oversight

The Results Act: Observations on the Social Security Administration's June 1997 Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-22.

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

                         United States
GAO                      General Accounting Office
                         Washington, D.C. 20548

                         Health, Education, and
                         Human Services Division

                         B-277406

                         July 22, 1997

                         The Honorable Richard K. Armey
                         Majority Leader
                         House of Representatives

                         The Honorable John R. Kasich
                         Chairman, Committee on the Budget
                         House of Representatives

                         The Honorable Dan Burton
                         Chairman, Committee on Government Reform
                           and Oversight
                         House of Representatives

                         The Honorable Bob Livingston
                         Chairman, Committee on Appropriations
                         House of Representatives

                         Subject: The Results Act: Observations on the Social Security
                         Administration’s June 1997 Draft Strategic Plan

                         On June 12, 1997, you asked us to review the draft strategic plans
                         submitted by the cabinet departments and selected major agencies to
                         facilitate the consultations between the Congress and the agencies
                         required by the Government Performance and Results Act of 1993 (the
                         Results Act). This letter provides our observations on the draft plan the
                         Social Security Administration (SSA) submitted to the Congress on June 30,
                         1997.


                         On the basis of guidance provided in your June 12, 1997, letter, we focused
Objectives, Scope,       our review of SSA’s June 30, 1997, draft strategic plan on
and Methodology
                     •   SSA’s compliance with the Results Act’s requirements and the draft plan’s
                         overall quality,
                     •   whether the draft plan reflects SSA’s key statutory responsibilities,
                     •   how well the draft plan identifies crosscutting functions and plans for
                         coordination with other departments and agencies,
                     •   the extent to which the plan addresses major SSA management challenges
                         we have identified in our reviews of SSA programs, and
                     •   SSA’s capacity to provide reliable information about its performance.




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             Our overall assessment of SSA’s draft strategic plan was generally based on
             our knowledge of SSA’s operations and programs, our numerous reviews of
             the agency, and other existing information available at the time of our
             assessment. Specifically, the criteria we used to determine whether SSA’s
             draft strategic plan complied with the requirements of the Results Act
             were the Results Act itself, supplemented by OMB’s guidance on developing
             the plans (OMB Circular A-11, part 2). To make judgments about the overall
             quality of the plan, we used our May 1997 guidance for congressional
             review of the plans.1 To determine whether the plan contained information
             on interagency coordination and addressed management problems we
             have previously identified, we relied on our general knowledge of SSA’s
             operations and programs and the results of our previous reports. In
             determining whether SSA’s draft strategic plan reflects the agency’s major
             statutory responsibilities, as you requested, we coordinated our review
             with the Congressional Research Service. To determine whether SSA had
             adequate systems in place to provide reliable information on performance,
             we reviewed the draft plan for Chief Financial Officer, Chief Information
             Officer, and financial management information. We also relied on the
             results of our previous reports. We performed our evaluation between
             July 1 and July 11, 1997. SSA officials provided comments on a draft of this
             correspondence, which are reflected in the Agency Comments section.

             It is important to recognize that under the act, agencies’ final plans are not
             due until September 30, 1997. Developing a strategic plan is a dynamic
             process, and SSA is continuing to revise the draft with input from OMB,
             congressional staff, and other stakeholders. Furthermore, in passing the
             Results Act, the Congress anticipated that several planning cycles might be
             needed to perfect the process of developing a strategic plan and that the
             plan would be continually refined. Thus, the following comments reflect
             our analysis of SSA’s first draft of its plan submitted to the Congress for
             consultation.



             SSA’sprograms touch the lives of nearly every individual in the nation. SSA
Background   administers three major federal programs. The Old Age and Survivors
             Insurance (OASI) and Disability Insurance (DI) programs, together
             commonly referred to as “Social Security,” provide benefits to retired and
             disabled workers and their dependents and survivors. The Supplemental
             Security Income (SSI) program provides means-tested assistance to the

             1
              Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review
             (GAO/GGD-10.1.16, May 1997).



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needy aged, blind, or disabled. The agency’s expenditures totaled $382
billion in fiscal year 1996, nearly one-fourth of the nation’s $1.6 trillion
federal budget. In 1996, 50 million beneficiaries—about one out of every
five individuals in this country—received benefits from SSA each month.
SSA serves the public through a nationwide network that includes 1,300
field offices, 132 hearings offices, and a national toll-free telephone
number.

To administer these programs, SSA must perform the following essential
tasks: issuing Social Security numbers to individuals, maintaining earnings
records for workers by collecting wage reports from employers, using
these records to determine the dollar amount of OASI and DI benefits, and
processing benefit claims for all three programs. SSA must also determine
applicants’ continuing eligibility, maintain the beneficiary rolls, provide
hearings and appeals for denied applicants, and disseminate information
about the programs it administers.

To enhance SSA’s ability to address critical policy issues and correct
programmatic weaknesses, the Congress enacted legislation making SSA
independent of the Department of Health and Human Services (HHS) as of
March 31, 1995. As we reported in February 1995, it was believed that, with
independence, SSA could achieve better program management, continuity
of leadership, and an organization more accountable to the public and
more responsive to the Congress.2

SSA faces dramatic challenges in the future. Some of these include the
long-range solvency of the Social Security trust funds, growing DI and SSI
caseloads, increased workloads and integration of new technologies to
process workloads and provide public service. All call for effective
leadership. We have identified and documented these challenges in
numerous reports, testimonies, and management reviews of SSA over the
last several years.

SSA has a history of strategic planning. Its original strategic plan was
published in 1988 and was significantly revised in 1991. SSA is revising its
plan—the first plan that SSA has prepared as an independent agency—to
reflect the requirements of the Results Act. Before finalizing the draft plan,
SSA is required to consult with the Congress and solicit and consider the
views and suggestions of other stakeholders potentially affected by or
interested in the plan.

2
Social Security Administration: Leadership Challenges Accompany Transition to an Independent
Agency (GAO/HEHS-95-59, Feb. 15, 1995).



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                   In 1994, the agency was selected by OMB for a total agency pilot for
                   implementation of the act’s performance planning and reporting provision.
                   The purpose of the pilot program was to help federal agencies gain
                   experience in using the key provisions of the act and provide lessons for
                   pilots and for other agencies before the act’s governmentwide
                   implementation later this year.


                   SSA  has prepared a draft strategic plan, reflecting its new status as an
Results in Brief   independent agency, that provides a solid foundation for its consultation
                   with the Congress and other stakeholders. Its draft plan is
                   forward-looking, reflects the agency’s key statutory responsibilities, and
                   contains the six components required by the act, although some of these
                   components could be strengthened in important ways. Moreover, the goals
                   it sets out are more balanced than past agency goals; SSA has added a goal
                   to emphasize sound program management as a complement to its existing
                   goal to provide world-class customer service. However, in some cases, the
                   goals could be strengthened by clarifying what SSA hopes to achieve and
                   how it plans to measure its achievement. Also, the success of several goals
                   is predicated on technological improvements or changes in agency
                   operational processes, such as SSA’s initiative to redesign its disability
                   claims process. SSA has historically encountered some difficulty
                   implementing some of these changes. The plan would be more realistic
                   and useful to the Congress and SSA if SSA addressed these difficulties. In
                   addition, the plan would benefit from SSA’s (1) more explicitly describing
                   how certain external factors, such as technology changes, may affect goal
                   attainment; (2) more clearly explaining how it has used and plans to use
                   program evaluations; and (3) including a discussion on how SSA has
                   coordinated with other agencies, such as HHS, that serve the same
                   beneficiaries.

                   SSA’s plan is structured to capture and monitor progress in meeting
                   agencywide priorities and, as such, does not focus on specific programs or
                   beneficiary groups. As a result, the plan offers little assurance that SSA will
                   place adequate attention on certain areas that pose the greatest
                   management challenges. Specifically, SSA’s draft plan does not
                   acknowledge the fact that its SSI program was recently placed on our high
                   risk list,3 nor does it provide a comprehensive strategy to address the
                   problems with SSI. SSA has recently agreed, however, that a comprehensive
                   strategy, including a complete set of measures, should be crafted for SSI. In

                   3
                    In 1990, we began a special effort to review and report on the federal program areas our work
                   identified as high risk because of vulnerabilities to waste, fraud, abuse, or mismanagement.



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                        addition, the plan does not disclose the challenges SSA has faced in
                        redesigning its disability process and does not fully integrate a
                        return-to-work strategy for its disabled beneficiaries throughout the
                        agency’s operations.

                        SSA’s draft plan does reflect the agency’s strong reliance on improved
                        information technology to provide world-class service and better manage
                        its programs with its current resources. However, the plan would be
                        strengthened by adding more detailed information on how SSA will use
                        information technology to achieve the agency’s goals and objectives. In
                        addition, the draft plan could discuss in more detail SSA’s plans to cope
                        with two technology-related high risk areas—the “year 2000” computer
                        problem, which stems from the common practice in automated systems of
                        abbreviating years by their last two digits, and the need to adequately
                        protect the sensitive data in its computer system. Both of these areas
                        represent significant future challenges for SSA. Finally, SSA has experience
                        in developing and reporting on performance measures, but the agency
                        recognizes the need to develop some new measures that better reflect its
                        progress in meeting its new goals.


                        SSA’s draft strategic plan includes all six elements required by the act and
Draft Plan Reflects     is SSA’s attempt to address past criticisms of its mission statement and
Required Elements of    general goals. The six elements are (1) a comprehensive mission
Results Act, but Some   statement, (2) general goals and objectives, (3) approaches to achieve
                        goals and objectives, (4) an explanation of the relationship between
Aspects Could Be        general goals/objectives and annual performance goals, (5) key external
Improved                factors beyond the agency’s control, and (6) how program evaluations
                        were used in drafting the general goals and plans for future evaluations.

                        These elements are necessary to provide a meaningful starting point and
                        foundation for SSA’s consultation with the Congress and stakeholders; SSA
                        has provided such a foundation. However, we found the quality of the
                        elements to be varied, and we offer the following observations for
                        information and consideration as the plan evolves.


Comprehensive Mission   According to OMB Circular A-11, the mission statement should be brief,
Statement               defining the basic purpose of the agency, with particular focus on its core
                        programs and activities. SSA’s draft plan contains a new mission statement:
                        “To promote the economic security of the nation’s people through
                        compassionate and vigilant leadership in shaping and managing America’s



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                    social security programs.” We found SSA’s mission statement to be
                    generally appropriate and reflective of its relatively new status as an
                    independent agency. For example, the statement focuses on leadership in
                    shaping and managing America’s social security system, and we have
                    identified leadership as critical to SSA’s success as an independent agency
                    in the next century.


General Goals and   OMB Circular A-11 specifies that strategic plans are to set forth long-term
Objectives          management goals as well as programmatic and policy goals. Plans are to
                    explain what results are expected and when to expect them.

                    SSA’s   draft plan contains the following five goals:

                    (1)to promote valued, strong, and responsive social security programs
                    through effective policy development and research;

                    (2)to deliver customer-responsive, world-class service;

                    (3)to make SSA program management the best in business, with zero
                    tolerance for fraud and abuse;

                    (4)to be an employer that values and invests in each employee; and

                    (5)to strengthen public understanding of the social security programs.

                    SSA’s strategic goals and objectives reflect a positive attempt to define
                    results that SSA expects from its major functions and operations. The goals
                    are based on the premise that SSA’s three programs rely on a common set
                    of services and business processes and thus appropriately represent
                    agencywide priorities, rather than program-specific concerns. Although
                    this crosscutting focus is an essential element of a departmental strategic
                    plan, a programmatic focus is also needed. Without it, SSA’s strategic plan
                    is not likely to focus sufficient attention on some of its greatest
                    management challenges. SSA’s plan should contain a more detailed
                    discussion of major management challenges and how the agency plans to
                    meet them. We will describe these challenges in greater detail later.
                    However, SSA could provide this more detailed attention to its major
                    management challenges through several alternative approaches. For
                    example, it could develop program-specific goals, include a program focus
                    in its objectives under its third management goal, or develop the
                    challenges further in its discussion of strategies to achieve goals.



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                           The draft plan’s first three goals are central to SSA’s functions, while the
                           other two play a more supportive role. Overall, the goals appear more
                           balanced than those in SSA’s previous plan and more recent planning
                           documents because they go beyond focusing on service delivery by
                           including an additional focus on effective program management.4 Most of
                           the goals are stated in a manner that allows for future assessment of their
                           achievement. However, SSA could improve the presentation of its goals if,
                           in three cases, it more clearly explained the results its hopes to achieve.
                           The following are our specific comments on these goals.

                       •   SSA’s  first goal recognizes that program leadership, as envisioned in the
                           mission statement, cannot be achieved without a strong policy and
                           research capability—the lack of which we have criticized SSA for in the
                           past.5 Yet, the goal itself and the supporting discussion are difficult to
                           understand. The results SSA expects and how it plans to measure them are
                           unclear. It appears that this goal is, in part, trying to address the issue of
                           long-term solvency of the trust funds, but this is not clearly articulated. In
                           addition, the goal is not stated in a manner that allows for future
                           assessment of its achievement. Greater clarity on the results SSA is aiming
                           to achieve would be beneficial.
                       •   In SSA’s second goal, the meaning of “world-class service” is not clear in
                           the draft plan. To help the reader fully understand the goal, SSA could
                           define what it means by world-class service.
                       •   It is unclear how the results of SSA’s fifth goal, “to strengthen public
                           understanding,” differ from those of the first goal. SSA has linked the
                           public’s lack of confidence in Social Security with a lack of understanding
                           about its programs. The fifth goal is designed to help the public gain a
                           greater understanding of Social Security, while the first goal aims to
                           promote programs that are valued and supported by the public. Also, the
                           discussions of the first and fifth goals both refer to finding solutions for
                           the issues facing Social Security and helping the nation’s leaders make
                           decisions.


How the Goals and          According to OMB Circular A-11, this element describes the means the
Objectives Are to Be       agency will use to achieve the general goals and objectives. SSA provides a
Achieved                   discussion of how it plans to achieve each goal. As required by the Results
                           Act, the draft plan describes certain operational processes, staff skills,

                           4
                            The goals in SSA’s fiscal year 1998-2002 Business Plan were to (1) rebuild public confidence,
                           (2) provide world-class service, and (3) provide a supportive environment for employees.
                           5
                             Social Security Administration: Significant Challenges Await New Commissioner (GAO/HEHS-97-53,
                           Feb. 20, 1997) and GAO/HEHS-95-59, Feb. 15, 1995.



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                                technologies, and human capital that SSA will need to achieve the goals.
                                Yet, for the most part, the plan simply describes the process or technology
                                and does not provide any details about timeframes and schedules. In
                                addition, the success of several of SSA’s goals and objectives is predicated
                                upon changes in agency operational processes or technology
                                improvements. SSA has experienced problems implementing some of these
                                changes, and this component would be more realistic if SSA addressed how
                                it plans to confront these problems. For example:

                            •   SSA asserts throughout the plan the importance of technology and the
                                implementation of the intelligent workstation/local area network (IWS/LAN)
                                and other key supporting software initiatives. Yet the full benefit of the
                                IWS/LAN has yet to be realized, and SSA has experienced problems with
                                software implementation, which is behind schedule.
                            •   SSA’s initiative to redesign its disability process is key to improving aspects
                                of customer service and program management (goals two and three).
                                However, in late 1996, we reported that the scope and complexity of SSA’s
                                redesign initiative had put at risk the likelihood of accomplishing the
                                project’s goals. Although SSA revised its redesign plan in February 1997, the
                                success of this scaled-down initiative remains uncertain, and some
                                stakeholders continue to question SSA’s approach. We will describe the
                                challenge of redesigning the disability program in greater detail later in
                                this letter.

                                SSA  also cites many initiatives that it will begin or continue over the next 5
                                years. It is difficult to determine which will occur first and which carry the
                                greatest priority. Setting priorities and delineating time frames would be
                                helpful, because it is difficult to see how SSA will accomplish all of these
                                initiatives, given its assumption of level funding and no growth in staffing
                                levels. Finally, while SSA states that it has developed an approach for
                                communicating the contents and concepts of the plan to employees, there
                                is no discussion of how managers and staff will be held accountable for
                                achieving objectives.


Relating Annual                 According to OMB Circular A-11, the strategic plan should briefly outline:
Performance                     (1) the type, nature, and scope of the performance goals to be included in
Goals/Measures to General       the agency’s performance plan; (2) the relation between the performance
                                goals and the general goals and objectives; and (3) the relevance and use
Goals                           of performance goals in helping determine the achievement of general
                                goals and objectives.




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                       Going beyond the requirement, SSA has provided numerous performance
                       measures to relate to its strategic goals and objectives. SSA also discusses
                       plans for developing new measures for certain objectives. However, it is
                       sometimes difficult to link the measures with the appropriate objective.
                       The second general goal, for example, has 6 objectives and 17
                       performance measures, and, in some cases, it is difficult to determine
                       which measures link to which objectives. It is also difficult to discern
                       which objectives do not yet have performance goals. It would be helpful to
                       have a matrix that details the general goals, objectives, and associated
                       performance measures so the reader could quickly link measures with
                       objectives.

                       In our review, we found that some of the performance measure data are
                       expressed in terms of SSA’s three programs individually, while others are
                       aggregated across the three programs. Aggregating the data, in some
                       cases, may not provide sufficient detail for SSA to monitor progress in
                       dealing with management problems. For example, an aggregated measure
                       of the percentage of debt collected may mask problems with debt
                       collections in specific programs, such as SSI, and weaken accountability
                       for program-level results.


Key External Factors   OMB  Circular A-11 notes that agencies’ achievement of their goals and
                       objectives can be affected by external factors that change or emerge
                       during the time period covered by their plans. The Circular states that
                       these factors can be economic, demographic, social, or environmental and
                       that the strategic plan should describe each possible factor, indicate its
                       link with a particular goal(s), and describe how it could affect
                       achievement of the goal.

                       SSA’sdraft plan describes several key external factors that may affect its
                       programs, such as the aging of the baby boom generation and advances in
                       information technology. In fact, while SSA expects only a small increase in
                       its workloads over the next 5 years, the agency explicitly recognizes that
                       the aging of the baby boomers will have a dramatic effect on its future
                       workloads, and, as a result, it must look beyond 5-year planning horizon.
                       However, despite its discussion of external factors, the plan would be
                       stronger if SSA more explicitly linked such external factors to its general
                       goals and stated how these factors could affect goal attainment and how
                       SSA will mitigate such effects. For example, SSA discusses changes in
                       technology that may permit more disabled individuals to rejoin the




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                       workforce, but it does not specifically link this external factor to its
                       objective (under the first goal) of helping people return to the work place.

                       In its discussion of external factors, SSA does not mention the changes to
                       Social Security that the Congress may make to ensure the program’s
                       financial stability. Congressional action on this and other program design
                       issues is likely to have a significant effect on how SSA operates in the
                       future. Although the substance and timing of future program changes are
                       not acknowledged as key external factors, SSA discusses its intent to
                       inform and shape the public debate and to support the executive and
                       legislative branches under the first goal.

                       Although not required to do so by the act, SSA also discussed key internal
                       factors that it believes will influence its work. This discussion includes the
                       aging of the SSA workforce and the loss of critical knowledge and
                       experience that is likely to occur over the next 5 years as senior staff retire
                       but does not provide explicit and detailed mitigation strategies.


Program Evaluation     OMB Circular A-11 states that agencies should describe the program
                       evaluations that were used in preparing the strategic plan and include a
                       schedule for future program evaluations. SSA generally discusses program
                       evaluation at the end of its draft plan; however, its broad treatment of the
                       topic might leave stakeholders confused as to how these tools have been
                       and will be used. SSA does not clearly describe the evaluations used to
                       prepare the plan and how they were used to establish or revise specific
                       goals and objectives. Moreover, although SSA mentions in several places
                       throughout the plan future studies and evaluations it hopes to complete,6 it
                       does not refer to these studies in its overall discussion on program
                       evaluations, offer a schedule for completing these evaluations, or discuss
                       the methodologies to be used and the scope of the evaluations.


                       SSA’sdraft plan generally reflects its key statutory responsibilities: title II
Key Statutory          of the Social Security Act, pertaining to the OASI and DI programs, and title
Responsibilities Are   XVI of the Social Security Act, pertaining to SSI. Major recent legislation
Reflected in Draft     affecting the agency includes the Social Security Independence and
                       Program Improvements Act of 1994, which established the Social Security
Plan                   Administration as an independent agency in the executive branch of the
                       government. SSA explicitly acknowledges its independent status in the plan

                       6
                        For example, under the first goal, SSA refers to its intent to test and evaluate return-to-work
                       alternatives, and, under the fifth goal, SSA states its plans to measure the impact of various efforts to
                       better inform the public about SSA’s programs.



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                            and, as we have discussed, reflects its new responsibilities as an
                            independent agency in its mission statement and its first strategic goal.


                            To the extent that SSA relies on the resources or activities of another
Crosscutting                agency to achieve its goals and objectives, SSA should describe this
Activities and              relationship. SSA is involved in a number of crosscutting issues for which
Stakeholder                 successful performance depends on actions by SSA and other agencies, yet
                            the draft plan is silent on these issues. We were therefore unable to
Involvement Not Fully       determine whether SSA has coordinated with these other agencies or
Discussed                   assessed potential overlap. For example:

                        •   Under the DI program, SSA is responsible not only for providing benefits,
                            but also for helping recipients move off the disability rolls by obtaining
                            employment. This responsibility overlaps with responsibilities of the
                            Departments of Labor (DOL) and Education. Yet, the draft plan does not
                            include any discussion of the relationships among these agencies or the
                            responsibilities they share.
                        •   In its draft plan, SSA notes that it will continue to provide services through
                            its state Disability Determination Services. Yet the plan is silent on how
                            SSA works with and obtains input from these offices.
                        •   The SSI program is clearly linked with Medicaid, a program administered
                            by the Health Care Financing Administration (HCFA) within HHS. Recipients
                            of SSI are, for the most part, also eligible for Medicaid. Any changes to the
                            SSI program will have a probable impact on Medicaid. However, this
                            critical link with HCFA is not mentioned.
                        •   SSA and other agencies have similar retirement-related responsibilities and
                            may serve the same populations. Generally, when individuals are eligible
                            for Social Security benefits, they are also eligible for Medicare coverage,
                            yet this important interrelationship is not discussed in the plan. In
                            addition, SSA is responsible for replacing a portion of income loss due to
                            retirement, yet private pensions often provide additional retirement
                            income. Within DOL, the Pension Welfare Benefits Administration and the
                            Pension Benefit Guaranty Corporation oversee private pensions and, in
                            some cases, provide benefits. The plan does not mention these agencies.




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                         By designing its strategic plan so that its goals and objectives cut across
Strategic Plan Does      the entire agency, SSA enables agency managers and the Congress to refer
Not Address Some of      to a small set of goals and objectives to monitor agencywide performance.
SSA’S Major              However, because these goals and objectives generally do not focus on
                         specific programs or problem areas, they offer little assurance that SSA will
Management               focus on those areas that pose the greatest management challenges.
Challenges
SSI Program Requires a   In early 1997, after years of reporting on problems with the SSI program,
Comprehensive Approach   we designated SSI as a high risk program because of its susceptibility to
                         waste, fraud, abuse, and insufficient management. Since the program
                         began in 1974, it has grown significantly in size and complexity. SSI poses a
                         special challenge for SSA because, unlike OASI and DI, it is a means-tested
                         program, and SSA must often rely on the applicant to provide key financial
                         information. Our previous and ongoing reviews have highlighted
                         long-standing problem areas, such as (1) determining initial and
                         continuing financial eligibility for beneficiaries, collecting SSI
                         overpayments, and addressing SSI program fraud and abuse;
                         (2) insufficient attention paid to the need to provide data, analysis, and
                         proposals to policymakers regarding whom the SSI program should assist
                         and how that assistance should be provided; and (3) inadequate
                         return-to-work assistance for recipients who could be assimilated back
                         into the workforce.7 In addition, we have demonstrated that the SSI
                         program has been adversely affected by internal control weaknesses,
                         complex policies, and insufficient management attention overall.8

                         SSA’sdraft plan does not acknowledge these serious problems with the SSI
                         program, nor does it lay out a comprehensive strategy to address the
                         problems, which would help achieve agency goals. Although certain
                         performance measures in SSA’s draft plan would track progress in the
                         long-standing problems areas we have identified, in some cases, the
                         measures are not disaggregated for the SSI program, and in others, the
                         measures are yet to be developed. On the basis of our ongoing work in this
                         area, we have determined that SSA is taking steps to address some of the
                         weaknesses in the SSI program. However, to help remove the SSI program
                         from our high risk list and achieve the goal of “best in business” program
                         management, SSA must develop a long-term, comprehensive strategy to
                         address the root causes of the problems and include specific measures to
                         evaluate its progress. The strategic planning process affords a valuable

                         7
                          See High Risk Series: An Overview (GAO/HR-97-1, Feb. 1997) and our ongoing work.
                         8
                         Supplemental Security Income: Long-Standing Problems Put Program at Risk for Fraud, Waste, and
                         Abuse (GAO/T-HEHS-97-88, Mar. 4, 1997).



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                          opportunity for SSA to take these steps and ensure that the SSI program
                          receives adequate long-term management attention. SSA officials have
                          recently agreed to develop a comprehensive strategy, including
                          performance measures, to monitor the agency’s progress in addressing
                          long-standing problems in the SSI program. At a minimum, the plan should
                          include a discussion of SSA’s plans to do so.


Success of Disability     Making disability decisions is one of SSA’s most demanding and
Process Redesign Is Key   administratively complex tasks, and SSA has struggled to keep up with
                          applications for disability benefits and appeals of disability decisions. SSA’s
                          disability caseloads for its DI and SSI programs have grown by nearly
                          70 percent in the past decade. Processing of claims has been delayed,
                          creating hardship for disabled claimants, who often wait more than a year
                          for a final decision. To manage the disability caseload growth, increase
                          efficiency, and improve service to its customers, SSA began a major effort
                          in 1993 to change how disability decisions are made. In December 1996,
                          we reported that SSA’s redesign plan might not accomplish all that SSA
                          hoped it would.9 We identified a number of implementation difficulties,
                          including schedule delays in testing and project development, expansion
                          of initiatives’ scope and complexity, turnover of executive leadership, and
                          uncertain stakeholder support. Responding to these concerns and those of
                          other stakeholders, SSA revised its redesign plan in February 1997.
                          However, it is not yet clear that this scaled-down initiative will achieve the
                          desired results, and some stakeholders have continued to criticize SSA’s
                          approach.

                          Successfully overhauling the disability process is key to achieving several
                          of SSA’s goals and objectives. Under its goal of providing world-class
                          service, SSA’s draft plan states that a successful redesign initiative is the
                          most important element for achieving its objectives related to timeliness of
                          service. Also, under its goal to improve program management, the plan
                          links the disability process redesign initiative with improvements in
                          payment accuracy. Despite the importance of the success of this initiative
                          to goal attainment, SSA’s draft plan does not acknowledge the problems SSA
                          has encountered in implementing the initiative, nor does the plan discuss
                          SSA’s renewed efforts to ensure the success of the initiative.




                          9
                           SSA Disability Redesign: Focus Needed on Initiatives Most Crucial to Reducing Costs and Time
                          (GAO/HEHS-97-20, Dec. 20, 1996).



                          Page 13                                          GAO/HEHS-97-179R SSA’s Draft Strategic Plan
                            B-277406




Emphasis on Return to       Each week, SSA pays more than $1 billion in cash benefits to people with
Work Not Fully Integrated   disabilities who receive DI and SSI, yet despite advances in medical
Into Draft Plan             technology that have opened new opportunities for people with disabilities
                            to work, not more than 1 in 500 DI beneficiaries, and few SSI beneficiaries,
                            have left the rolls to return to work. The Social Security Act states that, to
                            the maximum extent possible, individuals applying for disability benefits
                            should be rehabilitated to productive activity. In addition, recent societal
                            and legislative changes have shifted to support the economic
                            self-sufficiency goals of people with disabilities and their right to full
                            participation in society. We have reported that, although faced with
                            constraints, SSA could create opportunities to help and encourage more of
                            SSA’s beneficiaries to return to work.10 If even 1 percent of the 6.6 million
                            working-age SSI and DI beneficiaries were to leave SSA’s disability rolls by
                            returning to work, lifetime cash benefits would be reduced by an
                            estimated $3 billion.11

                            As the plan is currently written, SSA places an emphasis on return to work
                            only as it relates to planned research initiatives. A return-to-work initiative
                            would be more likely to succeed and receive the proper attention if it were
                            strategically integrated throughout the plan. As with the SSI program, SSA
                            has begun some new operational initiatives to help people work, but the
                            agency has not highlighted these measures in the plan and has no
                            comprehensive strategy to ensure that the return-to-work agenda is
                            supported throughout the agency. At a minimum, we would expect SSA to
                            add a more complete set of return-to-work performance measures and a
                            more explicit discussion of planned program evaluations in this area.


Success Depends on Use      SSA’s draft plan reflects the agency’s strong reliance on improved
of Information Technology   information technology to support its administrative processes and enable
                            its workforce to provide world-class services cost-effectively. Recent
                            legislation designed to reform information technology management,
                            including the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act
                            of 1996, set forth requirements that promote more efficient and effective
                            use of information technology in support of agencies’ missions and
                            improved program performance. Under these information technology
                            reform laws, agencies are to (1) tighten controls over technology


                            10
                               Social Security: Disability Programs Lag in Promoting Return to Work (GAO/HEHS-97-46, Mar. 17,
                            1997).
                            11
                              Our estimate is based on fiscal year 1995 data provided by SSA’s actuarial staff and represents the
                            discounted present value of the cash benefits that would have been paid over a lifetime if the
                            individual had not left the disability rolls by returning to work.



                            Page 14                                             GAO/HEHS-97-179R SSA’s Draft Strategic Plan
                           B-277406




                           spending, (2) better link their technology plans and information
                           technology use to their programs’ missions and goals, and (3) establish
                           performance measures to gauge how well their information technology
                           supports their program efforts. SSA’s draft plan demonstrates an awareness
                           of most of these principles, but it could be improved by providing
                           additional information on how information technology strategies will be
                           used to achieve the agency’s goals and objectives.

                           In its plan, SSA acknowledges that its strategic goals are essentially
                           unachievable unless the agency invests wisely in supporting information
                           technology and refers to the agency’s process for reviewing major
                           investments of information technology funds. However, we have
                           expressed concerns relating to SSA’s systems modernization approach,
                           including the need for SSA to better manage its investments in its
                           modernized information systems and to link its modernization with its
                           business strategy.12 In this context, the plan could benefit from a more
                           detailed discussion of its investment review principles, how these
                           principles are incorporated into SSA’s planning and budgeting systems, and
                           how SSA intends to prioritize information technology projects to reflect the
                           agency’s overall goals and priorities. In addition, as SSA develops its annual
                           performance plan, it should more explicitly link its technology advances
                           with operational goal achievement. For example, in its draft strategic plan,
                           SSA frequently cites the IWS/LAN modernization effort as a major vehicle for
                           achieving its strategic goals.


Other Technology-Related   As rapid changes in technology provide SSA with new ways to conduct its
Changes Pose Challenges    business, SSA faces difficult choices about how to balance its goal of
                           providing the best possible service to its customers with its responsibility
                           to provide services in the most cost-effective manner available. We have
                           reported that, given the significant changes facing SSA, it has not
                           adequately considered whether its current service delivery structure is
                           really what is needed for the future.13 We have also recommended that SSA
                           develop and implement a plan for reducing the number of call centers for
                           its 800-number service to save money and enhance service.14 Customers
                           are increasingly expressing a preference for using the telephone to
                           conduct business, and SSA acknowledges in its plan that nontraditional

                           12
                            Social Security Administration: Risks Associated With Information Technology Investment Continue
                           (GAO/AIMD-94-143, Sept. 19, 1994).
                           13
                             GAO/HEHS-97-53, Feb. 20, 1997.
                           14
                            Social Security Administration: More Cost-Effective Approaches Exist to Further Improve
                           800-Number Service (GAO/HEHS-97-79, June 11, 1997).



                           Page 15                                          GAO/HEHS-97-179R SSA’s Draft Strategic Plan
B-277406




methods of access to SSA services are likely to increase in popularity.
Moreover, in its draft plan, SSA emphasizes its intent to balance service
with cost. Yet SSA does not include any plans to reassess its existing
service delivery structure, including its network of field offices and
teleservice centers. Reassessing its service delivery structure will include
sensitive decisions that may have negative impacts on communities and
certain SSA staff and will require input from a number of stakeholders,
including unions, employee groups, and the Congress. To accomplish this
reassessment, SSA will need to begin work on a more comprehensive plan
for restructuring how it does business to cost-effectively meet changing
customer preferences with improved technologies.

We have identified as high risk two technology-related areas that represent
significant challenges for SSA. The first, the “year 2000 problem,” stems
from the common practice in automated systems of abbreviating years by
their last two digits. Thus, miscalculations in all kinds of activities—such
as benefit payments—could occur at the turn of the century because the
computer system would interpret 00 as 1900 instead of the year 2000.
Unless SSA converts its software before the new century, it could
encounter major service disruptions, including erroneous payments or
failure to process benefits. SSA officials have previously reported that the
amount of resources dedicated to the year 2000 efforts could affect staff
availability to tackle new systems development work,15 but SSA’s plan does
not address this year 2000 problem.

The other high risk area relates to information security, or the need to
adequately protect the sensitive data in federal computer systems. Earlier
this year, SSA began making personal earnings and benefits statements
available through the Internet; after a public outcry over concerns about
the privacy of this sensitive personal information, SSA suspended on-line
access to the statements.16 SSA has plans for other similar initiatives to
make greater use of technology over the next few years. In its draft plan,
SSA refers to a new strategy that the agency is developing to deal with
security in the information age. However, the plan would benefit from a
more detailed discussion of this strategy and the steps the agency will take
to identify and resolve any significant information security issues.




15
  GAO/HEHS-97-53, Feb. 20, 1997.
16
 Social Security Administration: Internet Access to Personal Earnings and Benefits Information
(GAO/T-AIMD/HEHS-97-123, May 6, 1997).



Page 16                                           GAO/HEHS-97-179R SSA’s Draft Strategic Plan
                       B-277406




                       Although SSA is ahead of many agencies in this area, it still faces challenges
SSA Has a History of   in measuring performance. SSA has developed and utilized performance
Reporting on           measures for several years. SSA described performance measures in the
Performance but Will   agency’s 1991 strategic plan, and SSA also developed measures when it was
                       a Results Act pilot agency. More recently, SSA has disclosed many of its
Be Challenged to       measures in its Annual Financial Statement Report and in its
Develop New            Accountability Report. SSA has regularly produced auditable financial
                       statements as required by the Chief Financial Officer’s Act of 1990 and the
Measures               Government Management Reform Act of 1994, and the audits of these
                       statements provide at least limited assurance of the reliability of SSA’s
                       performance measurement data.17

                       SSA will be challenged, however, to gather useful data to track progress in
                       some areas. For example, SSA plans to increase debt collections under its
                       goal of making SSA program management the “best in business,” with zero
                       tolerance for fraud and abuse. However, since fiscal year 1991, SSA has
                       reported its SSI, debt management system as a material weakness under
                       the Federal Managers’ Financial Integrity Act because it cannot identify
                       overpayment amounts or collections related to those overpayments. As a
                       result, SSA has developed a manual system to track overpayments and
                       related collections, but manual systems can be less reliable and more
                       prone to problems. In the absence of system improvements or
                       enhancements, SSA may need to develop additional manual processes to
                       gather reliable data needed for performance measures.

                       In addition to using existing measures, SSA also has laid out ambitious
                       plans to develop new and, in some cases, more results-oriented
                       performance measures. For each strategic goal in SSA’s draft plan, SSA has
                       identified a need for new performance measures. Identifying the data
                       needed to measure performance and collecting reliable data to support
                       these new measures could prove challenging. For example, SSA plans to
                       establish a method for determining access and service accuracy rates for
                       telephone calls to local offices. Adding this measure to SSA’s collection of
                       customer service information would be helpful, but the necessary data will
                       be especially difficult to collect—only 830 of SSA’s 1,300 field offices have
                       published telephone numbers, and these offices are served by many
                       different telephone companies; thus it will be difficult to obtain
                       comparable automated data across the country. In addition, SSA plans to

                       17
                         SSA has been a leader among federal agencies in producing timely financial statements. For example,
                       for fiscal years 1995 and 1996, SSA issued audited financial statements 3 months early. Moreover, SSA
                       was among the first federal agencies to produce an Accountability Report, which is designed to
                       consolidate current reporting requirements and provide a comprehensive picture of an agency’s
                       program performance and its financial condition.



                       Page 17                                           GAO/HEHS-97-179R SSA’s Draft Strategic Plan
                  B-277406




                  create a new measure of the percentage of individuals who are
                  knowledgeable about Social Security programs. To accomplish this, SSA
                  plans a multistep process to define what “knowledgeable” means in each
                  area, design and administer a testing instrument, develop a baseline level
                  of knowledge, and periodically administer the test to representative
                  samples of the public.


                  In commenting on this correspondence, SSA stated that we accurately
Agency Comments   depicted its history of strategic planning and that it will consider our
                  correspondence as it continues to work on its plan. However, SSA
                  disagreed with our view that the plan should include additional
                  information to clarify how the agency will meet its strategic goals.
                  Although SSA believes this information should be included in the agency’s
                  management plans rather than in its strategic plan, our comments on the
                  required elements of a strategic plan are based upon OMB’s instructions in
                  its Circular A-11. The changes we suggest would more effectively
                  communicate the agency’s plans to the Congress and the public. In
                  addition, SSA must give adequate attention to the management challenges
                  we have identified if it is to achieve its goals of world-class service and
                  best-in-business program management. While SSA states that performance
                  measures for the SSI program will be thoroughly examined, we continue to
                  believe that a long-term, comprehensive strategy to address the root
                  causes of the program’s problems is needed. SSA’s comments appear in
                  enclosure I.


                  As arranged with your offices, unless you publicly announce its contents
                  earlier, we plan no further distribution of this letter until 30 days from its
                  issue date. At that time, we will send copies of this letter to the Minority
                  Leader of the House of Representatives; Ranking Minority Members of
                  your Committees; the Chairmen and Ranking Minority Members of other
                  committees that have jurisdiction over SSA activities; the Acting
                  Commissioner of SSA; and the Director, Office of Management and Budget.
                  Copies will be made available to others on request.




                  Page 18                                GAO/HEHS-97-179R SSA’s Draft Strategic Plan
B-277406




Please contact me at (202) 512-7215 or Kay E. Brown, Assistant Director,
at (202) 512-3674 if you or your staff have any questions concerning this
letter. Major contributors to this letter are listed in enclosure II.




Jane L. Ross
Director, Income Security Issues




Page 19                              GAO/HEHS-97-179R SSA’s Draft Strategic Plan
Enclosure I

Comments From the Social Security
Administration




              Page 20       GAO/HEHS-97-179R SSA’s Draft Strategic Plan
Enclosure II

Major Contributors to This Letter


               Barbara D. Bovbjerg, Associate Director
               Valerie A. Rogers, Senior Evaluator
               George Bogart, Senior Attorney
               Valerie C. Melvin, Assistant Director
               Debra B. Sebastian, Senior Auditor
               Vernette G. Shaw, Evaluator




               Page 21                             GAO/HEHS-97-179R SSA’s Draft Strategic Plan
Page 22   GAO/HEHS-97-179R SSA’s Draft Strategic Plan
Page 23   GAO/HEHS-97-179R SSA’s Draft Strategic Plan
Related GAO Products


              Social Security: Disability Programs Lag in Promoting Return to Work
              (GAO/HEHS-97-46, Mar. 17, 1997).

              High Risk Series: An Overview (GAO/HR-97-2, Feb. 1997).

              Social Security Administration: Significant Challenges Await New
              Commissioner (GAO/HEHS-97-53, Feb. 20, 1997).

              SSADisability Redesign: Focus Needed on Initiatives Most Crucial to
              Reducing Costs and Time (GAO/HEHS-97-20, Dec. 20, 1996).

              Social Security Disability: Alternatives Would Boost Cost-Effectiveness of
              Continuing Disability Reviews (GAO/HEHS-97-2, Oct. 16, 1996).

              Supplemental Security Income: SSA Efforts Fall Short in Correcting
              Erroneous Payments to Prisoners (GAO/HEHS-96-152, Aug. 30, 1996).

              Supplemental Security Income: Administrative and Program Savings
              Possible by Directly Accessing State Data (GAO/HEHS-96-163, Aug. 29, 1996).

              SSADisability: Program Redesign Necessary to Encourage Return to Work
              (GAO/HEHS-96-62, Apr. 24, 1996).

              Supplemental Security Income: Disability Program Vulnerable to Applicant
              Fraud When Middlemen Are Used (GAO/HEHS-95-116, Aug. 31, 1995).

              Social Security Administration: Leadership Challenges Accompany
              Transition to an Independent Agency (GAO/HEHS-95-59, Feb. 15, 1995).

              Social Security Administration: Risks Associated With Information
              Technology Investment Continue (GAO/AIMD-94-143, Sept. 19, 1994).

              Social Security: Sustained Effort Needed to Improve Management and
              Prepare for the Future (GAO/HRD-94-22, Oct. 27, 1993).




(207008)      Page 24                               GAO/HEHS-97-179R SSA’s Draft Strategic Plan
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