Income Security Issues Issue Area Plan--Fiscal Years 1997 and 1998

Published by the Government Accountability Office on 1997-04-01.

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

               United States General Accounting Office

GAO            Health, Education, and Human Services

April 1997

               Income Security

               Issue Area Plan
               for Fiscal Years
               1997 and 1998


               As the investigative arm of the Congress and the nation’s auditor, the
               General Accounting Office is charged with following the federal dollar
               wherever it goes. Reflecting stringent standards of objectivity and
               independence, GAO’s audits, evaluations, and investigations promote a
               more efficient and cost-effective government; expose fraud, waste, abuse,
               and mismanagement in federal programs; help the Congress target budget
               reductions; assess financial and information management; and alert the
               Congress to developing trends that may have significant fiscal or
               budgetary consequences. In fulfilling its responsibilities, GAO performs
               original research and uses hundreds of databases, or creates its own when
               information is unavailable elsewhere. To ensure that GAO’s resources are
               directed toward the most important issues facing the Congress, each of
               GAO’s 32 issue areas develops a strategic plan that describes the
               significance of the issues it addresses, its objectives, and the focus of its
               work. Each issue area relies heavily on input from congressional
               committees, agency officials, and subject-matter experts in developing its
               strategic plan. Income Security Issues focus on programs and policies at
               the Social Security Administration (SSA), all non-health programs and
               policies at the Department of Health and Human Services (HHS), and
               pension programs and policies at the Department of Labor (DOL).
               Together, these programs account for nearly 40 percent of all federal
               spending. Millions of Americans rely on income security programs for
               financial support. However, concerns about the high costs and rising
               caseloads of the nation’s two largest welfare programs—Aid to Families
               With Dependent Children and Supplemental Security Income—led to
               major legislative changes in these programs in 1996. Moreover, the nation’s
               Social Security and disability programs face continued financial pressures
               and are the subject of current public debate about their purpose and
               structure. On the pages that follow, we outline Income Security’s most
               significant planned work in the following pivotal areas:

           •   ensuring that public funds for income security programs are spent
               efficiently and protected from fraud and abuse;
           •   improving SSA’s service to the public at reduced cost;
           •   evaluating the adequacy of Social Security, and public and private pension
               systems for future retirees;
           •   redesigning the nation’s disability programs to ensure the validity of the
               determination process and encourage work;
           •   monitoring implementation of the 1996 welfare legislation; and
           •   assessing government efforts to protect children’s welfare.

               Page 1                                                           GAO/IAP-97-8

Because events may significantly affect even the best of plans and because
periodic measurement of success against any plan is essential, our
planning process allows for updating the plan and responding quickly to
emerging issues. If you have any questions or suggestions about this plan,
please call me, or Diana Eisenstat or Mark Nadel, Associate Directors, at
(202) 512-7215.

Jane L. Ross
Income Security Issues

Page 2                                                         GAO/IAP-97-8

Table I: Key Issues
Table II: Planned
Major Work
Table III: GAO

                      Page 3   GAO/IAP-97-8
Table I: Key Issues

Issue                                       Significance
Promoting efficiency, cost-effectiveness:   Concerned about waste, abuse, and mismanagement in the Supplemental Security
How adequate are efforts to ensure that     Income (SSI) program, GAO designated SSI as a high-risk program area in 1997. GAO
funds for income security programs are      has also identified weaknesses in SSA’s efforts to ensure the integrity of Social Security
efficiently spent?                          programs. In addition, because of recent changes in the nation’s welfare system,
                                            accountability for more than $16.4 billion in block grants under the Personal
                                            Responsibility and Work Opportunity Reconciliation Act of 1996 will become an
                                            increasingly important issue. The agencies involved also need to ensure that they identify
                                            and pursue less expensive ways to provide services, such as through contracting out
                                            and privatization.

Improving SSA service and operations:       SSA administers retirement, survivor, disability, and welfare programs that annually
How can SSA improve service to the public   provide over $367 billion in benefits to about 50 million recipients. The agency is
with fewer resources?                       grappling with difficult policy and program challenges, and at the same time it needs to
                                            meet customer expectations in the face of growing workloads and reduced resources.
                                            SSA expects to redesign inefficient work processes and modernize its information
                                            systems to increase productivity, knowing that its customer service will deteriorate to
                                            unacceptable levels if it continues to conduct business as in the past. SSA will also need
                                            to effectively manage its workforce and consider what service delivery structure will work
                                            best in the future.

Ensuring adequate retirement benefits:      The prospective retirement of the “baby boom” generation raises questions about the
Can Social Security and pensions ensure     ability of Social Security, federal, state, and local government employee pension plans,
adequate retirement income as the           and private pension systems to provide all promised retirement benefits. As baby
population ages?                            boomers retire and live longer, Social Security program expenditures are expected to
                                            exceed tax income beginning in 2012. Experts project that the Social Security trust funds
                                            will be depleted by 2029, leaving insufficient funds to pay all expected benefits. The
                                            Advisory Council on Social Security has recently put forth three different proposals to
                                            ensure long-term solvency. These proposals are likely to be hotly debated over the next
                                            few years. In addition to questioning the adequacy of funding for Social Security benefits,
                                            many are concerned with the effectiveness of some pension plan regulations and with
                                            recent changes in plan characteristics.

                                            Page 4                                                                        GAO/IAP-97-8
                                               Table I: Key Issues

Objectives                                                    Focus of work
1. Identify waste, abuse, mismanagement, and internal         —Evaluate SSA efforts to ensure integrity of SSI program.
control problems in SSI and welfare programs.                 —Identify potential improvements to SSA’s overpayment collection
2. Assess how well SSA controls its payments to               —Identify means to improve initial and continuing eligibility decisions.
recipients.                                                   —Examine SSA’s controls over payments to benefit recipients.
                                                              —Evaluate HHS’ implementation of its welfare reform responsibilities.
3. Identify opportunities to manage welfare, disability,      —Examine efficiency of alternative means of delivering welfare and other
Social Security, and child support programs more              social services.
effectively and at lower costs.                               —Identify effective child support enforcement practices.

1. Assess SSA’s efforts to improve agency performance.        —Assess steps SSA has taken to improve performance under the
                                                              Government Performance and Results Act.
2. Provide information to the Congress on SSA’s efforts       —Evaluate SSA’s reengineering implementation efforts.
to reengineer its disability claims process.                  —Examine SSA’s efforts to identify customer needs and develop
                                                              cost-effective approaches to meeting its service delivery challenges.
3. Assess how effectively SSA balances serving the            —Monitor SSA’s efforts to modernize its information systems and
public and managing its limited resources.                    technology.

4. Assess SSA’s systems modernization efforts.

1. Study proposed solutions to Social Security’s long-        —Examine options for addressing Social Security’s funding problems.
term funding problems.                                        —Evaluate characteristics of 401(k) pension plans.
                                                              —Examine the effectiveness of selected pension regulations.
2. Determine the effectiveness of 401(k) plans in
providing retirement income.

3. Assess the effectiveness of private pension


                                               Page 5                                                                      GAO/IAP-97-8
                                            Table I: Key Issues

Issue                                       Significance
Redesigning disability programs:            The Disability Insurance (DI) and SSI programs have faced significant increases in both
How can these programs best ensure the      caseloads and expenditures. In 1995, almost 7.5 million individuals received these cash
validity of the determination process and   benefits at a cost of $57 billion. SSA reports that fewer than 1 out of every 500
encourage work?                             beneficiaries on the disability rolls ever returns to work. However, promising disability
                                            management progress in the private sector and recent medical, technological, social,
                                            and legal changes suggest that more people with disabilities can work. In addition, new
                                            ways to assess the ability of applicants to function in the work place could improve the
                                            validity of the determination process. Significant legislative and programmatic changes
                                            would be necessary for SSA to assist beneficiaries to develop their return-to-work
Promoting responsibility and work:          The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ended the
What progress is being made in              entitlement to assistance under the Aid to Families With Dependent Children program
implementing the 1996 welfare               and replaced it with capped block grants to the states for temporary assistance for
legislation?                                needy families. The act gives states broad discretion over program design, but
                                            conditions individual benefit receipt on participation in work or work-related activity and
                                            imposes a 5-year lifetime limit on benefits. The act also sets out personal responsibility
                                            goals, including enhancing child support enforcement, reducing out-of-wedlock births,
                                            and strengthening families; and restricts children’s and immigrants’ eligibility for SSI
                                            benefits. The implementation of these changes will need to be studied to determine their
                                            effects on families, children, and welfare caseloads and to ensure that they meet
                                            congressional intent.

Protecting children’s welfare:              Dramatic increases in child abuse and neglect, and the resulting increases in foster care
How adequate are government efforts to      caseloads, have stressed the entire child welfare system to the breaking point. At the
protect vulnerable children?                same time, families increasingly enter the system with complex social problems that are
                                            difficult to rectify, such as poverty, substance abuse, and domestic violence. All levels of
                                            government will face challenges in the years ahead as they attempt jointly to increase
                                            positive outcomes for abused and neglected children within greater budgetary
                                            constraints and while overhauling welfare programs.

                                            Page 6                                                                         GAO/IAP-97-8
                                                Table I: Key Issues

Objectives                                                     Focus of work
1. Identify better ways to promote the productive              —Examine alternative ways to meet the needs of children with disabilities.
capacity of disabled beneficiaries.                            —Study factors that help disabled beneficiaries work.
                                                               —Assess alternative ways to improve return-to-work outcomes.
2. Monitor SSA’s efforts to manage disability                  —Assess SSA’s progress in conducting continuing disability reviews.
caseloads.                                                     —Examine alternative means of making disability determinations.
                                                               —Monitor quality assurance changes under SSA’s redesign.

1. Report on implementation and early results of the           —Monitor implementation of the new temporary assistance for needy
block grants for temporary assistance for needy families       families block grant requirements, including state approaches and issues,
in moving families from welfare to work and in reducing        funding levels and allocations, and program outcomes.
welfare dependence.                                            —Evaluate the adequacy of state and county information management
                                                               systems and data for evaluation and program management.
2. Assess progress toward meeting other personal               —Evaluate child care needs of families under temporary assistance for
responsibility goals of the act.                               needy families block grants and the availability of child care for
                                                               low-income workers.
3. Evaluate effects of welfare reform on select SSI            —Review implementation of child support changes.
populations.                                                   —Monitor implementation of welfare reform changes on SSI program

1. Assess the impact on child welfare of the 1996              —Identify the impact of recent reforms on foster care and other child
overhaul of the welfare system.                                welfare programs’ funding and caseload size.
                                                               —Evaluate efforts to better manage children’s length of stay in foster care.
2. Examine innovative service delivery approaches to           —Evaluate efforts to privatize foster care services.
child welfare services.                                        —Examine the expanded role of kinship care.
                                                               —Examine the implications of foster care policies and practices for cases
3. Examine options for caring for abused and neglected         involving parental drug abuse.
children who have been removed from their homes.

                                                Page 7                                                                        GAO/IAP-97-8
Table II: Planned Major Work

Issue                                       Planned major job starts
Promoting efficiency, cost-effectiveness    •SSA’s management oversight of the SSI program
                                            •Effectiveness of reducing SSI benefits when living arrangements change
                                            •Effectiveness of SSA’s fraud referral process for the SSI program
                                            •Preventing SSI overpayments
                                            •SSA’s use of waivers, suspensions, and penalties for overpayments
                                            •SSA’s acquisition of payment control and eligibility data
                                            •Extent of controls over Social Security pension offsets
                                            •Adequacy of SSA’s quality assurance program for detecting and correcting errors
                                            •Effectiveness of offsetting disability benefits for workers’ compensation
                                            •Making the Social Security card tamper-resistant
                                            •States’ compliance with requirements under the Temporary Assistance for Needy
                                            Families block grant
                                            •HHS’ implementation of its responsibilities under welfare reform
                                            •Means-tested program benefits paid to nonqualified aliens
                                            •Privatization of social services
Improving SSA service and operations        •SSA’s efforts to improve agency performance and address major challenges
                                            •SSA’s progress in reengineering its disability claims process
                                            •Opportunities for privatizing SSA services and operations
                                            •Accuracy of benefit amount calculations
                                            •SSA’s efforts to modernize technology (will be done by Accounting and Information
                                            Management Division)
Ensuring adequate retirement benefits       •Examine options for Social Security financing reform
                                            •Women and pensions: lessons for Social Security reform
                                            •Examine the impacts of raising the Social Security retirement age
                                            •Comparing rates of return on Social Security contributions with equity investments
                                            •Experience with Social Security privatization in other countries
                                            •Effect of 10-percent rule on 401(k) plan investments
                                            •Mechanisms for protecting 401(k) plan participants when employers make investment
                                            •Effects of investor education programs on employee investment behavior
                                            •Exemption of state and local pension plans from nondiscrimination testing
                                            •Options to enhance pension portability
Redesigning disability programs             •Alternatives for assisting disabled children on SSI
                                            •Factors affecting beneficiaries’ decisions to work
                                            •Financial and medical incentives to return to work
                                            •SSA’s strategy for, and progress in, conducting continuing disability reviews
                                            •Status of conducting mandated continuing disability reviews for SSI recipients
                                            •Progress in improving disability determination methodology
                                            •Differences in eligibility and benefits determination between SSI and other
                                            means-tested programs, and in the treatment of adults and children on SSI
                                            •Assess SSA’s efforts to improve quality assurance under disability redesign

                                           Page 8                                                                      GAO/IAP-97-8
                                    Table II: Planned Major Work

Issue                                Planned major job starts
Promoting responsibility and work    •Effect of work participation standards and state strategies for moving welfare
                                     recipients into employment
                                     •State policies regarding eligibility of immigrants and effects of benefit cutoffs
                                     •Benefit terminations follow-up
                                     •Assess state progress and federal assistance in developing information technology
                                     needed to implement welfare programs (will be done by Accounting and Information
                                     Management Division)
                                     •Impact of state welfare policies on child care
                                     •Implications of time-limited welfare for child support enforcement programs
                                     •Effects of SSI changes on children, immigrants, drug addicts and alcoholics, and
Protecting children’s welfare        •Implications of welfare reform on funding for foster care and related services
                                     •Extent and effectiveness of concurrent permanency planning for children entering the
                                     foster care system
                                     •Opportunities to improve the relationship between child welfare agencies and the
                                     judicial system
                                     •Extent, effect, and outcomes of privatization of foster care and other child welfare
                                     •Expanded role of kinship care
                                     •Effects of parental drug abuse on foster care caseloads and policies

                                    Page 9                                                                    GAO/IAP-97-8
Table III: GAO Contacts

Director              Jane L. Ross           (202) 512-7215

Associate Directors   Diana S. Eisenstat     (202) 512-7215
                      Mark V. Nadel          (202) 512-7215

Assistant Directors   Cynthia Bascetta
                      David Bixler
                      Kay Brown
                      Gale Harris
                      Roland Miller
                      Frank Mulvey
                      Michael Packard
                      James Wright
                      Fred Yohey

                      Clarita Mrena (San Francisco Office)

                      Page 10                                 GAO/IAP-97-8
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