oversight

Supplemental Security Income: Incentive Payments Have Reduced Benefit Overpayments to Prisoners

Published by the Government Accountability Office on 1999-11-22.

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

                United States General Accounting Office

GAO             Report to Congressional Committees




November 1999
                SUPPLEMENTAL
                SECURITY INCOME
                Incentive Payments
                Have Reduced Benefit
                Overpayments to
                Prisoners




GAO/HEHS-00-2
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division

      B-279541

      November 22, 1999

      The Honorable William V. Roth, Jr.
      Chairman
      The Honorable Daniel Patrick Moynihan
      Ranking Minority Member
      Committee on Finance
      United States Senate

      The Honorable Bill Archer
      Chairman
      The Honorable Charles B. Rangel
      Ranking Minority Member
      Committee on Ways and Means
      House of Representatives

      The Supplemental Security Income (SSI) program, administered by the
      Social Security Administration (SSA), is the largest cash assistance program
      in the United States. In 1998, SSI paid about $29 billion to needy aged,
      blind, or disabled individuals. People who are confined in prisons or
      correctional facilities for at least 1 full month are ineligible for SSI benefits.
      Despite this prohibition, SSA’s Office of the Inspector General (OIG) and we
      have reported that SSA has paid millions of dollars of SSI benefits to
      ineligible inmates.1

      In November 1995, SSA began a major effort to obtain commitments from
      correctional facilities to report inmate information. These efforts were
      extremely successful. We estimate that, by August 1996, SSA had obtained
      reporting commitments from the Federal Bureau of Prisons and about
      4,500 of approximately 5,500 state and local correctional facilities.

      On August 22, 1996, federal welfare reform legislation provided SSA with a
      new way to identify ineligible prisoners receiving SSI. The legislation
      authorized SSA to contract with correctional facilities to pay them a
      maximum of $400 for timely information that resulted in suspension of an
      ineligible inmate’s benefits.

      The legislation required that we study and report on the impact of these
      incentive payments on the SSI program. Specifically, this report addresses
      the following questions: (1) How many correctional facilities signed

      1
        SSA, OIG, Effectiveness in Obtaining Records to Identify Prisoners (Washington, D.C.: SSA,
      May 1996) and Supplemental Security Income: SSA Efforts Fall Short in Correcting Erroneous
      Payments to Prisoners (GAO/HEHS-96-152, Aug. 30, 1996).



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                   incentive payment agreements, how many suspensions did SSA make, and
                   what amount of overpayments did SSA identify and prevent at these
                   facilities; (2) how many of the incentive payment agreements represented
                   new reporting commitments that SSA did not have before the authorization
                   of incentive payments, and what were the results at facilities that made
                   these new commitments; and (3) what other benefits has the legislation
                   produced?

                   We used SSA’s computerized data to identify facilities that signed incentive
                   payment agreements with SSA and to determine the number of suspensions
                   and amount of overpayments identified and prevented at those facilities.
                   We also identified and quantified certain costs of implementing the
                   incentive payment program. We discussed the incentive program with SSA
                   officials and obtained their perspectives on other benefits of the
                   legislation. We also sampled facilities that had agreed to provide data to
                   SSA before signing incentive agreements to determine if these facilities
                   improved their reporting practices after signing.

                   We conducted our work between April 1998 and September 1999 in
                   accordance with generally accepted government auditing standards. (See
                   app. I for a more detailed description of our scope and methodology.)


                   Since the legislation was passed, SSA has signed incentive payment
Results in Brief   agreements with 3,115 correctional facilities. Between the date each
                   facility signed an incentive payment agreement and November 27, 1998,
                   the most recent date for which we have comprehensive data, SSA made a
                   total of 39,137 SSI benefit suspensions at these facilities. By suspending
                   benefits, SSA identified $32.1 million of potentially recoverable SSI
                   overpayments that it had already made and prevented approximately
                   $37.6 million in future erroneous SSI payments.2 SSA made incentive
                   payments of almost $10 million to facilities, as required by the incentive
                   agreements.

                   As a result of the legislation, SSA now receives more prisoner information
                   than before. Our analysis showed that 210 of the 3,115 incentive

                   2
                    A suspension, which is usually retroactive, results in the identification of an overpayment that SSA
                   has already made, the prevention of subsequent overpayments, or both. For example, if a correctional
                   facility notifies SSA in early July that an individual was confined in May, and that inmate is receiving
                   SSI benefits, SSA suspends benefits effective June 1, because June is the first full month of
                   confinement. This suspension involves stopping the August payment and beginning the process of
                   collecting benefits paid erroneously in June and July. If the individual remains confined, the August
                   payment and any subsequent benefits not paid because of the suspension are considered to be
                   overpayments prevented.



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             agreements were new commitments; that is, 210 facilities had not agreed
             to provide inmate data to SSA before the incentive agreement legislation. At
             the facilities that made new commitments, SSA made 4,597 suspensions,
             identified about $3.3 million in overpayments that it had made to inmates,
             and prevented future overpayments of about $3.6 million.

             The legislation also produced other benefits. First, SSA made 871
             suspensions, identified $1.4 million of past overpayments, and prevented
             about $1.6 million of future overpayments in SSA’s Old Age and Survivors
             Insurance (OASI) program and Disability Insurance (DI) program.3
             Moreover, other federal and state assistance programs, such as the Food
             Stamp program, now have access to this enhanced inmate information,
             which may help them improve the accuracy of their payments. In addition,
             after signing the agreements, some correctional facilities began to report
             confinements more frequently and in an electronic format that SSA can
             process more efficiently. This resulted in prevention of at least $2.7 million
             in future overpayments. Finally, SSA developed several new computer
             systems to facilitate operations, improve the control and monitoring of
             facility reporting and prisoner suspensions, and account for incentive
             payments.


             SSA administers three of the nation’s largest benefit programs: SSI; OASI, also
Background   known as Social Security; and DI. Under SSI, the largest cash assistance
             program in the United States and the subject of this report, SSA provides
             cash assistance to needy individuals who are aged, blind, or disabled.
             Federal SSI benefits are funded by general revenues and are based on
             financial need. In 1998, SSA paid about $29 billion in SSI benefits. OASI
             provides monthly retirement benefits to workers and their dependents and
             survivors to protect them from the loss of wages resulting from retirement
             or death. DI provides monthly cash benefits to disabled workers and their
             families. OASI and DI are insurance programs funded through payroll taxes,
             and benefits are based on the contributions of individual workers and their
             employers. In 1995, the OASI and DI programs paid about $326 billion in
             benefits to about 43 million eligible beneficiaries.

             The Social Security Act provides that, under certain circumstances,
             prisoners are ineligible for SSI, OASI, or DI payments. Individuals are
             ineligible for SSI in any given month if throughout that month they are
             housed in a public institution. Individuals are ineligible for OASI and DI if
             they are confined in a correctional facility as a result of committing an

             3
              Under OASI and DI, prisoners are ineligible for benefits under certain conditions.



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                         offense punishable by imprisonment for more than 1 year. In the above
                         cases, a confined recipient or a representative payee (an individual or
                         organization that receives payments on behalf of SSI recipients who are
                         unable to manage their own affairs) is required to report the confinement
                         to SSA, so that benefits can be suspended.

                         Despite the prohibitions in the act, ineligible prisoners have been receiving
                         SSI, OASI, and DI benefits. In 1996, we reported that SSA had made
                         $3.9 million in erroneous SSI payments to over 2,300 prisoners in the 12
                         county jail systems that we reviewed. Erroneous payments occurred
                         because confinements were not reported by SSI beneficiaries,
                         representative payees, or correctional facilities and because SSA’s efforts to
                         periodically verify recipients’ continued eligibility for SSI were ineffective.
                         Also in 1996, SSA’s OIG reported that SSA had achieved only limited success
                         in obtaining prisoner information from federal, state, and local institutions
                         and, as a result, had continued to make payments to ineligible inmates.


SSA’s Efforts to Stop    In November 1995, while our audit and that of the OIG were being
Payments to Ineligible   completed, SSA undertook a major effort to prevent erroneous payments to
Prisoners                prisoners. First, SSA formed a work group that focused exclusively on
                         prisoner issues. Second, it established a regional prisoner coordinator in
                         each SSA region to manage the effort at the field level. Third, SSA used its
                         network of about 1,300 field offices to identify and contact correctional
                         institutions and obtain commitments from them to report prisoner data.
                         Fourth, in March 1996, the SSA Commissioner appealed to all federal and
                         state penal institutions to send SSA a census of individuals who were
                         confined in their facilities.

                         By August 21, 1996, SSA had successfully negotiated reporting agreements
                         with the Federal Bureau of Prisons covering 137 federal facilities and with
                         about 4,500 of approximately 5,500 state and local correctional facilities.
                         During the period from January 1, 1996, through August 21, 1996, SSA
                         suspended the benefits of about 30,203 prisoners. As a result of these
                         suspensions, SSA identified about $151 million in overpayments already
                         made and prevented about $173 million in additional overpayments. The
                         agreements included most state facilities, facilities in Puerto Rico and the
                         District of Columbia, and most large local facilities. Although most
                         facilities began reporting, some reported on an irregular basis; in a less
                         than timely manner; or on paper rather than computer disk or tape, thus
                         making it more difficult for SSA to match files.




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1996 Legislation           On August 22, 1996, the Personal Responsibility and Work Opportunity
Authorizing Incentive      Reconciliation Act of 1996 (PRWORA) was enacted, authorizing SSA to enter
Payments for Prisoner      into incentive payment agreements with interested state and local
                           correctional facilities in order to increase prison reporting to SSA.4 The
Information                agreement that SSA developed, and that must be in place before SSA pays a
                           facility, includes several reporting provisions. For example, each month
                           the facility must provide SSA with a computer tape, cartridge, or disk, in an
                           SSA-prescribed format, showing new inmates’ names, Social Security
                           numbers, dates of birth, and confinement dates. As part of the agreement,
                           the facility must also complete a direct deposit form and agree to accept
                           payment from SSA through direct deposit. Finally, the facility must show
                           the names, Social Security numbers, and other information for its entire
                           inmate population in its initial report. Under these agreements, SSA pays
                           facilities for timely information that enables SSA to suspend ineligible
                           prisoners’ SSI benefits.

                           PRWORA authorizes SSA to make different levels of incentive payments on
                           the basis of the timeliness of the data provided. SSA is authorized to pay
                           $400 if it suspends SSI benefits on the basis of information provided within
                           30 days after a prisoner’s confinement. SSA is authorized to pay $200 if it
                           suspends SSI benefits on the basis of information provided between 31 and
                           90 days after confinement. SSA is not authorized to pay for information
                           received more than 90 days after confinement, even when it results in a
                           suspension.


                           After the enactment of PRWORA, SSA negotiated and signed incentive
SSA Signed Incentive       agreements with 3,115—almost 60 percent—of the approximately 5,500
Agreements With            state and local correctional facilities nationwide. Between the time each
Many Correctional          facility signed its incentive agreement and November 27, 1998, SSA made
                           about 39,000 SSI suspensions at these facilities. As a result of these
Facilities and             suspensions, SSA identified approximately $32 million in SSI overpayments
Suspended Payments         it had already made to inmates and prevented about $38 million in future
                           overpayments. SSA made incentive payments to facilities of almost
to Thousands of            $10 million for the information they provided.
Prisoners
SSA Negotiated Incentive   Beginning in early 1997, SSA personnel contacted state and local
Agreements                 correctional facilities, including those that had already agreed to report
                           prisoner data, and offered them the opportunity to sign the new incentive
                           payment agreement. SSA signed incentive agreements with all 50 states,

                           4
                            Federal correctional facilities are not eligible for incentive payments.



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                         covering most state-run facilities; the District of Columbia; all of the large
                         local jail systems; and many of the smaller local jails. As of November 27,
                         1998, the most recent date for which we have data, we estimate that
                         incentive agreements covered about 80 percent of all confined individuals.

                         Although all 50 states and many local systems completed incentive
                         agreements, not all signed immediately. About 66 percent of the states
                         signed during the first 6 months; most others signed by March 1998. About
                         45 percent of the local facilities signed incentive agreements. According to
                         SSA, there were two main reasons that 55 percent of the local facilities did
                         not sign incentive agreements. First, in some cases the local facility would
                         not have received the incentive payment directly. Rather, the payment
                         would have gone into the county’s general fund or some other central
                         treasury. Second, some facilities did not want to conform to the strict
                         electronic reporting requirements outlined in the incentive agreement.
                         According to SSA, some of these local jails do not have computers.

                         The fact that many local facilities did not sign incentive agreements does
                         not mean that these facilities are not providing inmate data to SSA. Many of
                         these facilities have other types of reporting agreements under which they
                         provide data to SSA but do not receive incentive payments. There are,
                         however, a limited number of facilities that do not report. (See app. II for
                         information on other agreements that SSA has made with correctional
                         facilities and a summary of all SSA reporting agreements by state.)


SSA Made Suspensions,    Between the time each facility signed its incentive agreement and
Identified Potentially   November 27, 1998, SSA made 39,137 SSI suspensions at the 3,115 facilities
Recoverable              with incentive payment agreements. SSA made about 25 percent of the
                         suspensions at state-run facilities and about 75 percent at local facilities.
Overpayments, and        California, Florida, Louisiana, New York, Ohio, and Texas together
Prevented Future         accounted for almost half of all suspensions. (See app. III for a summary
Overpayments             of SSI suspensions by state and agreement type.)

                         As a result of these suspensions, SSA identified $32.1 million of potentially
                         recoverable overpayments it had already made. It is important that SSA
                         identify overpayments to prisoners so that it can initiate the various
                         mechanisms available to collect them. These mechanisms include
                         (1) withholding all or a portion of the legitimate monthly SSI benefits of a
                         former inmate who has reestablished eligibility for SSI benefits,
                         (2) withholding a portion of a former prisoner’s OASI or DI benefits, and
                         (3) withholding an individual’s income tax refund. Finally, if SSA is



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                          unsuccessful in collecting an overpayment despite making all reasonable
                          efforts to do so, the agency may refer the overpayment to the Department
                          of Justice for recovery through civil action.

                          More importantly, perhaps, the suspension of inmates’ SSI benefits also
                          prevented about $37.6 million in future overpayments. Preventing
                          overpayments is obviously far more effective than detecting those already
                          made because the government does not incur a monetary loss that must be
                          collected from the inmate. For example, when an overpayment is made,
                          the government may not be able to collect all of the money owed by the
                          inmate. Even if the overpayment is recovered through one of the various
                          mechanisms described above, the government incurs certain
                          administrative costs related to the recovery and loses the interest on the
                          investment of the outstanding overpayment until it is recovered. Further,
                          preventing overpayments maintains program integrity and, in turn,
                          promotes public trust in the program.


States Received Varying   Between March 7, 1997, and November 27, 1998, SSA made incentive
Amounts of Incentive      payments totaling about $10 million (see table 1). About 80 percent of the
Payments                  payments were for the maximum $400, indicating that correctional
                          facilities provided information to SSA within 30 days of the individual’s
                          confinement. The remaining 20 percent were for $200. About 80 percent of
                          the payments went to local correctional facilities, and about 20 percent
                          went to state facilities.

                          Table 1 shows that six states received no incentive payments. We
                          discussed this situation with SSA officials and identified two main reasons
                          for this: three states were unable to provide data in the reporting format
                          that SSA requires, and three others did not complete the required direct
                          deposit form advising SSA where to deposit the payments.




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Table 1: Incentive Payments to State
and Local Correctional Facilities,                             Amount paid to Amount paid to
March 7, 1997-November 27,1998         State                            state       locality               Total
                                       Alabama                          $1,800          $86,000          $87,800
                                                                                               a
                                       Alaska                           35,600                            35,600
                                       Arizona                          10,400          166,200          176,600
                                       Arkansas                         56,200          132,800          189,000
                                       California                      280,800        1,406,600        1,687,400
                                       Colorado                          5,400           62,800           68,200
                                                                                               a
                                       Connecticut                     226,800                           226,800
                                                                                               a
                                       Delaware                         23,200                            23,200
                                                                                               a
                                       District of Columbia                200                               200
                                       Florida                          34,800          485,400          520,200
                                       Georgia                          40,200          142,400          182,600
                                       Guam                                  0                0                0
                                                                                               a
                                       Hawaii                           40,800                            40,800
                                       Idaho                             7,000           11,800           18,800
                                       Illinois                         27,200          154,000          181,200
                                       Indiana                          56,400           89,400          145,800
                                       Iowa                                  0           44,800           44,800
                                       Kansas                                0           52,200           52,200
                                       Kentucky                          4,000          294,200          298,200
                                       Louisiana                       123,200          503,000          626,200
                                       Maine                             7,000           55,000           62,000
                                       Maryland                          5,800           34,600           40,400
                                       Massachusetts                    94,000          319,200          413,200
                                       Michigan                         49,200          304,200          353,400
                                       Minnesota                        45,200           17,000           62,200
                                       Mississippi                      40,400           81,200          121,600
                                       Missouri                         11,000          146,400          157,400
                                       Montana                           2,200            6,000            8,200
                                       Nebraska                              0            2,400            2,400
                                       Nevada                                0            4,800            4,800
                                       New Hampshire                     7,000           40,800           47,800
                                       New Jersey                       27,800          347,600          375,400
                                       New Mexico                       12,800           40,400           53,200
                                       New York                        164,000          960,400        1,124,400
                                       North Carolina                   36,800           53,400           90,200
                                       North Dakota                      1,400            3,200            4,600
                                       Ohio                             40,200          452,400          492,600
                                                                                                      (continued)


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                                                                   Amount paid to Amount paid to
                        State                                               state       locality                            Total
                        Oklahoma                                              13,000               26,200               39,200
                        Oregon                                                  7,600              24,600               32,200
                        Pennsylvania                                                 0            175,600             175,600
                        Puerto Rico                                                  0                    0                    0
                                                                                                           a
                        Rhode Island                                          99,000                                    99,000
                        South Carolina                                        90,000               62,400             152,400
                        South Dakota                                            1,400               2,800                   4,200
                        Tennessee                                               6,200             184,000             190,200
                        Texas                                                165,000              426,000             591,000
                        Utah                                                      600              11,400               12,000
                                                                                                           a
                        Vermont                                                      0                                         0
                        Virginia                                              15,600               54,400               70,000
                        Washington                                            42,400               46,600               89,000
                        West Virginia                                             800              30,400               31,200
                        Wisconsin                                             48,800              176,200             225,000
                        Wyoming                                                   200                     0                  200
                        Total                                            $2,009,400           $7,721,200           $9,730,600

                        a
                         This state has an integrated state/county prison system; the entire incentive amount, if any, is
                        reported in the state column.




                        A total of 210 of the 3,115 incentive agreements were new commitments by
Legislation Prompted    facilities that had not agreed to provide data to SSA before PRWORA. These
Some Facilities to      210 facilities provided SSA with information that prompted the agency to
Agree to Provide        make 4,597 of the 39,137 total SSI suspensions under incentive agreements.
                        Information from these facilities accounted for $3.3 million of the
Prisoner Data for the   $32.1 million of overpayments identified, and $3.6 million of the
First Time              $37.6 million of overpayments prevented. Without the incentive payment
                        legislation, these facilities might not have reported their prisoner data to
                        SSA.



                        The incentive payment program has resulted in several benefits beyond
Incentive Program       additional SSI suspensions, overpayments identified, and overpayments
Has Produced Other      prevented. Specifically, SSA now also uses information it receives under
Benefits                incentive agreements to suspend benefits, identify overpayments, and
                        prevent future overpayments in its OASI and DI programs. SSA also makes
                        prisoner information available to other federal and state assistance



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                            programs to help them control their payments. Further, some state and
                            local facilities report more frequently or more efficiently than they did
                            before signing incentive agreements. Finally, SSA has developed several
                            new computer systems to facilitate operations, improve the control and
                            monitoring of facility reporting and prisoner suspensions, and account for
                            incentive payments.


SSA Puts SSI Inmate         PRWORA authorizes SSA to provide information it obtains under the
Information to Other Uses   incentive payment agreements to any federal or federally assisted cash,
                            food, or medical assistance program for eligibility determination purposes.
                            SSA used information it received under new incentive agreements to
                            suspend the OASI and DI benefits of 871 recipients. As a result of these
                            suspensions, SSA identified almost $1.4 million in overpayments it had
                            already made and prevented almost $1.6 million of additional OASI and DI
                            overpayments.

                            SSAalso makes selected prisoner information available to states for their
                            use in controlling Food Stamp program benefits. In addition, SSA is
                            negotiating to establish sharing agreements with the Department of
                            Veterans Affairs and the Department of Education in order to help those
                            agencies control their payments.


Some State and Local        According to SSA, before incentive payment agreements, all states, the
Correctional Facilities     District of Columbia, and Puerto Rico were reporting information to SSA.
Have Improved Their         Most were reporting monthly, some quarterly, and some only sporadically.
                            In addition, some states and many of the larger local facilities were
Reporting                   reporting on paper, which is difficult for SSA to process, rather than
                            diskette or computer tape. SSA staff told us that, in some cases, after
                            facilities signed incentive agreements they began reporting more
                            frequently and in electronic format, rather than on paper.

                            To determine the extent of reporting improvement, we reviewed a sample
                            of 69 reporters5 consisting of the 50 states, the District of Columbia,
                            Puerto Rico, and 17 of the 25 largest county jail systems. We determined
                            that 23 of the 69 improved their reporting frequency. For example, some
                            began reporting monthly rather than quarterly or semiannually or, if not
                            monthly, then more frequently than they had before signing the incentive
                            agreement. We estimated that as a result of this more frequent reporting,

                            5
                             A reporter may report for one or more facilities. For example, a state department of corrections may
                            report for all state prisons.



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                            SSA identified ineligible inmates earlier and prevented about $2.7 million of
                            overpayments at the facilities we sampled. Although we did not sample
                            small local facilities, we assume that some of these began reporting more
                            frequently after signing an incentive agreement and that, as a result, SSA
                            prevented overpayments at these facilities also. In addition, seven states
                            that were reporting inmate data to SSA on paper changed to some form of
                            electronic reporting after signing the agreement, which has reduced SSA’s
                            costs for operating the matches and speeded up the suspension process.


SSA Has Improved Its        Before implementing incentive payments, SSA was not effectively
Monitoring and Control of   monitoring and controlling prisoner agreements or prisoner data. For
Prisoner Data               example, SSA did not renegotiate several state agreements in a timely
                            manner, did not have procedures to determine if it received prisoner
                            information in accordance with the terms of its agreements, and did not
                            have controls that provided reasonable assurance that inmate information
                            it received was processed in a timely manner.

                            In conjunction with implementing incentive payments, SSA developed the
                            Incarceration Report Control System and the Prisoner Update Processing
                            System. These systems have improved monitoring and control of reporting
                            agreements and prisoner information. The first system contains
                            information about reporting agreements, reporters, facilities, details of
                            reports received, and information on incentive payments. This system
                            continuously reviews the information it contains and alerts the
                            appropriate units in SSA when a reporting agreement needs to be
                            renegotiated, or when a reporter does not provide inmate data as specified
                            in the agreement. The Prisoner Update Processing System contains
                            information on inmates. It uses this information to identify inmates who
                            are receiving benefits and alerts the appropriate SSA field office when a
                            suspension may be warranted. This system also periodically determines if
                            action has been taken on the initial alerts and, if not, issues follow-up
                            alerts.


                            The incentive payment legislation has produced significant benefits. SSA
Conclusions                 now receives prisoner information from 210 additional facilities, which
                            has resulted in the prevention of about $3.6 million in future erroneous
                            payments and the identification of approximately $3.3 million of
                            potentially recoverable overpayments SSA has already made. In some
                            cases, SSA now also receives prisoner data more frequently and in a more
                            usable format from facilities that had been reporting data before the



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                  legislation. As a result, SSA has been able to prevent $2.7 million in
                  erroneous SSI payments at the facilities we sampled. In its OASI and DI
                  programs, SSA has prevented $1.6 million in erroneous payments and
                  identified $1.4 million of potentially recoverable overpayments. In
                  addition, SSA has developed new electronic monitoring and control
                  systems for inmate data and makes these data available to other federal
                  and state agencies.

                  Some might argue that the program’s cost of $10 million is high in relation
                  to the savings realized. Most institutions reporting prisoner data today did
                  so prior to the incentive program and might have continued to do so
                  without financial incentive. Nonetheless, the benefits described above are
                  important outcomes that are likely to enhance the operation of the SSI
                  program and other federal programs for years to come.


                  We obtained comments on a draft of this report from the Commissioner of
Agency Comments   Social Security, who concurred with our findings. See appendix IV for the
                  full text of SSA’s comments.


                  We are sending copies of this report to the Honorable Kenneth S. Apfel,
                  Commissioner of Social Security, and other interested parties. We will also
                  make copies available to others on request.

                  If you or your staff have any questions regarding this report, please
                  contact me at (202) 512-7215 or Roland H. Miller at (202) 512-7246. Harry
                  Johnson, Joan Vogel, and Dennis Gehley also made key contributions to
                  this assignment.




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




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Contents



Letter                                                                                                 1


Appendix I                                                                                            16
                        Facilities With Incentive Agreements                                          16
Scope and               Facilities That Initially Did Not Agree to Provide Data to SSA but            16
Methodology               Eventually Signed Incentive Agreements
                        Suspensions, Overpayments Identified, and Overpayments                        17
                          Prevented
                        Reporting Practices                                                           17
                        Amount of Incentive Payments                                                  17

Appendix II                                                                                           18
                        Some SSI Recipients Report Confinements Themselves                            20
SSA’s Other Reporting
Agreements
Appendix III                                                                                          21

Summary of SSI
Suspensions by State
and Agreement Type
Appendix IV                                                                                           23

Comments From the
Social Security
Administration
Tables                  Table 1: Incentive Payments to State and Local Correctional                    8
                         Facilities, March 7, 1997-November 27,1998
                        Table II.1: Summary of SSA Reporting Agreements by State                      19




                        Page 14                       GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
Contents




Abbreviations

DI         Disability Insurance
IRCS       Incarceration Report Control System
OASI       Old Age and Survivors Insurance
OIG        Office of the Inspector General
PRWORA     Personal Responsibility and Work Opportunity
                Reconciliation Act of 1996
PUPS       Prisoner Update Processing System
ROAR       Recovery of Overpayments, Accounting and Reporting
                System
SSA        Social Security Administration
SSI        Supplemental Security Income


Page 15                    GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
Appendix I

Scope and Methodology


                            To measure the impact of the incentive payment legislation, we identified
                            all state and local facilities that signed incentive payment agreements with
                            the Social Security Administration (SSA) and the suspensions,
                            overpayments identified, and overpayments prevented after signing the
                            agreements. We also determined the results of agreements reached with
                            facilities that had not agreed to provide data to SSA until after incentives
                            were authorized. In addition, we sampled facilities that had previously
                            agreed to provide data to SSA to determine if incentive agreements affected
                            these facilities’ reporting practices and, in turn, the Supplemental Security
                            Income (SSI) program. We relied heavily on SSA’s various computer systems
                            for most of our information, but we did not independently verify SSA’s
                            databases. We also discussed the incentive program with SSA officials to
                            obtain their perspective on the impact of the legislation.


                            We used SSA’s Incarceration Report Control System (IRCS) to identify
Facilities With             facilities with incentive agreements. IRCS, a central computer system that
Incentive Agreements        was implemented after incentive payments were authorized, contains
                            information about correctional facilities. In addition to descriptive
                            information (name, address, facility contact, and so on), IRCS also shows
                            the type of agreement SSA has with a facility, the date the agreement was
                            signed, how often the facility has reported, and details about the reports
                            received. IRCS also contains information about facilities that do not provide
                            data to SSA, including the reasons for their not reporting. Some facilities
                            are included in IRCS more than once, and in some cases the agreement
                            information associated with those facilities is inconsistent. We spent a
                            considerable amount of time eliminating duplicates from the database.
                            However, when we could not determine which of the duplicates to
                            eliminate, we asked SSA’s field offices to clarify the situation for us.


                            To identify these facilities, we determined their agreement status before
Facilities That Initially   incentive payments and compared it with the agreement status on
Did Not Agree to            November 27, 1998. To determine a facility’s agreement status before
Provide Data to SSA         incentive payments, we combined information from several different SSA
                            sources. SSA field offices had negotiated agreements with correctional
but Eventually Signed       facilities and sent copies of those agreements to SSA headquarters. We used
Incentive Agreements        this information to establish our initial baseline data on agreements. We
                            supplemented our initial baseline data with information from IRCS.
                            Although IRCS was established after incentive payments were authorized,
                            SSA had loaded IRCS with information on agreements that existed prior to
                            the legislation, and some of that information remains in the system.



                            Page 16                        GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
                      Appendix I
                      Scope and Methodology




                      Finally, we asked SSA’s field offices to review the agreement information
                      we developed and verify its accuracy.


                      We obtained suspension information from SSA’s Prisoner Update
Suspensions,          Processing System (PUPS), which identifies suspended inmates, the
Overpayments          facilities where the individuals are confined, confinement dates, the type
Identified, and       of benefit(s) suspended, and suspension dates. We obtained overpayment
                      information from SSA’s Recovery of Overpayments, Accounting and
Overpayments          Reporting System (ROAR). ROAR controls the overpayments recovery and
Prevented             collection activity of the Old Age and Survivors Insurance (OASI) and
                      Disability Insurance (DI) programs as well as the portion of SSI
                      overpayments being withheld from title II benefits through cross-program
                      recovery. We estimated the amount of overpayments prevented by using
                      information from PUPS and two databases: the Supplemental Security
                      Record and the Master Beneficiary Record. These two databases show the
                      monthly benefits the individual was receiving when he or she went to
                      prison, and PUPS provides the information noted above as well as data on
                      actual or estimated release dates.


                      SSA officials told us that facilities that were reporting data to SSA before the
Reporting Practices   legislation reported more frequently and in a more efficient format after
                      they signed incentive agreements. We used various SSA internal reports
                      that were prepared during calendar year 1996 to determine how often and
                      in what format (for example, paper, computer tape, disk, or fax) facilities
                      were reporting to SSA before incentive payments. We compared the
                      preincentive reporting data with postincentive reporting data that we
                      obtained from IRCS and from various other SSA records to determine if
                      reporting practices had changed.


                      We used PUPS to determine the amount of incentive payments that SSA
Amount of Incentive   made to correctional facilities. PUPS calculates a facility’s incentive
Payments              payment after it determines that the facility has met all the requirements
                      necessary to receive the payment. PUPS also maintains a record of these
                      payments.




                      Page 17                         GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
Appendix II

SSA’s Other Reporting Agreements


              SSA has nonincentive agreements with the Department of Justice, covering
              federal correctional facilities, and with 1,742 state and local correctional
              facilities. Under these agreements, facilities provide prisoner information
              to SSA, but SSA does not pay them for it.

              Many of the 1,742 state and local facilities report under agreements they
              made with SSA before the Congress authorized incentives. Some of these
              agreements are memorandums of understanding, some are letters from
              correctional facilities agreeing to report data and documenting their
              reporting procedures, and some are verbal agreements. Under these
              agreements, facilities have latitude in the amount of information they
              provide and the way they provide it. Most facilities have agreed to provide
              data monthly directly to the field office. Reports may be made by mail,
              phone, or fax or may be hand-delivered. SSA processes the data and
              suspends SSI benefits when appropriate but does not pay the facilities.

              Between March 7, 1997, and November 27, 1998, for the 1,742 facilities
              with nonincentive agreements, SSA made 8,316 SSI suspensions, identified
              $6.4 million in overpayments, and prevented $6.8 million of additional SSI
              overpayments. In addition, SSA made 4,324 OASI/DI suspensions, identified
              $9.8 million in OASI/DI overpayments it had already made, and prevented
              $10.6 million of future OASI/DI overpayments.

              A total of 666 facilities do not provide any prisoner data to SSA, and in most
              cases it would not be appropriate for them to do so. According to SSA’s
              records, 446 facilities (67 percent) do not provide inmate data because
              they hold inmates for less than 1 full month. A full month is the minimum
              time that an SSI beneficiary must be confined before SSA can suspend
              benefits. The other 220 facilities do not provide data for a variety of
              reasons: 74 claim they lack the resources to assemble and provide prisoner
              data to SSA; 58 facilities, mostly juvenile, cite privacy laws that prohibit
              them from providing juveniles’ names; and 88 facilities simply refuse to
              cooperate. Table II.1 shows SSA reporting agreements by state.




              Page 18                        GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
                                       Appendix II
                                       SSA’s Other Reporting Agreements




Table II.1: Summary of SSA Reporting
Agreements by State                                                           Incentive       Nonincentive
                                       Statea                                agreement          agreement     No agreement
                                       Alabama                                       85                  35               29
                                       Alaska                                        60                   0                0
                                       American Samoa                                 0                   0                1
                                       Arizona                                       25                  11               17
                                       Arkansas                                      75                  24               31
                                       California                                   109                  40               11
                                       Colorado                                      30                  51               50
                                       Connecticut                                   21                   0                2
                                       Delaware                                       8                   0                0
                                       District of Columbia                           4                   1                0
                                       Florida                                      236                  55                2
                                       Georgia                                      174                  91               13
                                       Guam                                           0                   1                0
                                       Hawaii                                         8                   1                0
                                       Idaho                                         25                  20               12
                                       Illinois                                      97                  60               35
                                       Indiana                                       64                  55                8
                                       Iowa                                          10                  87                8
                                       Kansas                                         5                  92               10
                                       Kentucky                                      91                  24                8
                                       Louisiana                                    109                  15               49
                                       Maine                                         22                   5                0
                                       Marianas                                       0                   0                1
                                       Maryland                                      58                  13                1
                                       Massachusetts                                 35                  17                1
                                       Michigan                                     123                  24               13
                                       Minnesota                                     31                  52                8
                                       Mississippi                                   94                  46                5
                                       Missouri                                      39                  83                3
                                       Montana                                       14                  37               18
                                       Nebraska                                      11                  53                7
                                       Nevada                                         4                  30                5
                                       New Hampshire                                 14                   3                1
                                       New Jersey                                    49                   5                0
                                       New Mexico                                    38                   9               10
                                       New York                                     131                  42                6
                                       North Carolina                               131                  58               11
                                                                                                                  (continued)


                                       Page 19                            GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
                      Appendix II
                      SSA’s Other Reporting Agreements




                                                                  Incentive         Nonincentive
                      Statea                                     agreement            agreement        No agreement
                      North Dakota                                          5                    16                     12
                      Ohio                                               200                     42                     25
                      Oklahoma                                            96                     17                     52
                      Oregon                                              20                     23                     19
                      Pennsylvania                                        45                     59                      0
                      Puerto Rico                                           0                    38                      0
                      Rhode Island                                          1                     2                      0
                      South Carolina                                      71                     72                      6
                      South Dakota                                        18                     13                     13
                      Tennessee                                          131                     25                      4
                      Texas                                              247                    115                131
                      Utah                                                  7                    15                     12
                      Vermont                                               0                     9                      0
                      Virginia                                            98                     50                      0
                      Virgin Islands                                        0                     3                      0
                      Washington                                          47                     24                     13
                      West Virginia                                       18                     22                      0
                      Wisconsin                                           79                     29                      1
                      Wyoming                                               2                    28                      2
                      Total                                            3,115                  1,742                666

                      a
                       Also included are American Samoa; Guam; the Marianas; Puerto Rico; the Virgin Islands; and the
                      District of Columbia.




                      SSI recipients (or their representative payees) are responsible for reporting
Some SSI Recipients   confinements to SSA. Although self-reporting does not appear to be the
Report Confinements   norm, on the basis of reports from recipients, SSA made 5,736 SSI
Themselves            suspensions, identified $1.1 million in SSI overpayments, and prevented
                      $1.3 million of future SSI overpayments between March 7, 1997, and
                      November 27, 1998.

                      In addition, SSA made 3,915 suspensions, identified $1.3 million in OASI/DI
                      overpayments it had already made, and prevented $2.2 million of
                      additional OASI/DI overpayments on the basis of beneficiary reports.




                      Page 20                                GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
Appendix III

Summary of SSI Suspensions by State and
Agreement Type


                                                                                SSI
                                                                     suspensions
                                                                       at facilities
                                 SSI suspensions at facilities with        without
                                      incentive agreements               incentive   Total SSI
Statea                               State       Local          Total agreements suspensions
Alabama                                162          397          559           71           630
Alaska                                 112            0          112            0           112
Arizona                                 54          520          574         119            693
Arkansas                               167          511          678           71           749
California                             888        6,762        7,650         497          8,147
Colorado                                34          210          244         133            377
Connecticut                            795            0          795            0           795
Delaware                               101            0          101            0           101
District of Columbia                    10            0           10            0            10
Florida                                413        1,605        2,018         865          2,883
Georgia                                220          601          821         158            979
Hawaii                                 184            0          184            0           184
Idaho                                   35           43           78           45           123
Illinois                               165          819          984         322          1,306
Indiana                                190          286          476         396            872
Iowa                                     0          165          165         201            366
Kansas                                   0          174          174         318            492
Kentucky                               123          989        1,112           91         1,203
Louisiana                              525        1,652        2,177           38         2,215
Maine                                   18          182          200           10           210
Maryland                                50          154          204           25           229
Massachusetts                          334        1,070        1,404           45         1,449
Michigan                               248        1,049        1,297         324          1,621
Minnesota                              133           63          196         256            452
Mississippi                             79          360          439         250            689
Missouri                                46          488          534         386            920
Montana                                  9           23           32           63            95
Nebraska                                 0           10           10           87            97
Nevada                                   0           19           19         144            163
New Hampshire                           27          163          190            1           191
New Jersey                             290        1,028        1,318           96         1,414
New Mexico                              51          153          204           60           264
New York                               456        3,473        3,929         447          4,376
North Carolina                         412          183          595         183            778
                                                                                     (continued)


                       Page 21               GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
                 Appendix III
                 Summary of SSI Suspensions by State and
                 Agreement Type




                                                                                           SSI
                                                                                suspensions
                                                                                  at facilities
                                            SSI suspensions at facilities with        without
                                                 incentive agreements               incentive   Total SSI
Statea                                          State       Local          Total agreements suspensions
North Dakota                                         10                9             19               6                25
Ohio                                                548          1,593           2,141             205               2,346
Oklahoma                                             88              90            178              49                227
Oregon                                               39              86            125              99                224
Pennsylvania                                           0         1,061           1,061           1,009               2,070
Puerto Rico                                            0               0              0               3                 3
Rhode Island                                        299                0           299                9               308
South Carolina                                      243             266            509              64                573
South Dakota                                         17              13              30               9                39
Tennessee                                            31             661            692              58                750
Texas                                             1,071          1,535           2,606             255               2,861
Utah                                                 34              13              47             16                 63
Vermont                                                0               0              0             69                 69
Virginia                                            175             492            667             111                778
Washington                                          139             204            343             112                455
West Virginia                                        14             100            114              63                177
Wisconsin                                           186             635            821             159                980
Wyoming                                                2               0              2             35                 37
           b
Unknown                                                0               0              0            283                283
Total                                             9,227         29,910          39,137           8,316           47,453

                 Note: The 5,736 suspensions due to self-reporting are not included.
                 a
                 Also included are Puerto Rico and the District of Columbia.
                 b
                  The information we had did not identify the location of the facility where the SSI recipient was
                 confined.




                 Page 22                                   GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
Appendix IV

Comments From the Social Security
Administration




(207033)      Page 23    GAO/HEHS-00-2 Impact of Prisoner Incentive Payments
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