oversight

Social Security Numbers: Improved SSN Verification and Exchange of States' Driver Records Would Enhance Identity Verification

Published by the Government Accountability Office on 2003-09-15.

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

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 2003
                 SOCIAL SECURITY
                 NUMBERS
                 Improved SSN
                 Verification and
                 Exchange of States’
                 Driver Records Would
                 Enhance Identity
                 Verification




GAO-03-920
                                                September 2003


                                                SOCIAL SECURITY NUMBERS

                                                Improved SSN Verification and Exchange
Highlights of GAO-03-920, a report to the       of States' Driver Records Would Enhance
Committee on the Judiciary and the
Subcommittee on Social Security,                Identity Verification
Committee on Ways and Means, House of
Representatives




Since September 11, 2001, more                  GAO found that 25 states have used either one or both of the methods SSA
attention has been focused on the               offers for requesting SSN verification. Over the last several years, states
importance of identifying people                used the batch and on-line method to submit over 84 million and 13 million
who use false identity information              requests, respectively. Although on-line use has been increasing, usage
or documents to obtain a driver                 varied significantly among states, with 5 out of 18 states submitting over 70
license. The Social Security
                                                percent of all requests. States decide to use SSA’s service based on various
Administration (SSA) offers states
a service to verify social security             factors, such as costs and state priorities.
numbers (SSNs) collected during
the driver licensing process. This              Weaknesses in SSA’s design and management of its SSN verification service
report examines states’ use of                  have contributed to capacity and performance problems and limited its
SSA’s verification service, factors             usefulness. While SSA recently increased systems capacity and reduced
that may affect the usefulness of               outages, problems remain. For example:
the service, and other tools states
use or need to verify identity.                 •   The level of service cannot be assessed because SSA has not established
                                                    key performance measures.
                                                •   States are concerned that the high verification failure rate adds to their
                                                    workloads. Several states noted that some of the failures could be
GAO recommends that SSA                             prevented if SSA disclosed more information to states.
develop performance measures to                 •   States using the batch method are vulnerable to licensing individuals
assess the quality of its service,                  using SSNs of deceased persons because SSA does not match requests
develop a strategy to decrease the                  against its death files. In fact, GAO obtained licenses using fraudulent
verification failure rate, and modify               documents and deceased persons’ SSNs in 2 states.
its batch method to match requests
against death records. SSA
disagreed on developing
                                                Driver licensing agencies rely primarily on visual inspection of documents
performance measures for this                   such as birth certificates, driver licenses, and U.S. immigration documents to
purpose but agreed it should                    verify applicants’ identity. While states may use safeguards beyond visual
develop a strategy for improving                inspection to verify documents, they lack the ability to systematically
the verification rate and begin                 exchange identity information on all drivers with other states. Without a
matching batch requests against                 means to readily share all driver records, states face a greater risk for
death records. However, SSA                     identity theft and fraud in the driver licensing process. A recent Department
stated that limits in law and                   of Transportation report to Congress identified options that would provide
systems priorities could restrict the           states a system for exchanging records on all drivers and could help mitigate
actions it could take.                          identity fraud.
Given the homeland security
implications associated with states’            Example of Identity Information That Driver License May Contain
inability to exchange information
on all drivers, GAO recommends                                                                                 EXPIRES

that the Congress, in partnership                                                          DRIVER'S LICENSE
with the states, consider
authorizing the development of a
                                                                               ?        CLASS ENDORS. IDENTIFICATION NO.
                                                                                         BIRTH DATE SP0000   ISSUE DATE
                                                                                        RESTR.HEIGHTWEIGHTSEX TYPEDONOR


national data sharing system.
                                                                          NAME
www.gao.gov/cgi-bin/getrpt?GAO-03-920.                                    ADDRESS
                                                                          ADDRESS

To view the full product, including the scope
and methodology, click on the link above.
                                                                         Source: GAO.
For more information, contact Barbara
Bovbjerg at (202) 512-7215 or
bovbjergb@gao.gov.
Contents


Letter                                                                                               1
                       Results in Brief                                                              2
                       Background                                                                    4
                       Twenty-five States Have Used SSA’s Verification Service                       7
                       Weaknesses in SSA’s Design and Management of the SSN
                         Verification Service Has Limited Its Usefulness                           11
                       States May Use Safeguards Beyond Visual Inspection of Identity
                         Documents, but Lack a Systematic Means to Share All Driver
                         Records                                                                   16
                       Conclusion                                                                  22
                       Matter for Congressional Consideration                                      23
                       Recommendations                                                             23
                       Agency Comments and Our Evaluation                                          24

Appendix I             Scope and Methodology                                                       27



Appendix II            Comments from the Social Security Administration                            29



Appendix III           GAO Contacts and Staff Acknowledgments                                      33
                       GAO Contacts                                                                33
                       Staff Acknowledgments                                                       33

Related GAO Products                                                                               34



Figures
                       Figure 1: States Using SSA’s Verification Services through March
                                2003                                                                 8
                       Figure 2: SSA’s On-line Transactions, Fiscal Years 1998-2002                  9
                       Figure 3: Distribution of On-line Verification Requests, Fiscal Years
                                1998-2002                                                          10




                       Page i                                     GAO-03-920 SSNs and Driver Licensing
Abbreviations

AAMVA             American Association of Motor Vehicle Administrators
CDLIS             Commercial Drivers Licensing Information System
DHS               Department of Homeland Security
DOT               Department of Transportation
NDR               National Driver Register
NHTSA             National Highway Traffic Safety Administration
SSA               Social Security Administration
SSN               social security number




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Page ii                                           GAO-03-920 SSNs and Driver Licensing
United States General Accounting Office
Washington, DC 20548




                                   September 15, 2003

                                   The Honorable F. James Sensenbrenner, Jr.
                                   Chairman
                                   Committee on the Judiciary
                                   House of Representatives

                                   The Honorable E. Clay Shaw, Jr.
                                   Chairman
                                   Subcommittee on Social Security
                                   Committee on Ways and Means
                                   House of Representatives

                                   The events of September 11, 2001, focused attention on the importance of
                                   identifying people who use false identity information or documents,
                                   particularly in the driver licensing process. Driver licenses are a widely
                                   accepted form of identification that individuals frequently use to obtain
                                   services or benefits from federal and state agencies, open a bank account,
                                   request credit, board an airplane, and carry on other important activities of
                                   daily living. For this reason, driver licensing agencies are points at which
                                   individuals may attempt to fraudulently obtain a license using a false
                                   name, social security number (SSN), or other documents such as birth
                                   certificates to secure this key credential. Accordingly, states face
                                   increasing pressure to verify the identity information of individuals to
                                   whom they issue licenses.

                                   As the agency responsible for issuing SSNs, the Social Security
                                   Administration (SSA) is uniquely positioned to help states verify the
                                   identity information provided by applicants. To this end, SSA has a
                                   verification service in place that allows state driver licensing agencies to
                                   verify the SSN, name, and date of birth of customers with SSA’s master file
                                   of SSN owners. States can transmit requests for SSN verification in two
                                   ways. One is by sending multiple requests together, called the “batch”
                                   method, to which SSA generally responds within 24 to 48 hours. The other
                                   way is to send an individual request on-line, to which SSA responds
                                   immediately.

                                   To shed light on states’ practices for verifying the identity information of
                                   driver license applicants, you asked us to examine: (1) the extent to which
                                   states use SSA’s services to verify the SSNs of driver license applicants,
                                   (2) factors that may affect the usefulness of SSA’s verification service, and


                                   Page 1                                     GAO-03-920 SSNs and Driver Licensing
                   (3) other tools states use or need to verify the identity of driver license
                   applicants. To conduct our work, we reviewed federal requirements
                   governing SSN use in the driver licensing process, SSA’s policies for
                   disclosing information to licensing agencies, information on the operation
                   of SSA’s verification service, and national data on states’ use of the
                   service. We interviewed key SSA headquarters managers and staff
                   responsible for the design and oversight of the verification service, as well
                   as American Association of Motor Vehicle Administrators (AAMVA)
                   officials responsible for co-managing the on-line verification method with
                   SSA.1 To develop in-depth information on specific states’ identity
                   verification practices, we obtained data and interviewed officials from
                   California, Florida, Georgia, Maine, Maryland, Massachusetts, Ohio,
                   Pennsylvania, and Tennessee. These states represent a range of identity
                   verification policies and practices. We also telephoned or visited the states
                   that did not use SSA’s service to obtain general information about their
                   identity verification policies and practices. Finally, we analyzed SSA and
                   state driver licensing agency data to identify instances of potential identity
                   fraud involving (1) individuals who used the name and SSN of deceased
                   persons and (2) individuals who used fraudulent out-of-state licenses. We
                   conducted our work from July 2002 through May 2003 in accordance with
                   generally accepted government auditing standards. For additional details
                   on our audit approach, see appendix I.


                   Twenty-five states have used the batch or on-line method to verify SSNs
Results in Brief   with SSA, and the extent to which they regularly use the service varies.
                   About three-fourths of the states that rely on SSA’s verification service
                   used the on-line method or a combination of the on-line and batch method,
                   while the remaining states used the batch method exclusively. Over the
                   last several years, states estimated submitting over 84 million SSN
                   verification requests to SSA using the batch method compared with
                   13 million requests submitted using the on-line method. States generally
                   use the batch method for a short-term period to verify SSNs in their
                   existing records, while states are more likely to use the on-line service on
                   a continuous basis. States’ use of SSA’s on-line service has increased
                   steadily over the last several years. However, the extent of use has varied
                   significantly, with 5 states submitting over 70 percent of all on-line
                   verification requests and one state submitting about one-third of the total.



                   1
                    AAMVA is an association that represents motor vehicle administrators in North America
                   and is a recognized leader in driver credentialing issues.




                   Page 2                                           GAO-03-920 SSNs and Driver Licensing
States consider various factors in deciding whether to use SSA’s
verification service. For example, some states that did not use SSA’s
service told us they were reluctant to do so based on performance
problems they had heard were encountered by other states, such as
frequent outages and slowness of the on-line system. States’ use of SSA’s
service is also driven by internal policies, priorities, and other concerns.
For example, some states may limit their use to certain targeted
populations, such as where fraud is suspected or for initial licenses, but
not for renewals of in-state licenses.

Weaknesses in SSA’s design and management of its SSN on-line
verification service have contributed to capacity and performance
problems. SSA recently took steps to increase system capacity and to give
more management attention to the service; however, problems remain. In
designing the service, SSA used an available infrastructure to set up the
system and encountered capacity problems, which worsened after the
pilot phase. AAMVA’s data show that, in 1999, the on-line system
experienced an average of three major outages per month, increasing to an
average of five per month in 2000. The capacity problems inherent in the
design of the on-line system have affected states’ use of SSA’s verification
service. For example, officials in one state told us that they have been
forced to scale back their use of the system because they were told by SSA
that their volume of transactions was overloading the system. SSA officials
acknowledged problems stemming from the design and management of
the on-line service and have made some necessary improvements. For
example, in April 2003, SSA completed an upgrade to increase capacity
and improve response times. SSA has also designated a project manager to
oversee the day-to-day management of the service. However, at the time of
our review, SSA still had not established key goals for the level of service
it will provide to driver licensing agencies. SSA has also not addressed
problems regarding the high nonmatch rate and some states’ continued
vulnerability to fraud associated with the use of SSNs of deceased
individuals by driver license applicants. These issues may affect states’
willingness to use the service and may also expose them to a higher risk of
fraud. Our own investigators were able to obtain licenses in two states
using a counterfeit out-of-state license and other fraudulent documents
and the SSNs of deceased persons.

While states may use safeguards beyond visual inspection to verify
documents, states lack the ability to systematically exchange identity
information on all drivers with other states. Driver licensing agencies rely
primarily on visual inspection of documents such as birth certificates,
driver licenses, and immigration documents to verify applicants’ identity.


Page 3                                     GAO-03-920 SSNs and Driver Licensing
             For example, driver licensing employees look for security features or
             other characteristics that indicate authenticity. States may employ more
             extensive measures to verify identity information. For example, states may
             use independent data sources to corroborate applicants’ identity
             information and computer systems to identify potential instances of
             identity fraud within their respective driver records and to prevent
             licensing when key identity information is questionable. Despite these
             extra measures, however, states remain vulnerable to identity fraud
             because they lack a systematic means to exchange information on all
             drivers. States’ current means to exchange driver information is limited to
             records for commercial drivers and individuals who have lost their driving
             privileges. Our analysis in one state showed that licensing agencies might
             unknowingly accept false out-of-state licenses as valid identity documents.
             However, a joint federal and AAMVA study recently identified options that
             if implemented would provide states an exchange system for all driver
             records and could help mitigate the vulnerabilities that exist across states.

             This report includes recommendations for SSA to improve the
             management of its SSN verification service to make it more useful to
             driver licensing agencies. SSA generally agreed with our findings regarding
             its SSN verification service and commented that recent improvements
             have increased states’ use of the service. SSA also noted that its service
             only confirms individuals’ SSN information and is not a means for
             verifying their identity. In response to our specific recommendations, SSA
             did not agree that it should develop measures for assessing the quality of
             its SSN on-line verification service because the agency did not believe that
             it would result in improved identity authentication. SSA agreed with our
             recommendations that it develop a strategy for improving the nonmatch
             rate and that it modify the batch process to include a match against its
             death records. However, the agency said that factors such as legal
             restrictions and limited systems resources could restrict the actions it can
             take. We are also presenting a matter for congressional consideration that
             the Congress, in partnership with the states, authorize the development of
             a national data sharing system for all driver records.


             Driver licenses have become widely accepted identity documents because
Background   they generally include features that make them difficult to counterfeit or
             alter and may contain identifying information such as the licensees’ legal
             name, photograph, physical description, and signature. Currently, about
             188 million drivers are licensed in the United States, and states issue an




             Page 4                                     GAO-03-920 SSNs and Driver Licensing
additional 73 million licenses and identification cards each year.2
Individuals can apply to obtain licenses at about 3,800 locations across the
United States.3

Authority for designing and administering driver licensing programs, as
well as for verifying the identity information of licensees, lies with
individual states. Accordingly, driver licensing agencies face the challenge
of determining whether the identity documents individuals provide (1) are
authentic and contain information that agrees with the issuing agency’s
records and (2) actually belong to the person presenting them. To promote
uniformity among driver licensing programs, AAMVA provides states with
guidance on documents it recommends as acceptable proof of identity, as
well as best practices for verifying the documents. Not surprisingly, the
SSN is key to any verification process because each SSN is unique to its
owner.4 In February 2002, we reported that 45 states collect SSN
information from driver license applicants. 5 Individuals obtain SSNs by
applying to SSA and providing evidence of their age, identity, and U.S.
citizenship or lawful alien status.6

As the agency responsible for assigning SSNs and issuing social security
cards, SSA provides a service to the states to verify those numbers. SSA
provides two methods for driver licensing agencies to verify SSNs: batch
and on-line. States use the batch method to submit an aggregate group of
SSN requests directly to SSA, and SSA generally responds within 24 to
48 hours. Those states using the on-line method submit individual SSN


2
 Identification cards are issued for the sole purpose of identifying the owner and generally
contain the same information as driver licenses but lack information authorizing the owner
to drive. Estimates of the number of licenses and identification cards issued annually were
taken from a 2002 survey conducted by the California Department of Motor Vehicles.
3
    Estimates of the number of licensing sites nationwide were provided by AAMVA.
4
 SSN verification primarily serves to corroborate the identity information submitted by
driver license applicants. If the identity document contains a photograph or biometric
information, licensing employees may visually inspect or electronically read these data as
well as use interviewing techniques to determine if the documents actually belong to the
individual presenting them.
5
 See U.S. General Accounting Office, Child Support Enforcement: Most States Collect
Drivers’ SSNs and Use Them to Enforce Child Support, GAO-02-239 (Washington, D.C.:
Feb. 15, 2002).
6
 All U.S. citizens can be assigned SSNs. SSA will also assign SSNs to noncitizens authorized
by the Department of Homeland Security to work in the United States and to noncitizens
legally in the country who have a valid nonwork reason.




Page 5                                              GAO-03-920 SSNs and Driver Licensing
requests and receive immediate “real time” responses from SSA. On-line
users transmit and receive information to and from SSA through a network
maintained by AAMVA. SSA charges states a fee to cover its costs
(basically system processing and personnel) for providing this service.
Batch users pay $0.0015 per transaction while on-line users are charged
$0.03 per transaction. For fiscal year 2002, the total billings for batch and
on-line users were about $39,000 and $193,000, respectively. SSA collects
payments directly from the batch users, while it bills and collects
payments from the on-line users through AAMVA.

SSA followed Privacy Act7 requirements in deciding what information it
would disclose to driver licensing agencies. Under its current disclosure
policy, if the SSN, name, and date of birth submitted to SSA by a driver
licensing agency match SSA’s records, SSA will verify the match to the
state driver licensing agency. If one or more elements do not match, SSA
will inform the agency of the nonmatch but will not disclose further
information. match only establishes that the information agrees with SSA’s
records and is not proof that the individual using the SSN is the person to
whom SSA assigned the number.

Beyond SSA’s verification service, the federal government plays a role in
several other key areas of states’ driver licensing programs. For example,
within the Department of Transportation (DOT), the National Highway
Traffic Safety Administration (NHTSA) operates the National Driver
Register (NDR), a national database containing identity information on
39 million problem drivers that states are required to use when making
licensing decisions.8 Also, to remove unsafe commercial drivers from the
highways, the federal government established the Commercial Drivers
License Information System (CDLIS), a nationwide database of 11 million
records that states must use to exchange information on applicants who
may hold commercial licenses in other states or have driving infractions


7
 The Privacy Act regulates federal agencies’ collection, use, and disclosure of individuals’
personal information and generally prohibits disclosure of such information without the
individuals’ consent. The act authorizes 12 exceptions under which an agency may disclose
information. One exception, “routine use,” allows an agency to disclose the information if
the agency deems the disclosure to be compatible with the purpose for which it collected
the information, and the agency gives public notice describing the information it plans to
disclose. SSA offers as many as 14 different verification services, each of which is designed
for various requesters (e.g., social service agencies, employers, etc.) and may make
different disclosures as a result of the verification.
8
 Problem drivers are individuals whose driving privileges have been suspended, revoked, or
canceled for cause or who have been convicted of certain traffic offenses.




Page 6                                              GAO-03-920 SSNs and Driver Licensing
                            that make them ineligible for licensing.9 DOT, the federal agency charged
                            with establishing the CDLIS database, contracts with AAMVA to operate it.
                            The federal government also provides grants to help states improve their
                            highway safety programs. Furthermore, states’ receipt of federal funds for
                            their state child support enforcement programs are contingent on the
                            collection of individuals’ SSNs during the driver licensing process. This
                            provision enables licensing agencies to assist states in locating and
                            obtaining child support payments from noncustodial parents.


                            Twenty-five states have used either the batch or on-line verification
Twenty-five States          method and the extent to which they regularly use the on-line service
Have Used SSA’s             varies.10 States that used the batch method generally use it for a short
                            period then switch to the on-line process exclusively. Although states’ use
Verification Service        of SSA’s on-line service has increased steadily over the last several years,
                            5 states submitted over 70 percent of all on-line verification requests.
                            Factors such as cost, system performance, and individual state priorities
                            play a role in determining whether states opt to use SSA’s verification
                            service and the frequency in which it is used.


Twenty-five States Have     As of March 2003, driver licensing agencies in 25 states have used the
Used the Batch or On-line   batch or on-line method to verify SSNs with SSA. States generally use the
Methods                     batch method for a short-term period, but states are more likely to use the
                            on-line service on a continuous basis. About three-fourths of the states
                            that rely on SSA’s verification service used the on-line method or a
                            combination of the on-line and batch method, while the remaining states
                            used the batch method exclusively. (See fig. 1.) Over the last several years,
                            states estimated submitting over 84 million requests to SSA using the
                            batch method.11 Similarly, states submitted a total of 13 million requests
                            using the on-line method. Two-thirds of these on-line requests were
                            submitted in the last 2 fiscal years.12




                            9
                             States issue commercial driver licenses to individuals involved in interstate, intrastate, or
                            foreign commerce to operate certain types of vehicles such as large trucks and buses.
                            10
                                 This report uses the word “states” to refer to the 50 states and the District of Columbia.
                            11
                             SSA did not provide the actual number of batch transactions. Batch estimates represent
                            data for 1999–2003.
                            12
                                 On-line verification requests represent data for fiscal years 1998-2002.




                            Page 7                                                  GAO-03-920 SSNs and Driver Licensing
Figure 1: States Using SSA’s Verification Services through March 2003




                  Washington

                                                                                                                                                       Maine
                                                 Montana             North
                                                                     Dakota         Minnesota
                 Oregon                                                                                                                                        Vermont
                                  Idaho                                                                                                                        New Hampshire
                                                                     South                     Wisconsin                                        New
                                                                     Dakota                                                                     York           Massachusetts
                                                  Wyoming                                                       Michigan                                       Rhode Island
                                                                                                                                                               Connecticut
                         Nevada                                                         Iowa                                       Pennsylvania
                                                                     Nebraska                                                                                  New Jersey
                                          Utah                                                                          Ohio                                   Delaware
                                                                                                     Illinois Indiana
                                                     Colorado                                                               West                               Maryland
                                                                                                                           Virginia
            California                                                     Kansas                                                        Virginia              Washington, D.C.
                                                                                          Missouri             Kentucky

                                                                                                            Tennessee           North Carolina
                                    Arizona         New                     Oklahoma     Arkansas                                 South
                                                   Mexico                                                                        Carolina
                                                                                                   Mississippi
                                                                                                                        Georgia
                                                                                                            Alabama

                                                                         Texas
                                                                                           Louisiana                           Florida
                             Alaska

                                                   Hawaii




                                                                           States using SSA's Online Verification Service only (14)
                                                                           States using SSA's Batch Verification Service only (7)
                                                                           States using both SSA's Online and Batch Verification Service (4)
                                                                           States not using SSA's Verification Service (26)


Source: Social Security Administration.



                                                                SSA officials told us that the batch method offers advantages in
                                                                circumstances where a real-time verification response is unnecessary. For
                                                                example, some states have used the batch method to “clean-up” SSNs in
                                                                their existing records and address any discrepancies prior to the license
                                                                coming due for renewal at a later date. A number of states that have used
                                                                the batch method in this manner subsequently used the on-line method



                                                                Page 8                                                              GAO-03-920 SSNs and Driver Licensing
                           exclusively. For example, one state that used the batch method in 2001 to
                           verify over 8.3 million existing records has since used the on-line method
                           exclusively. SSA officials noted that only one state currently uses the
                           batch method on a continuous basis to verify SSNs for all of its customers.

                           For states that issue permanent licenses on the spot, the on-line service
                           also offers an advantage, namely, the ability to instantly verify the SSN and
                           other key information submitted by individuals seeking initial licenses, as
                           well as those converting out-of-state licenses. Between fiscal years
                           1998 and 2002, the number of states participating in SSA’s on-line service
                           grew by about 3 states each year. As shown in figure 2, the volume of on-
                           line verification requests processed by SSA has also increased significantly
                           from 300,000 in fiscal year 1998 to 5.5 million in fiscal year 2002.

                           Figure 2: SSA’s On-line Transactions, Fiscal Years 1998-2002

                            Number of verification requests in millions
                            6



                            5



                            4



                            3



                            2



                            1



                            0
                            FY1998                      FY1999              FY2000                  FY2001             FY2002
                           (4 states)                  (7 states)         (11 states)             (15 states)        (18 states)
                           Source: GAO analysis of SSA data.




Extent of States’ Use of   Although the volume of on-line requests grew between 1998 and 2002,
the On-line Verification   usage varied significantly among states and within individual states from
Method Varied              year to year. As shown in figure 3, 5 states accounted for over 70 percent
                           of the total transactions over a 5-year period, and a single state was
                           responsible for submitting about one-third of the total transactions. In
                           addition, in some states, the use of the on-line service varied from year to




                           Page 9                                                       GAO-03-920 SSNs and Driver Licensing
                             year. For example, one state sent in about 250,000 requests in 1 year and
                             about half that number the following year.

                             Figure 3: Distribution of On-line Verification Requests, Fiscal Years 1998-2002

                                                                         13 states




                                                                                                    34.4%
                                       •                                                            Tennessee
                                      29%

                                                                                                    9.6%
                                                                 71% •   5 states                   Massachusetts
                                                                                                    9.1%
                                                                                                    Ohio
                                                                                                    9.1%
                                                                                                    Missouri
                                                                                                    8.6%
                                                                                                    Arizona
                             Source: GAO analysis of SSA data.




States Weigh                 Various factors—such as costs, performance problems, and state
Considerations in Deciding   priorities—may affect states’ decisions about whether or not to use SSA’s
to Use SSA’s Verification    verification service. The nonverifying states we contacted frequently cited
                             cost as a reason why they did not use SSA’s verification service. In
Service                      addition to the per-transaction fees that SSA charges, states may incur
                             additional costs to set up and use SSA’s service, including the cost for
                             computer programming, equipment, staffing, training, and so forth. State
                             estimates associated with establishing an on-line SSN verification process
                             with SSA varied considerably based on factors such as the system
                             modifications they planned to make. For example, one state we contacted
                             estimated that it would cost approximately $770,000 to implement the on-
                             line service. Another state estimated that using the on-line service would
                             have a start-up cost of about $230,000.

                             Many nonverifying states we contacted expressed a reluctance to use
                             SSA’s verification service based on performance problems they had heard
                             were encountered by other states. Some states cited concerns about
                             frequent outages and slowness of the on-line system. Other states
                             mentioned that the extra time to verify and resolve SSN problems could




                             Page 10                                        GAO-03-920 SSNs and Driver Licensing
                      increase customer waiting times because a driver license would not be
                      issued until verification was complete.

                      States’ decisions about whether to use SSA’s service, or the extent to
                      which to use it, are also driven by internal policies, priorities, and other
                      concerns. For example, some of the states we visited have policies
                      requiring their driving licensing agencies to verify all customers’ SSNs.
                      Officials in one of these states acknowledged that the growing prevalence
                      of identity theft and the events of September 11, 2001, directly affected
                      their decision to begin using SSA’s service. Conversely, another state we
                      visited that had submitted only 51 transactions over a 3-year period told us
                      that it was delaying full use of SSA’s service until spring 2003 to coincide
                      with the roll-out of its new driver-license issuance system. Finally, we
                      found that states may limit their use of the on-line method to certain
                      targeted populations. For example, one state reported that its policy was
                      to use the on-line method only if fraud was suspected, while another used
                      the service only for initial licenses and out-of-state conversions, but not
                      for renewals of in-state licenses.


                      Weaknesses in the design and management of SSA’s on-line verification
Weaknesses in SSA’s   service have contributed to capacity and performance problems and
Design and            ultimately limited its usefulness. SSA recently took steps to increase
                      systems capacity and to give more management attention to the service;
Management of the     however, problems remain. In designing the system, SSA used an available
SSN Verification      infrastructure and encountered capacity problems early on. Although the
                      problems worsened after the pilot phase, SSA did not monitor or modify
Service Has Limited   the system to improve its performance. Beyond system design problems,
Its Usefulness        SSA’s day-to-day management of the service has also been problematic.
                      This lack of management attention to the service is evidenced by the fact
                      that SSA has failed to bill and collect in a timely fashion more than
                      $370,000 from AAMVA over the last several years. SSA officials have taken
                      some steps to address system capacity problems, but the agency still lacks
                      key performance goals for the on-line service. Despite an increased focus
                      on daily management and oversight of the service, SSA still has not
                      addressed other problem areas such as a high nonmatch rate or states’
                      vulnerability to fraud associated with individuals who use the SSNs of
                      deceased individuals to obtain licenses. These issues may affect states’
                      willingness to use the service and expose them to a higher risk of fraud.




                      Page 11                                   GAO-03-920 SSNs and Driver Licensing
The Design and              Weaknesses in the design and management of SSA’s on-line system have
Management of the On-line   contributed to capacity and performance problems. In designing the
System Contributed to       system, SSA connected its server to AAMVA’s network, to which driver
                            licensing agencies across the country were linked.13 SSA connected the
Capacity and Performance    two systems using a low-speed data communication line. In 1997, SSA
Problems                    piloted the on-line service with three states participating. A joint SSA and
                            AAMVA evaluation of the pilot estimated that the on-line service could
                            verify 43,200 requests in a 12-hour period or 12.5 million per year. It was
                            also estimated that states would submit 7.7 million requests in 1998. While
                            the system experienced some problems during the pilot—such as slow
                            response times and outages—SSA expressed confidence that its system
                            would be sufficient to handle all requests. SSA acknowledged that only
                            limited capacity testing was done. However, SSA planned to monitor the
                            system’s performance as needed to ensure it could meet states’ needs.

                            Following the pilot phase, problems worsened as more states began using
                            SSA’s service. AAMVA’s data show that in 1999 the system experienced an
                            average of three major outages per month, increasing to an average of five
                            per month in 2000. More recent AAMVA data showed that from August
                            2002 through March 2003, outages continued to occur frequently and
                            lasted from about 30 minutes to as long as 1 day. Such outages can affect
                            customer service because employees in one state told us that when the
                            service is down, they cannot process customers’ transactions. However,
                            because SSA did not collect or monitor performance data on response
                            times and outages, SSA did not know the magnitude or specifics of the
                            problem.

                            The capacity problems inherent in the design of the on-line system have
                            affected states’ use of SSA’s verification service. Officials in one state told
                            us that they have been forced to scale back their use of the system
                            because they were told by SSA that the volume of transactions was
                            overloading the system. In addition, AAMVA representatives told us that
                            because of concerns about performance and reliability, they have not
                            allowed new states to use the service since the summer of 2002. At the
                            time of our review, 10 states had signed agreements with SSA and were
                            waiting to use the on-line system, and 17 states had received funds from




                            13
                              AAMVA’s network serves as the conduit for transmitting verification requests from
                            individual state driver licensing agencies to SSA, as well as receiving verification responses
                            from SSA and transmitting them to individual states.




                            Page 12                                              GAO-03-920 SSNs and Driver Licensing
DOT for the purpose of verifying SSNs with SSA.14 It is uncertain how
many of the 17 states will ultimately opt to use SSA’s on-line service.
However, even if they signed agreements with SSA today, they may not be
able to use the service until the backlog of waiting states is addressed.

In addition to design weaknesses, SSA did not sufficiently focus on the
management of its service. In particular, SSA previously lacked a
designated person to oversee the day-to-day operations of the service and
to coordinate with AAMVA on various management issues. As a result,
AAMVA lacked a focal point within SSA to resolve persistent performance
problems that arose with the system. AAMVA officials told us they would
start by calling SSA’s general help desk, as directed by SSA, but would end
up calling several different components within the agency. This situation
impeded the timely and effective resolution of problems necessary to meet
states’ verification needs. SSA’s lack of management attention to the
service is also evidenced by the fact that the agency failed to timely bill
and collect fees from AAMVA over the last several years. Each year SSA is
required to reach agreement with AAMVA on the per transaction cost of its
service. However, for several years SSA and AAMVA have not done this.
Under the agreement, SSA is also required to send AAMVA a final billing
each year based on the number of transactions processed. SSA billed and
collected payments from AAMVA for the first 2 fiscal years—1997 and
1998. However, between fiscal years 1999 and 2002, SSA failed to bill and
collect more than $370,000 it calculated as being due from AAMVA.

SSA and AAMVA officials have acknowledged problems stemming from
the design and management of the on-line service and have made some
necessary improvements. For example, according to SSA, in April 2003 the
service began using software that AAMVA recently revised to increase the
volume of transactions states could submit and receive through AAMVA’s
network. About the same time, SSA completed an upgrade of its data
communication line and server to enhance its system capacity and
response time. SSA officials told us these upgrades should reduce outages
and enhance performance. SSA provided us with information showing that
in May 2003, 2 states had increased their volume of transmissions and an
additional 3 states had begun using the service. SSA plans to add 4 new
states that are currently testing the on-line system. AAMVA estimates that



14
 Included in the 10 states that have signed agreements with SSA and the 17 that received
DOT funding are 6 batch states. Of the 25 states that received DOT funding, 17 were not
online users.




Page 13                                           GAO-03-920 SSNs and Driver Licensing
                          2003 verification requests may increase to 28 million, more than five times
                          the number received in 2002. Despite this projection, however, at the time
                          of our review, SSA still had not established key goals for the level of
                          service it will provide driver licensing agencies. SSA officials told us they
                          are currently monitoring the volume of transactions and response times as
                          new states are added. However, until SSA establishes key goals, the quality
                          and effectiveness of SSA’s on-line service cannot be fully assessed. More
                          recently, SSA also designated a project manager responsible for
                          overseeing the day-to-day operation of its service, as well as an individual
                          responsible for the billing and collection of AAMVA payments. At the time
                          of our review, SSA had collected $330,000 from AAMVA for fiscal years
                          1999-2002.15 SSA officials told us that they are in the process of updating
                          the cost estimates and payments for fiscal year 2003.


SSA Has Not Focused on    Despite SSA’s recent efforts to focus more management attention on its
Other Key Weaknesses in   verification service, problems regarding the high nonmatch rate and states’
the Service It Provides   continued vulnerability to fraud associated with the use of SSNs of
                          deceased individuals by driver license applicants remain. These problems
States                    pose a concern for states because of the additional workloads associated
                          with resolving discrepancies between SSA and states’ driver records as
                          well as the potential for identity theft. SSA’s data over the last 5 years
                          show that an average of 11 percent of all transactions submitted by states
                          failed to verify with SSA’s records. Some states have experienced
                          nonmatch rates as high as 30 percent. In fiscal year 2002, about
                          800,000 records failed verification. Generally, about one-half of these
                          failed because the name submitted with the SSN did not match the name
                          in SSA’s records. Such mismatches may occur, for example, if a person’s
                          SSN record lists a maiden name, but the person is applying for a license
                          under a married name. The states and AAMVA have voiced their concerns
                          to SSA about the need for additional disclosure of information. In a May
                          2001 letter to one state, SSA’s Acting Deputy Commissioner specified the
                          agency’s disclosure policy for driver licensing agencies and stated that
                          SSA closely scrutinizes requests involving SSN use for purposes not
                          related to the Social Security program. In doing so, SSA has decided to
                          provide its verification service in a limited manner by informing driver
                          licensing agencies which data elements match or do not match.




                          15
                               According to AAMVA, in May 2003 it paid SSA the remaining amount owed.




                          Page 14                                            GAO-03-920 SSNs and Driver Licensing
State concerns about the potential workloads associated with resolving
nonmatch issues may affect their willingness to fully use SSA’s service.
Officials in one state told us that a planned start up of the on-line service
may be delayed due to concerns about the high nonmatch rate they have
experienced using SSA’s batch service. Officials in another state indicated
that they have not done a batch clean up of their existing databases
because they are unable to devote the additional funding and staff
resources to address nonverification issues. SSA officials told us that they
are aware of states’ concerns and have recently begun discussions to
address disclosure issues with the states.

In reviewing SSA’s verification service, we also identified a key weakness
in the batch method that exposes states to a higher risk of fraud by
allowing them to inadvertently issue licenses to individuals using the SSNs
of deceased individuals. Unlike the on-line service, SSA does not match
batch requests against its death records. As a result, the batch method will
not identify and prevent the issuance of a license in cases where an SSN of
a deceased individual is being used. SSA officials told us that they initially
developed the batch method several years ago, and they did not design the
system to match SSNs against its death files. However, a death match was
built into the on-line system. At the time of our review, SSA acknowledged
that it had not explicitly informed states about the limitation of the batch
service.

Our own analysis of 1 month of SSN transactions submitted to SSA by one
state using the batch method identified at least 44 cases in which
individuals used the SSN, name, and date of birth of persons listed as
deceased in SSA’s records to obtain a license or an identification card.16
We forwarded this information to state investigators who quickly
confirmed that licenses or identification cards had been issued in 41 cases
and were continuing to investigate the others. To further assess states’
vulnerability in this area, our own investigators, working in an undercover
capacity, were able to obtain licenses in two batch states using a
counterfeit out-of-state license and other fraudulent documents and the
SSNs of deceased persons. In both states, driver licensing employees
accepted the documents we submitted as valid. Our investigators
completed the transactions in one state and left with the new valid




16
 SSA’s death records may contain inaccuracies because SSA records all reports of death
but only verifies those involving benefit payments.




Page 15                                          GAO-03-920 SSNs and Driver Licensing
                         license.17 In the second state, the new permanent license arrived by mail
                         within weeks. The ease in which they were able to obtain these licenses
                         confirmed states’ vulnerability to accepting fraudulent documents, and for
                         those states that use SSA’s batch process, to issuing licenses to individuals
                         using SSNs of deceased individuals. SSA officials have told us that the
                         agency has not made a decision about whether the current batch system
                         will be modified to include a death match.

                         Our field work shows that licensing officials in states that use or have used
                         the batch process were often unaware that SSA did not match SSNs
                         against its death records. As a result, these states lacked information that
                         they could have used to make more informed decisions in choosing either
                         the batch or on-line method or to seek alternative strategies to avoid
                         issuing licenses to individuals using SSNs of deceased persons. Moreover,
                         states that have used the batch method in prior years to clean up their
                         records and to verify the SSNs of millions of driver license holders, may
                         have also unwittingly left themselves open to identity theft and fraud.


                         States may use tools beyond visual inspection to verify documents, but
States May Use           lack the ability to systematically exchange identity information on all
Safeguards Beyond        drivers with other states. Although driver licensing agencies rely primarily
                         on visual inspection of documents to verify applicants’ identity
Visual Inspection of     information, states may employ more extensive measures such as using
Identity Documents,      independent sources to corroborate applicants’ identity information.
                         Despite the extra measures, states remain vulnerable to identity fraud
but Lack a Systematic    because they lack a systematic means to exchange information on all
Means to Share All       drivers. As a result, states may unknowingly accept false out-of-state
Driver Records           licenses as valid identity documents or license individuals who use the
                         identity information of others.


Visual Inspection of     In the states we visited, driver-licensing agencies rely primarily on visual
Documents Is a Primary   inspection to determine the authenticity of documents provided by
Practice for Verifying   applicants. As proof of identity, applicants must present one or more state-
                         approved documents that are generally inspected by staff. Applicants may
Identity                 present a variety of documents, such as a social security card, a U.S. birth



                         17
                           This state does not use SSA’s batch verification process for initial licenses, but only for
                         license renewals. Therefore, the use of the deceased person’s SSN will not be caught when
                         the state ultimately verifies it using the batch method.




                         Page 16                                             GAO-03-920 SSNs and Driver Licensing
certificate, a driver license from another state, or passport. For noncitizen
applicants, staff also review a myriad of passports and U.S. immigration
documents. In reviewing identity documents, staff look for security
features such as watermarks and raised seals that are difficult to
counterfeit and are designed to reveal evidence of tampering. They also
inspect documents for other indications of authenticity such as signs of
appropriate aging. If employees are unsure if a particular document is
authentic or if it actually belongs to the applicant, they may use
interviewing techniques to ensure that the individual can corroborate key
information.

In the states we visited, staff responsible for processing driver license
applications generally received some training and basic assistance to
support the visual inspection. For example, all of the states provided
training to help employees distinguish between authentic and fraudulent
documents. This generally occurred once or twice a year and was
sometimes presented as part of a larger training module covering other
policies and procedures of the agencies. In addition to training, office
managers and supervisors with more experience in detecting false
documents were available on site to help with the visual inspection if
needed. In several states, supervisors and office managers told us that they
have directly contacted issuing agencies to determine whether documents,
such as birth certificates, were valid. However, this was not routinely done
because it can be a time-consuming and labor-intensive process. Nearly
every state we visited provided staff with some basic tools to help with the
visual inspection, such as reference manuals describing the security
features included in various state and federal government issued identity
documents. Other tools such as black lights and magnifying glasses were
also commonly available to help staff view the security features embedded
in certain documents. However, we found that the extent to which staff
actually used these tools varied.

Despite the training and other measures to aid visual inspection, these
approaches are often not enough for employees to make a definitive
determination of a document’s authenticity. Staff and managers we
interviewed frequently expressed concern that the variety of valid state
birth certificates, social security cards, out-of-state licenses and
immigration documents, made it extremely difficult to catch those that are




Page 17                                    GAO-03-920 SSNs and Driver Licensing
                             forged, short of them being obvious fakes.18 They also frequently expressed
                             a need for better access to automated means of verifying these documents.


States Employ Additional     Because of the vulnerabilities associated with the visual inspection of
Safeguards to Verify         documents, states employ more extensive safeguards to better deter and
Identity and Prevent Fraud   detect identity theft and fraud. These include seeking out independent
                             third-party data sources to corroborate identity information and
                             documents provided by driver license applicants, utilizing computer
                             systems to strengthen the integrity of their licensing process, and using
                             other innovative tools to better verify applicants’ identity information and
                             deter fraud.

                             At the time of our review, a number of states we visited were either using
                             or pursuing the use of other tools to electronically verify identity
                             information with issuing agencies and other independent third parties.
                             Officials in several states we visited told us that they wanted access to the
                             Department of Homeland Security (DHS)19 immigration information to
                             verify the identity documents of noncitizen applicants. Further, a state
                             with a large immigrant and noncitizen population had contracted with
                             DHS to routinely authenticate immigration documents and other
                             information relevant to a person’s citizenship and immigration status.20 A
                             second state was in the process of negotiating access to these records.
                             Statewide birth and death information was also viewed by state
                             administrators as key to the identity verification process. Accordingly,
                             several of the states we visited have periodically used electronic queries or
                             data matches to access birth or death records.

                             Three of the nine states we visited were pilot-testing or considering the
                             use of private vendors to strengthen their identity verification and fraud
                             detection procedures. These private vendors typically access various
                             information sources, including civil and criminal records, credit


                             18
                                SSA has issued 53 versions of the social security card. Those issued before 1983 lack
                             counterfeit-resistance and tamper proof security features. When issuing new versions of
                             the social security card, SSA allows prior versions to remain valid because issuing new
                             cards to all number holders would be costly. U.S. birth certificates, issued by each of the
                             50 states and the District of Columbia and in some cases by local government units within
                             the state, vary according to the provisions of the issuing government unit.
                             19
                                  The former Immigration and Naturalization Service has been transferred to DHS.
                             20
                              In some states, noncitizens must document that they have a legal presence in the United
                             States, as well as proof of their identity, as a condition for receiving a license.




                             Page 18                                              GAO-03-920 SSNs and Driver Licensing
information, address information, state driver records, and state birth and
death data to help driver licensing agencies corroborate information
provided by applicants and correctly issue licenses. At the time of our
review, one state was pilot-testing on-line access to a private vendor in a
limited number of sites. AAMVA officials did not have national data on the
extent to which other states are using innovative third-party verification
tools to strengthen the integrity of their licensing procedures. However,
they generally noted that such practices are not routinely used to
supplement states’ primary practice of visually inspecting documents.

Several states we visited made extensive use of computer systems to
prevent identity theft and fraud. Several states have computer systems
capable of screening for multiple individuals in their state with the same
or similar identity information. For example, one state’s computer system
automatically cross-matches first-time applicants’ personal information
against existing driver records in the database to search for such
situations. When states do not have the capability to routinely perform
such cross-matches, employees may inadvertently issue licenses to
individuals who may be using the identity information of someone the
state has previously licensed.

Some states’ computer systems are designed to prevent the issuance of a
license in certain high-risk situations. For example, one state’s system
terminates the processing of a transaction if identity information does not
verify with SSA, or if staff attempt to by-pass this verification step. Staff
are also prevented from overriding the system and issuing the license
unless an authorized person—generally a higher-level official—intervenes.
Similarly, some states had systems that could prevent issuance of a license
if an individual’s personal information already existed in the states’ driver
records, or DHS information failed to verify. Further, in cases where fraud
is suspected, most states’ systems—although not all—are capable of
flagging the transaction and automatically transmitting this information to
other offices within the state to prevent persons from “shopping” sites
once they were denied at the first location. Officials in one state that
lacked this protection told us that in cases of suspected fraud, staff relied
on manual processes such as telephone calls and e-mails to alert other
offices about suspicious individuals and false documents.

Finally, to varying degrees, the states we visited have instituted additional
controls to better address identity theft and fraud issues. Due to concerns
about the quality and integrity of other state licensing systems, three states
prohibit or limit the acceptance of out-of-state licenses as a sole or
primary identity document. Officials from another state told us that they


Page 19                                    GAO-03-920 SSNs and Driver Licensing
                           would not accept such documents from 20 states that they have
                           determined to have less stringent verification processes. A few other
                           states have also instituted policies requiring that two employees review or
                           sign-off on the authenticity of documents provided by applicants before a
                           license can be issued. This separation of responsibilities provides for
                           additional scrutiny of documents and may act as a further check against
                           employee fraud. Another common practice among several states was to
                           copy all identity documents if during the application process, fraud was
                           suspected. This provides the licensing agency with key information for
                           investigating the individual’s alleged identity. An official in one state told
                           us that staff are trained to collect and copy identity documents upfront
                           regardless of whether fraud is suspected at the time.

                           All nine states we visited also store and transmit information such as
                           digital photographs and signatures for verification purposes. Two states
                           also captured fingerprints at the time of application, but only one of them
                           used biometric technology to electronically verify this identity information
                           for individuals renewing licenses. Another safeguard used by two states is
                           the issuance of temporary licenses when identity information has not been
                           corroborated at the time of application. Such licenses lack photographs
                           and security features common to permanent licenses or clearly state that
                           they are not valid for identity verification purposes. However, a third
                           state’s temporary license looks the same and includes identical
                           information as its permanent license. As a result, this license could
                           continue to be presented as an identity document by individuals even if
                           the circumstances under which it was issued are ultimately determined to
                           be fraudulent.


States Lack a Systematic   Despite the additional safeguards taken by some states, licensing agencies
Means to Exchange          lack a systematic means to exchange information on all drivers
Records on All Drivers     nationwide, limiting their ability to deter identity theft and fraud.
                           Currently, states have automated access and are required to use the NDR,
                           which is a DOT database of 39 million problem drivers. With this system,
                           licensing agencies have the ability to simultaneously query all 50 states to
                           determine whether an applicant’s name appears in the database. For
                           commercial drivers, states obtain information on their licensing,
                           identification, and disqualification from the CDLIS database of 11 million
                           records. States are required to input driver information into CDLIS and to
                           use the system to verify commercial driver record information during the
                           licensing process.




                           Page 20                                     GAO-03-920 SSNs and Driver Licensing
Because the NDR and CDLIS target specific driver populations and do not
include the records and identity information of the approximately
188 million drivers operating in the United States, state driver licensing
agencies lack a single inquiry process to determine whether or not a
person has ever been issued a license. Numerous officials in the states we
visited told us that having a more efficient means of electronic interstate
communications, that included the electronic transfer of identity
information such as digital photographs and signatures, would improve
the integrity of their licensing process. Officials in the states we visited
were particularly concerned about individuals using licenses issued by
other states as identity documents and their inability to quickly query all
states’ databases to corroborate key information. As a result, states are
limited in their ability to determine whether other states’ identity
documents are authentic or to identify multiple individuals using the same
personal identifying information in other states.

Our analysis of one state’s data demonstrates the potential vulnerabilities
driver licensing agencies currently face when accepting out-of-state
licenses as proof of identity. We examined data from one state’s internal
state cross-match of its existing driving records and identified numerous
instances where the same out-of-state license number had been used by
multiple individuals with different names and dates of birth to apply for
and obtain a new license. We forwarded about 100 of these license
numbers to the alleged issuing state and asked them to provide us with
key information on the owner of record. We found 96 cases of potential
identity fraud involving 52 of the driver licenses numbers. For example,
states reported some license numbers as invalid or as being issued to
someone other than the persons that had used them. One state reported
back that the license number we submitted to them was actually a zip
code, rather than a genuine state-issued license number. Another license
was reported by the issuing state to be a valid number that had been
counterfeited and used in several states.

A July 2001 report to the Congress prepared by DOT in cooperation with
AAMVA, identified alternatives to improving state data exchanges and
discussed various options for change.21 The specialized nature of NDR and
CDLIS does not allow states to verify licenses for all drivers—a means to


21
  U.S. Department of Transportation, NHTSA in conjunction with Federal Motor Carrier
Safety Administration and American Association of Motor Vehicle Administrators, Report
to Congress: Evaluation of Driver Licensing Information Programs and Assessment of
Technologies. (July 2001).




Page 21                                          GAO-03-920 SSNs and Driver Licensing
             identify potential identity fraud. However, the report concluded that an
             alternative system encompassing all driver records could operate
             efficiently using existing programs developed for CDLIS and on hardware
             that is currently in use. However, the report also concluded that before
             such a system could be developed, several potential obstacles should be
             addressed. These include agreeing on the use of a unique identifier by
             which to query all state driving records, ensuring that all states participate,
             defining the role of the federal government, and funding the costs of
             developing and converting to an all-driver system. The report also
             acknowledged that state resources for development and implementation
             would be necessary to cover projected costs, which AAMVA has estimated
             to be about $78 million over 3 years. However, the report concluded that,
             once operational, user fees similar to those imposed for CDLIS could be
             levied by states to cover operational expenses.


             The driver license is a key identity document that can be used by
Conclusion   individuals to obtain a range of public and private services nationwide.
             Accordingly, state driver license agencies face a daunting task in ensuring
             that the identity information of those to whom they issue licenses is
             verified. However, states’ effectiveness in this area is often dependent on
             several factors, including the receipt of timely and accurate identity
             information from SSA, the extent to which they implement additional
             identity verification and fraud detection tools, and their ability to quickly
             and systematically share key driving record information with other state
             licensing systems. Deficiencies in any of these areas may weaken states’
             efforts to ensure the integrity of their licensing decisions.

             Unfortunately, design and management weaknesses associated with SSA’s
             verification service have limited its effectiveness. States that are unable to
             take full advantage of the service and others that are waiting for the
             opportunity to use it remain vulnerable to identity theft and fraud. SSA’s
             recent efforts to refocus management attention on improving its service
             represents a positive step and may be key to moving more state licensing
             agencies away from processes that rely heavily on fraud-prone visual
             inspections of identity documents, to one in which information such as an
             individual’s SSN, name, and date of birth can be quickly and independently
             corroborated. However, sustained attention to improving its service is
             needed. Furthermore, states that continue to rely primarily or partly on
             SSA’s batch verification service still risk issuing licenses to individuals
             using the SSNs and other identity information of deceased individuals.
             This remains a critical flaw in SSA’s service and states’ efforts to
             strengthen the integrity of the driver license.


             Page 22                                     GAO-03-920 SSNs and Driver Licensing
                      Since September 11th, more state driver licensing agencies have begun to
                      reassess their prior view that driver licenses are simply an authorization to
                      operate a motor vehicle and have taken aggressive actions to strengthen
                      the integrity of this important identity document. However, licensing
                      programs remain state-administered and may vary considerably in the
                      tools provided to front-line staff to verify identity information, such as
                      access to automated independent third-party data sources. This has
                      potentially serious consequences for the numerous public and private
                      sector service providers who rely on the driver license as an identity
                      document, but may be unaware that not all states’ licenses are equal in
                      terms of the integrity of the identifying information included on them.

                      Beyond the actions taken by individual states, coordination and data
                      sharing is key to addressing many of the factors that allow identity theft
                      and fraud to continue in the driver licensing process. No single state has
                      overarching authority to require information sharing nationwide, define
                      minimum standards for proof of identity, or mandate the development of a
                      systematic means for interstate communication. However, cooperative
                      efforts between the federal government, the states, and AAMVA have
                      identified and facilitated technological options for improving the exchange
                      of driver record data among all states. We recognize that potential barriers
                      related to system’s design, funding, privacy rights, and states’ willingness
                      to use such a tool have yet to be fully resolved. However, given the
                      potential economic and national security implications associated with
                      identity theft at the point of driver licensing, sustained leadership at the
                      federal level could be the catalyst for needed change.


                      In light of the homeland security implications associated with states’
Matter for            inability to systematically exchange driver license identity information and
Congressional         the need for sustained leadership in this area, the Congress, in partnership
                      with the states, should consider authorizing the development of a national
Consideration         data sharing system for driver records.


                      Considering the significant increase in the number of on-line requests that
Recommendations       SSA anticipates receiving from states, as well as the weaknesses that we
                      identified in SSA’s service that may increase states’ vulnerability to
                      identity fraud, we recommend that the Commissioner of Social Security
                      take the following actions:

                  •   Develop performance measures essential to assessing the quality of the
                      service provided.


                      Page 23                                    GAO-03-920 SSNs and Driver Licensing
                     •   Develop a strategy for improving the nonmatch rate for SSA’s verification
                         service. This should include identifying additional information it can
                         reasonably and legally disclose to state driver-licensing agencies as well as
                         actions states can take to prevent nonmatches.

                     •   Modify SSA’s batch verification method to include a match against its
                         nationwide death records.


                         We obtained written comments on a draft of this report from the
Agency Comments          Commissioner of SSA. SSA’s comments are reproduced in appendix II.
and Our Evaluation       SSA also provided additional technical comments, which we incorporated
                         in the report as appropriate. We also requested that AAMVA officials
                         review the technical accuracy of our discussion of AAMVA’s role in the
                         SSN verification process, as well as our characterization of states’ identity
                         verification and fraud prevention activities. We incorporated AAMVA’s
                         comments in the report as appropriate.

                         SSA generally agreed with our findings regarding its SSN verification
                         service and said that recent improvements have increased states’ use of
                         the service. The agency noted that it is continuing to investigate the
                         sequence of events surrounding our ability to obtain driver licenses with
                         counterfeit documents and the SSNs of deceased individuals. SSA also
                         said that its service only offers confirmation that SSNs and other identity
                         information provided by driver license applicants are consistent with its
                         records and should not be perceived as a means for verifying identity.
                         Also, SSA said that any attempts to reduce the nonmatch rate for its
                         service by relaxing the match criteria would be inconsistent with the need
                         for “tighter match requirements” and increased security in the post
                         9/11 era. We agree that SSA’s service does not allow states to definitively
                         determine the identity of driver license applicants and have made small
                         changes to ensure that our report will not be misinterpreted. However, we
                         continue to believe that the verification service, in combination with other
                         verification tools used by the states, is key to corroborating the identity
                         information presented by driver license applicants. We also are not
                         suggesting that SSA compromise the integrity of its verification service in
                         order to reduce the nonmatch rate. However, our report shows that about
                         half of all verification failures are for name mismatches. Such mismatches
                         are thought to commonly occur due to changes in marital status. We
                         continue to believe that opportunities exist for SSA to work with the states
                         to explore options for addressing this issue and to ultimately improve the
                         overall quality of its service.




                         Page 24                                    GAO-03-920 SSNs and Driver Licensing
In response to our specific recommendations, SSA disagreed that it should
develop measures for assessing the quality of its SSN on-line verification
service. Instead, SSA said that it plans to develop a performance baseline
for enumeration accuracy to measure whether applicants were entitled to
receive an SSN based on supporting documentation. SSA did not believe
that developing performance measures specifically for its verification
service would result in improved identity authentication. However, we
continue to believe that the verification service, in combination with other
tools used by the states, is key to corroborating driver license applicants’
identity information. As our report notes, performance concerns and
issues often affected the extent to which states used SSA’s verification
service, or whether they opted to use the service at all. Thus, some states
lacked a key tool for corroborating the identity information of driver
license applicants. We continue to believe that SSA should develop
measures for its service to monitor and assess systems availability,
outages, response times and other key aspects of performance. Without
such measures, SSA lacks a means to identify performance problems and
take corrective actions when needed.

SSA agreed with our recommendations that it develop a strategy for
improving the nonmatch rate for its service and that it modify the batch
process to include a match against its death records. However, the agency
said that factors such as legal restrictions on the information it may
disclose to states and limited systems resources could restrict the actions
it can take. Indeed, we encourage SSA to work within the existing law to
develop policies to reduce nonmatches and to better assist states when
they occur. Also, in view of states’ vulnerability to licensing individuals
using deceased persons’ SSN information and the volume of batch
verification requests submitted to SSA by the states, we believe immediate
action is needed.

We are sending copies of this report to the Commissioner of SSA and other
interested parties. Copies will also be made available to others upon
request. In addition, the report will be available at no charge on GAO’s
Web site at http://www.gao.gov. If you have any questions concerning this




Page 25                                   GAO-03-920 SSNs and Driver Licensing
report, please call me on (202) 512-7215. The major contributors to this
report are listed in appendix III.




Barbara D. Bovbjerg
Director, Education, Workforce,
 and Income Security Issues




Page 26                                   GAO-03-920 SSNs and Driver Licensing
             Appendix I: Scope and Methodology
Appendix I: Scope and Methodology


             This appendix provides additional details about our analysis of the Social
             Security Administration’s (SSA) verification services and states’ practices
             for verifying the identity of driver license applicants. To attain our
             objectives, we obtained and reviewed various reports related to the issue
             of identity verification from state auditors, SSA’s Office of Inspector
             General, and the American Association of Motor Vehicle Administrators
             (AAMVA). We reviewed federal requirements governing social security
             number (SSN) use in the driver licensing process, SSA’s policies for
             disclosing identity information to licensing agencies, and numerous
             verification agreements between SSA and the states. We analyzed
             nationwide data on states’ use of SSA’s verification service, including the
             volume of records submitted, trends in usage, and the rate at which SSNs
             failed to verify between October 1997 through May 2003.1 We interviewed
             SSA officials responsible for the SSN verification data with regard to the
             reliability of the data, and determined the data to be sufficiently reliable
             for our reporting purposes. We telephoned or visited states that were not
             using SSA’s service to obtain general information about their identity
             verification practices, as well as their plans for using SSA’s service in the
             future.

             To obtain more specific information on the design and management of
             SSA’s batch and on-line verification service, we interviewed key SSA line
             and management officials as well as AAMVA officials responsible for co-
             managing the on-line service. We also reviewed an SSA/AAMVA evaluation
             of a pilot of the on-line method. 2 To determine batch service states’
             vulnerability to individuals who may use deceased persons’ SSNs to obtain
             a license, we matched approximately 500,000 batch verification requests
             submitted by one state for the month of December 2002 against SSA’s
             Master Death file.3 We identified 44 instances in which SSA verified an SSN
             submitted by the state that matched an SSN in the death record where the
             death occurred before December 2002. In order to determine whether
             these individuals actually received a license or identity card, we submitted


             1
               “States” for the purposes of this report is defined as the 50 states plus the District of
             Columbia.
             2
             Evaluation of the Social Security Number Online Verification System for the American
             Association of Motor Vehicle Administrators, Social Security Administration (Jan. 1998).
             3
               These transactions include any transaction where an SSN was collected from an applicant
             (i.e., issuance of licenses, IDs, motor vehicle registration, etc.). SSA maintains a death
             master file containing about 70 million records of persons who have been reported to the
             agency as being deceased. SSA only verifies the deaths of persons if it needs to make
             benefit decisions. The Master Death File for this review was current as of January 31, 2003.




             Page 27                                                GAO-03-920 SSNs and Driver Licensing
Appendix I: Scope and Methodology




the 44 cases to the state licensing agency for its review. The state officials
confirmed that licenses or identification cards had been issued in 41 cases
and are currently reviewing the remaining cases. Because we selected a
judgmental sample of cases to review, our findings are not generalizable to
the entire state over time or to any other state.

To gain more in-depth information on specific challenges states may
encounter in their efforts to verify applicant identity documents, as well as
their policies and procedures for doing so, we conducted field work in
California, Florida, Georgia, Maine, Maryland, Massachusetts, Ohio,
Pennsylvania, and Tennessee. At these locations we interviewed key
management and line staff and obtained data and documents relative to
their verification processes and tools. We selected states that were
geographically dispersed to obtain a mix that (1) did, and did not, issue
temporary licenses before issuing permanent licenses, and (2) have, and
have not, used one or both of SSA’s verification services. We also chose
some states that had large immigrant populations or were identified as
using innovative practices to verify identity. We also interviewed and
obtained information from representatives of private businesses that offer
commercial services to assist driver licensing agencies in verifying identity
information.

Finally, to assess states’ vulnerability to accepting fraudulent out-of-state
driving licenses as an identity document, we used one state’s listing
representing numerous instances where the same out-of-state license
number was used multiple times to obtain a license in another state. We
selected about 100 cases where the name and date of birth of the
individual were clearly different from one record to the next and
submitted about 100 of them to the original issuing states. We obtained
information from the states identifying the name and date of birth of the
owner of the driver license to determine whether there was possible
identification fraud. We conducted internal reliability checks for data
received from state driver licensing agencies. Because we selected a
judgmental sample of cases to review, our findings are not generalizable.
We conducted our work from July 2002 through May 2003 in accordance
with generally accepted government auditing standards.




Page 28                                     GAO-03-920 SSNs and Driver Licensing
              Appendix II: Comments from the Social Security Administration
Appendix II: Comments from the Social
Security Administration




              Page 29                                          GAO-03-920 SSNs and Driver Licensing
Appendix II: Comments from the Social Security Administration




Page 30                                          GAO-03-920 SSNs and Driver Licensing
Appendix II: Comments from the Social Security Administration




Page 31                                          GAO-03-920 SSNs and Driver Licensing
Appendix II: Comments from the Social Security Administration




Page 32                                          GAO-03-920 SSNs and Driver Licensing
                  Appendix III: GAO Contacts and Staff
Appendix III: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Barbara Bovbjerg, Director, (202) 512-7215
GAO Contacts      Daniel Bertoni, Assistant Director, (202) 512-5988
                  Jacquelyn Stewart, Analyst-in-Charge, (202) 512-7232


                  In addition to those named above, the following team members
Staff             contributed to this report throughout all aspects of its development: Raun
Acknowledgments   Lazier, Caterina Pisciotta, and Dorothy Yee. In addition, Daniel Schwimer,
                  Mary Dorsey, Shana Wallace, Raymond Wessmiller, and Corrina Nicolaou
                  made contributions.




                  Page 33                                   GAO-03-920 SSNs and Driver Licensing
             Related GAO Products
Related GAO Products


             Social Security Numbers: Ensuring the Integrity of the SSN. GAO-03-
             941T. Washington, D.C.: July 10, 2003.

             Social Security Numbers: Government Benefits from SSN Use but Could
             Provide Better Safeguards. GAO-02-352. Washington, D.C.: May 31, 2002.

             Social Security Numbers: SSNs Are Widely Used by Government and
             Could Be Better Protected. GAO-02-691T. Washington, D.C.: April 29, 2002.

             Child Support Enforcement: Most States Collect Drivers’ SSNs and Use
             Them to Enforce Child Support. GAO-02-239. Washington, D.C.: February
             15, 2002.

             Responses to Questions From May 18th Hearing on Uses of Social
             Security Numbers. HEHS/AIMD-00-289R. Washington, D.C.: August 21,
             2000.

             Social Security Numbers: Subcommittee Questions Concerning the Use
             of the Number for Purposes Not Related to Social Security.
             HEHS/AIMD-00-253R. Washington, D.C.: July 7, 2000.

             Social Security: Government and Other Uses of the Social Security
             Number are Widespread. GAO/T-HEHS-00-120. Washington, D.C.: May 18,
             2000.

             Social Security: Use of the Social Security Number is Widespread.
             GAO/T-HEHS-00-111. Washington, D.C.: May 9, 2000.

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




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             Page 34                                  GAO-03-920 SSNs and Driver Licensing
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