need to take time to
                       verify documents submitted during the application process and the desire
                       to serve the applicant as quickly as possible.

                       Since the terrorist attacks, SSA has had to reexamine the process by which
                       it enumerates–gives SSNs and cards to individuals–to ensure that only
                       those with a legal right to SSNs receive them. Since November 2001 SSA
                       has been working with the Immigration and Naturalization Service and the
                       Department of State to improve the verification of documents needed to
                       assign SSNs to noncitizens and several initiatives are in the planning stages.
                       In addition, SSA now verifies with the issuer of the record the birth records
                       of all individuals over the age of 1 applying for original SSNs. Further, it no
                       longer assigns SSNs for the sole purpose of obtaining driver’s licenses to
                       individuals who are not authorized to work. The agency also provided
                       refresher training to staff involved in assigning SSNs and imposed
                       additional management reviews.

                       23
                         Since 1982, SSA has provided SSNs only to U.S. citizens, noncitizens authorized to work in
                       the United States, and noncitizens with an approved nonwork reason for needing a number.




                       Page 24                                                         GAO-03-117 SSA Challenges
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Once SSA has issued an SSN, however, it has little control over how the
number is used by other government agencies and the private sector. We
recently reported that SSNs are widely used across multiple agencies and
departments at all levels of government.24 They are used by agencies that
deliver benefits and services to the public as a convenient and efficient
means of managing records. More importantly, these agencies rely on SSNs
when they share data with one another, for example, to make sure that only
eligible individuals receive benefits and to collect any outstanding debt that
individuals owe the government. Although these agencies are taking steps
to safeguard the SSNs from improper disclosure, our work identified
potential weaknesses in the security of information systems at all levels of
government. In addition, SSNs are widely found in public records, that is,
documents that are routinely made available to the public. Although some
government agencies and courts are trying innovative approaches to
prevent the SSN from appearing on public records, not all agencies
maintaining public records have adopted these approaches. Moreover,
increasing numbers of departments are considering placing or planning to
place documents that may contain SSNs on the Internet, which would
make these numbers much more readily available to others, raising the risk
of their misuse.

We also found that SSNs are one of three personal identifiers most often
sought by identity thieves, and that SSNs are often used to generate
additional false documents, which can be used to set up false identities.
What is harder to determine is a clear answer as to where identity thieves
obtain the SSNs they misuse. Ultimately, the nation, with help from SSA,
must grapple with the need to find the proper balance between the
widespread and legitimate uses of personal information such as SSNs, by
both government and the private sector, and the need to protect individual
identity.

At the same time that SSA continues to protect SSNs and other personal
information in its records, law enforcement needs for information have
become ever more pressing. Law enforcement agencies at all levels of
government seek assistance from SSA in obtaining information crucial to
criminal investigations and, more recently, to protecting the homeland.
The challenge SSA faces today in protecting the SSN will increasingly


24
  U.S. General Accounting Office, Social Security Numbers: Government Benefits from
SSN Use but Could Provide Better Safeguards, GAO-02-352 (Washington, D.C.: May 31,
2002).




Page 25                                                     GAO-03-117 SSA Challenges
Major Performance and Accountability
Challenges




require a balance between providing information needed to protect against
terrorism and other violent crimes and protecting individual privacy and
preventing identity theft.




Page 26                                            GAO-03-117 SSA Challenges
GAO Contacts




               Subject(s) covered in this report            Contact person
               Future service delivery                      Barbara D. Bovbjerg, Director
                                                            Education, Workforce, and
               Protection and use of personal information   Income Security Issues
               such as social security numbers              (202) 512-7215
                                                            bovbjergb@gao.gov
               Integrity of the Supplemental Security       Robert E. Robertson, Director
               Income program                               Education, Workforce, and
                                                            Income Security Issues
               Disability programs                          (202) 512-7215
                                                            robertsonr@gao.gov
               Information technology to support service    Joel C. Willemssen, Managing Director
               delivery                                     Information Technology
                                                            (202) 512-6408
                                                            willemssenj@gao.gov




               Page 27                                                       GAO-03-117 SSA Challenges
Related GAO Products



Performance and                 Major Management Challenges and Program Risks: A Governmentwide
Accountability Series           Perspective. GAO-01-241. Washington, D.C.: January 2001.

                                Major Management Challenges and Program Risks: Social Security
                                Administration. GAO-01-261. Washington, D.C.: January 2001.

                                High-Risk Series: An Update. GAO-01-273. Washington, D.C.: January 2001.



Continue to Strengthen the      Supplemental Security Income: Progress Made in Detecting and
Integrity of the SSI Program    Recovering Overpayments, but Management Attention Should Continue.
                                GAO-02-849. Washington, D.C.: September 16, 2002.

                                Supplemental Security Income: Status of Efforts to Improve
                                Overpayment Detection and Recovery. GAO-02-962T. Washington, D.C.:
                                July 25, 2002.

                                Supplemental Security Income: Additional Actions Needed to Reduce
                                Program Vulnerability to Fraud and Abuse. GAO/HEHS-99-151.
                                Washington, D.C.: September 15, 1999.

                                Supplemental Security Income: Long-Standing Issues Require More
                                Active Management and Program Oversight. GAO/T-HEHS-99-51.
                                Washington, D.C.: February 3, 1999.

                                Supplemental Security Income: Action Needed on Long-Standing
                                Problems Affecting Program Integrity. GAO/HEHS-98-158. Washington,
                                D.C.: September 14, 1998.



Improve Programs That           SSA and VA Disability Programs: Re-Examination of Disability Criteria
Provide Support for             Needed to Help Ensure Program Integrity. GAO-02-597. Washington,
                                D.C.: August 9, 2002.
Individuals with Disabilities
                                Social Security Disability: Disappointing Results From SSA’s Efforts to
                                Improve the Disability Claims Process Warrant Immediate Attention.
                                GAO-02-322. Washington, D.C.: February 27, 2002.

                                SSA Disability: SGA Levels Appear to Affect the Work Behavior of
                                Relatively Few Beneficiaries, but More Data Needed. GAO-02-224.
                                Washington, D.C.: January 16, 2002.



                                Page 28                                           GAO-03-117 SSA Challenges
                          Related GAO Products




                          SSA Disability: Other Programs May Provide Lessons for Improving
                          Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.

                          Social Security Disability: SSA Has Had Mixed Success in Efforts to
                          Improve Caseload Management. GAO/T-HEHS-00-22. Washington, D.C.:
                          October 21, 1999.

                          SSA Disability Redesign: Actions Needed to Enhance Future Progress.
                          GAO/HEHS-99-25. Washington, D.C.: March 12, 1999.

                          Social Security Disability Insurance: Multiple Factors Affect
                          Beneficiaries’ Ability to Return to Work. GAO/HEHS-98-39. Washington,
                          D.C.: January 12, 1998.

                          Social Security: Disability Programs Lag in Promoting Return to Work.
                          GAO/HEHS-97-46. Washington, D.C.: March 17, 1997.

                          SSA Disability: SSA Return-to-Work Strategies From Other Systems May
                          Improve Federal Programs. GAO-HEHS-96-133. Washington, D.C.: July 11,
                          1996.

                          SSA Disability: Program Redesign Necessary to Encourage Return to
                          Work. GAO/HEHS-96-62. Washington, D.C.: April 24, 1996.



Better Position SSA for   Information Security: Additional Actions Needed to Fully Implement
Future Service Delivery   Reform Legislation. GAO-02-470T. Washington, D.C.: March 6, 2002.
Challenges, Including
                          Information Technology: Enterprise Architecture Use Across the Federal
Information Technology    Government Can Be Improved. GAO-02-6. Washington, D.C.: February 19,
                          2002.

                          Information Technology Management: Social Security Administration
                          Practices Can Be Improved. GAO-01-961. Washington, D.C.: August 21,
                          2001.

                          Information Security: Serious and Widespread Weaknesses Persist at
                          Federal Agencies. GAO/AIMD-00-295. Washington, D.C.: September 6,
                          2000.




                          Page 29                                           GAO-03-117 SSA Challenges
                           Related GAO Products




                           SSA Customer Service: Broad Service Delivery Plan Needed to Address
                           Future Challenges. GAO/T-HEHS/AIMD-00-75. Washington, D.C.: February
                           10, 2000.

                           Social Security Administration: Update on Year 2000 and Other Key
                           Information Technology Initiatives. GAO/T-AIMD-99-259. Washington,
                           D.C.: July 29, 1999.

                           Information Security: Serious Weaknesses Place Critical Federal
                           Operations and Assets at Risk. GAO/AIMD-98-92. Washington, D.C.:
                           September 23, 1998.



Strengthen Controls to     Social Security Numbers: Government Benefits from SSN Use but Could
Protect the Personal       Provide Better Safeguards. GAO-02-352. Washington, D.C.: May 31, 2002.
Information SSA Develops
                           Social Security Numbers: SSNs Are Widely Used by Government and
and Maintains              Could Be Better Protected. GAO-02-691T. Washington, D.C.: April 29, 2002.

                           Identity Theft: Prevalence and Cost Appear to be Growing. GAO-02-363.
                           Washington, D.C.: March 1, 2002.

                           Social Security: Government and Commercial Use of the Social Security
                           Number Is Widespread. GAO/HEHS-99-28. Washington, D.C.: February 16,
                           1999.




                           Page 30                                           GAO-03-117 SSA Challenges
Performance and Accountability and High-
Risk Series

              Major Management Challenges and Program Risks: A Governmentwide
              Perspective. GAO-03-95.

              Major Management Challenges and Program Risks: Department of
              Agriculture. GAO-03-96.

              Major Management Challenges and Program Risks: Department of
              Commerce. GAO-03-97.

              Major Management Challenges and Program Risks: Department of
              Defense. GAO-03-98.

              Major Management Challenges and Program Risks: Department of
              Education. GAO-03-99.

              Major Management Challenges and Program Risks: Department of
              Energy. GAO-03-100.

              Major Management Challenges and Program Risks: Department of
              Health and Human Services. GAO-03-101.

              Major Management Challenges and Program Risks: Department of
              Homeland Security. GAO-03-102.

              Major Management Challenges and Program Risks: Department of
              Housing and Urban Development. GAO-03-103.

              Major Management Challenges and Program Risks: Department of the
              Interior. GAO-03-104.

              Major Management Challenges and Program Risks: Department of
              Justice. GAO-03-105.

              Major Management Challenges and Program Risks: Department of
              Labor. GAO-03-106.

              Major Management Challenges and Program Risks: Department of State.
              GAO-03-107.

              Major Management Challenges and Program Risks: Department of
              Transportation. GAO-03-108.




              Page 31                                        GAO-03-117 SSA Challenges
Performance and Accountability and High-
Risk Series




Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of
Veterans Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental
Protection Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National
Aeronautics and Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.

High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the
Federal Government and the Nation’s Critical Infrastructures. GAO-03-
121.

High-Risk Series: Federal Real Property. GAO-03-122.




Page 32                                         GAO-03-117 SSA Challenges
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