oversight

Major Management Challenges and Program Risks: Social Security Administration

Published by the Government Accountability Office on 1999-01-01.

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

                United States General Accounting Office

GAO             Performance and Accountability
                Series




January 1999
                Major Management
                Challenges and Program
                Risks
                Social Security
                Administration




GAO/OCG-99-20
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States



      January 1999
      The President of the Senate
      The Speaker of the House of Representatives

      This report addresses the major performance and
      management challenges that have limited the
      effectiveness of the Social Security Administration (SSA).
      It also addresses corrective actions that SSA has taken or
      initiated on these challenges and further actions that are
      needed.

      SSA has made progress on a number of fronts, most
      notably on the overarching issue of playing a stronger
      leadership role in the policy debate regarding Social
      Security’s solvency. The agency has recently
      strengthened its capacity for carrying out needed policy
      analysis, evaluation, and research. SSA has also taken
      actions to address challenges related to the Year 2000
      computing crisis. Yet further steps are necessary to meet
      the serious management challenges it still faces. Of most
      importance, the agency must address long-standing
      problems in the Supplemental Security Income (SSI)
      program, which remains on GAO’s high-risk list. Although
      SSA has recently developed detailed goals for improving
      the management of SSI, the agency must take actions to
      address the root causes of its management and
      performance weaknesses and ensure sustained
      management oversight and attention.
This report is part of a special series entitled the
Performance and Accountability Series: Major
Management Challenges and Program Risks. The series
contains separate reports on 20 agencies—one on each of
the cabinet departments and on most major independent
agencies as well as the U.S. Postal Service. The series
also includes a governmentwide report that draws from
the agency-specific reports to identify the performance
and management challenges requiring attention across
the federal government. As a companion volume to this
series, GAO is issuing an update to those government
operations and programs that its work has identified as
“high risk” because of their greater vulnerabilities to
waste, fraud, abuse, and mismanagement. High-risk
government operations are also identified and discussed
in detail in the appropriate performance and
accountability series agency reports.

The performance and accountability series was done at
the request of the Majority Leader of the House of
Representatives, Dick Armey; the Chairman of the House
Government Reform Committee, Dan Burton; the
Chairman of the House Budget Committee, John Kasich;
the Chairman of the Senate Committee on Governmental
Affairs, Fred Thompson; the Chairman of the Senate
Budget Committee, Pete Domenici; and Senator Larry
Craig. The series was subsequently cosponsored by the
Ranking Minority Member of the House Government
Reform Committee, Henry A. Waxman; the Ranking
Minority Member, Subcommittee on Government
Management, Information, and Technology, House



            Page 2              GAO/OCG-99-20 SSA Challenges
Government Reform Committee, Dennis J. Kucinich;
Senator Joseph I. Lieberman; and Senator Carl Levin.

Copies of this report series are being sent to the
President, the congressional leadership, all other
Members of the Congress, the Director of the Office of
Management and Budget, the Commissioner of Social
Security, and the heads of other major departments and
agencies.




David M. Walker
Comptroller General of
the United States




            Page 3               GAO/OCG-99-20 SSA Challenges
Contents



Overview                                             6

Major                                               13
Performance and
Management
Issues
Related GAO                                         31
Products
Performance and                                     34
Accountability
Series




                  Page 4   GAO/OCG-99-20 SSA Challenges
Page 5   GAO/OCG-99-20 SSA Challenges
Overview



                 The Social Security Administration’s (SSA)
                 1998 expenditures of $408 billion constitute
                 over one-fourth of total federal
                 disbursements. When SSA became an
                 independent agency in March 1995, it gained
                 a new measure of control over its resources
                 as well as the authority to address various
                 performance and management challenges it
                 faces in administering the agency’s three
                 major programs: the Old Age and Survivors
                 Insurance (OASI) program, the Disability
                 Insurance (DI) program, and the
                 Supplemental Security Income (SSI) program.
                 Combined, these programs touch nearly
                 every American family. The OASI and DI
                 programs together are commonly known as
                 “Social Security,” providing benefits
                 financed through payroll taxes paid by
                 workers and their employers and
                 self-employed people to retired and disabled
                 workers and their dependents and survivors.
                 SSI provides assistance to needy aged, blind,
                 or disabled people and is financed from
                 general tax revenues.


The Challenges   The most critical overarching issue facing
                 SSA is the long-term solvency of the Social
                 Security system. The Social Security Trust
                 Funds are forecast to be depleted by 2032
                 and are projected to be in a progressively


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                      Overview




                      negative cash-flow position by 2013. While
                      the financing problem is not immediate,
                      analysts agree that it should be addressed
                      soon to mitigate the impacts of any changes
                      that are made. In the past, we have called on
                      SSA to assume a stronger leadership role in
                      this policy debate by strengthening its
                      capacity for carrying out needed policy
                      analysis, evaluation, and research. In this
                      connection, SSA has initiated an active public
                      education effort to improve the public’s
                      awareness of the system’s long-term
                      solvency difficulties. Beyond this critical
                      overarching issue, SSA faces a number of
                      specific management challenges.


Long-Standing SSI     Since SSA assumed responsibility in 1974 for
Issues Require More   the SSI program, SSA officials have been
Active Management     challenged to serve the diverse needs of
and Oversight         program recipients while still protecting the
                      program’s overall financial health and
                      integrity. Long-standing challenges—such as
                      program abuses and mismanagement,
                      increasing SSI overpayments, and SSA’s
                      inability to recover outstanding SSI
                      debt—have continued, contributing to recent
                      congressional criticism of SSA’s ability to
                      effectively manage SSI and ensure program
                      integrity. Recently, we reported that SSI
                      difficulties are attributable to two underlying


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                      Overview




                      causes: an organizational culture that places
                      greater priority on processing and paying
                      claims than on controlling program
                      expenditures and a management approach
                      characterized by SSA’s reluctance to fulfill its
                      policy development and planning role in
                      advance of major program crises.


Disability Programs   While SSA paid over $73 billion in 1998 in
Need Redesigning      cash benefits to nearly 11 million DI and SSI
and More Focus on     blind and disabled beneficiaries (including DI
Return to Work        spouses and dependents), SSA’s complex
                      process for determining whether an
                      individual qualifies for a disability
                      benefit—the disability claims process—has
                      been plagued by a number of long-standing
                      weaknesses. On the basis of our ongoing
                      review of SSA’s disability claims process
                      redesign effort, we have found that SSA has
                      not been able to keep its redesign activities
                      on schedule or demonstrate that its
                      proposed changes will significantly improve
                      its claims process. In addition, SSA has
                      placed little priority on helping eligible
                      disability program claimants move off the
                      disability rolls and return to work. The
                      lengthy disability determination process
                      encourages applicants to emphasize their
                      inabilities—not their abilities—and



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                   Overview




                   beneficiaries receive little encouragement to
                   use rehabilitative services.


New Technology     To cope with increased workload
Required to Cope   demands—caused, in part, by the
With Future        forthcoming retirement of the baby boom
Workload Demands   generation—SSA is counting on its effective
                   use of technology to allow the agency to
                   serve the increasing numbers of applicants
                   and beneficiaries with fewer staff. However,
                   concerns have been raised about the
                   implementation of new computer equipment,
                   which is intended to play a major role in
                   SSA’s redesigned work processes and in
                   better serving a larger beneficiary
                   population. SSA must also continue to
                   improve its internal controls over stored
                   information system data.


Progress and       SSA has made progress in addressing the
Next Steps         overarching issue of Social Security’s
                   solvency. In August 1998, the agency
                   announced the creation of the position of
                   Deputy Commissioner for Policy to serve as
                   the principal adviser to the Commissioner of
                   Social Security on major policy issues. The
                   incumbent will also be responsible for major
                   activities in the areas of strategic policy
                   planning; policy research and evaluation;


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Overview




statistical programs; and overall policy
development and analysis, including analysis
focusing on Social Security’s solvency. SSA
has also taken actions that address
challenges related to the Year 2000
computing crisis. SSA made important early
progress in assessing and renovating systems
critical to preventing the disruption of
benefits and has come to be regarded as a
federal leader in addressing these issues.

With regard to progress concerning specific
management challenges, SSA recently issued
a report on SSI management. In this report,
SSA discusses the need to take aggressive
action to improve overall payment accuracy,
increase continuing disability reviews,
combat program fraud, and improve debt
collection. The report also establishes SSA’s
goals to measure the anticipated yearly
impact of planned initiatives in each of these
areas. The agency now intends to begin
planning on how it will implement these
goals in its day-to-day operations. In
addition, SSA has informed us that new
software development processes have been
implemented and that all agency software
development activities will be using these
processes by June 2000.




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Overview




Despite this progress, SSA must take further
steps to meet the serious challenges it faces.
For example, SSA has yet to make significant
improvements to its disability claims process
and continues to experience delays in testing
and implementing initiatives to redesign the
process. As a result, long-standing process
weaknesses and inefficiencies remain and
claimants likely will continue to wait a long
time for a final decision on their eligibility.
With regard to the SSI program, which
remains on GAO’s high-risk list, SSA must
produce and use research information on the
program, be more responsive in suggesting
legislative changes, and improve payment
controls and debt collection activities.
Absent these improvements, SSI
overpayments and outstanding debt will
continue to undermine the financial integrity
of the program.

In our opinion, progress is being made to
address certain management issues because
of the involvement of high-level agency
officials. Given the long-standing nature of
the challenges SSA faces and their
far-reaching implications, the agency needs
to continue to assert strong leadership, spell
out its expectations, and subsequently
marshall agency resources to translate SSA’s
plans into timely action. To effect


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Overview




meaningful change, SSA must address the
root causes of its management and
performance weaknesses and ensure
sustained management oversight and
attention.




Page 12             GAO/OCG-99-20 SSA Challenges
Major Performance and Management
Issues


            The major management and performance
            issues confronting SSA officials are complex,
            in part, because they are closely linked to
            profound changes in our country. The baby
            boom generation is nearing retirement age,
            people are living longer, and technology and
            its applications are changing rapidly. At the
            same time, the public is expecting greater
            program integrity from government
            agencies, even though resources are
            constrained. While SSA has taken corrective
            action over the years to address
            management and performance difficulties,
            we have identified several areas where
            concerns remain: management and oversight
            weaknesses in the high-risk SSI program,
            SSA’s disability programs’ systemwide
            difficulties, and concerns with a new
            computer network designed to help alleviate
            future SSA workload demands. Unless
            continued management oversight and
            attention are provided and corrective action
            is taken in these areas, the future
            effectiveness of SSA programs will be limited.




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                 Major Performance and Management
                 Issues




Long-Standing    Reports by the media and oversight agencies
SSI Issues       have highlighted SSI program abuses and
Require More     mismanagement, increases in SSI
Active           overpayments, and SSA’s inability to
Management and   adequately recover outstanding SSI debt.
                 These issues have spurred congressional
Oversight
                 criticism of SSA’s ability to effectively
                 manage SSI workloads. In February 1997, we
                 designated SSI a high-risk program because
                 of its susceptibility to fraud, waste, and
                 abuse and insufficient management
                 oversight of the program. To a great extent,
                 SSA’s inability to address its most significant
                 long-standing SSI program weaknesses is
                 attributable to two underlying causes: (1) an
                 organizational culture that places a greater
                 priority on processing and paying claims
                 than on controlling program expenditures
                 and (2) a management approach
                 characterized by SSA’s reluctance to fulfill its
                 policy development and planning role in
                 advance of major program crises.

                 Our work confirms that there is a persistent
                 tendency to view the SSI program in much
                 the same way as SSA’s OASI and DI
                 programs—where emphasis is placed on
                 quickly processing claims for individuals
                 with an earned right to benefits—rather than
                 as a welfare program, where additional
                 income and asset verifications are necessary.


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Major Performance and Management
Issues




During fiscal year 1998, for example, current
and former recipients owed SSA more than
$3.3 billion, including $1.2 billion in newly
detected overpayments for the year. Based
on prior experience, SSA is likely to collect
less than 15 percent of the outstanding debt
in a given year. SSA’s culture has contributed
to the lack of priority placed on recovering
overpayments once they are identified. This
has been evidenced by SSA’s traditional
reluctance to use overpayment recovery
tools currently available and aggressively
pursue additional tools when warranted,
including tax refund offsets, credit bureau
reporting, collection agencies, and interest
levies on outstanding debt owed.

Recently, SSA has taken a number of actions
to improve the financial integrity of the SSI
program. For example, SSA is expanding its
use of on-line data maintained by state
Disability Determination Services (DDS) to
better verify recipient financial information
and prevent program overpayments. (SSA
funds 54 state DDSs to process disability
applications and conduct continuing
disability reviews in accordance with SSA
policies and procedures.) SSA also sought
statutory authority in the last session of the
Congress to use credit bureaus, private
collection agencies, interest levies, and other


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Major Performance and Management
Issues




ways to recover more SSI overpayments.
Reversing the trends in SSI program
performance will, however, require
sustained management attention to issues of
program direction and a change in SSA’s
organizational culture.

We believe SSA should take a leadership role
in identifying program weaknesses before
they reach crisis levels and in developing
comprehensive plans and strategies to
address those weaknesses. However, SSA’s
approach has historically been reactive in
nature, resulting in missed opportunities to
address critical SSI policy issues. Our work
shows that SSA has been reluctant to use its
research and policy development capabilities
to assess the effects of demographic changes
in the SSI population and legislative and
court-mandated program changes. In
addition, SSA has often hesitated in initiating
changes in internal policy to address
identified weaknesses or suggesting changes
to laws governing SSI. For example, in the
recent congressional debate surrounding SSI
eligibility for children, SSA did not develop
and communicate timely information to the
Congress on the effects of prior legislative
and court-mandated changes. SSA also did
not develop its own proposals for revising
childhood eligibility policies, despite


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Major Performance and Management
Issues




possessing years of data documenting
explosive growth in childhood SSI rolls,
changes in the types of impairments
qualifying for benefits, and allegations that
the program was being abused.

SSA  has often viewed itself as an implementer
of program policies rather than as a leader in
formulating a policy vision. Consequently,
SSA did not address, before the issues
reached crisis levels, criticisms surrounding
the rapid growth in the number of drug
addicts and alcoholics qualifying for SSI
benefits and reports of program abuses by
recipients. In addition, SSA has not developed
options for revising policies for determining
SSI-recipient living arrangements, despite
acknowledging for many years that this
program area is highly error-prone, open to
manipulation by recipients, and a source of
considerable SSI overpayment. Although SSA
has developed an agencywide strategic plan
and an annual performance plan, as required
by the Government Performance and Results
Act of 1993, these plans still do not
adequately focus on the specific needs and
unique characteristics of the SSI program and
its recipient population. Instead, SSA’s
planning efforts have resulted in general
goals and objectives for SSA as a whole.



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Issues




SSA has acknowledged the need to play a
more active policy development role and is
currently in the process of restructuring its
research and policy components to better
address these concerns. In this regard, SSA
has made conducting effective policy
development, research, and program
evaluation a key agency goal, with attention
to the SSI program being an important
element of this goal. Additional staffing
resources are being obtained by the newly
created SSA Office of Policy. Consequently,
SSA should be better positioned to develop
policy alternatives in the SSI program.

SSA is also taking certain measures that it
believes will strengthen the integrity of the
SSI program. In this regard, SSA produced its
first SSI management report in October 1998,
which discusses the need to take aggressive
action in four areas: improving overall
payment accuracy, increasing continuing
disability reviews, combating program fraud,
and improving debt collection. The
management report established goals to
measure the anticipated yearly impact of its
planned initiatives in each of these areas.
The agency now intends to begin planning
on how it will implement these goals in its
day-to-day operations. Toward this end, each



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                  Major Performance and Management
                  Issues




                  SSAcomponent is defining its specific role in
                  these initiatives.

                  To remove the SSI program from our
                  high-risk list, however, SSA must produce and
                  use research information on the program, be
                  more responsive in suggesting legislative
                  changes, and improve program policies. The
                  agency should also continuously search for
                  ways to improve its payment controls and
                  debt collection activities. Until additional
                  progress is made in each of these areas, the
                  SSI program will maintain its high-risk
                  designation.


Key Contact       Cynthia M. Fagnoni, Director
                  Income Security Issues
                  Health, Education, and Human Services
                    Division
                  (202) 512-7215
                  fagnonic.hehs@gao.gov


Disability        In 1998, SSA paid $73.4 billion in cash benefits
Programs Need     to 10.7 million DI and SSI blind and disabled
Redesigning and   beneficiaries, including spouses and
More Focus on     dependents. While SSA’s disability claims
Return to Work    process—used to determine whether an
                  individual qualifies for a disability
                  benefit—is time-consuming and expensive,


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                      Major Performance and Management
                      Issues




                      the agency’s efforts to redesign the claims
                      process have been disappointing, and SSA’s
                      disability caseloads for its DI and SSI
                      programs have grown significantly in the
                      past decade. In addition, SSA has not
                      developed a plan that sufficiently addresses
                      actions needed to help beneficiaries fully
                      develop their productive capacities.
                      Consequently, few people have left the rolls
                      to return to work.


DI and SSI Programs   SSA’s complex disability claims process has
Need Redesigning      been plagued by a number of long-standing
                      weaknesses. In the early 1990s, SSA had
                      difficulty keeping up with a rapidly growing
                      workload, and backlogs grew. For example,
                      claimants frequently had to wait more than a
                      year and a half for a final decision.
                      Moveover, in fiscal year 1993, over one-third
                      of the applicants whose cases were denied at
                      the initial level appealed this decision, and
                      two-thirds of these denials were overturned.

                      To manage the disability caseload growth,
                      increase efficiency, and improve service to
                      its customers, SSA began a major effort in
                      1994 to redesign the way it makes decisions
                      related to its disability programs. The agency
                      developed an ambitious plan for change that
                      included testing and implementing 26 key


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Major Performance and Management
Issues




initiatives over a 6-year period. In December
1996, 2 years into the period, we reported
that SSA had made little progress testing and
implementing the plan. In addition, we found
that SSA expanded the scope of certain
initiatives, changed executive leadership for
program redesign, and risked losing
stakeholder support. In the report, we
recommended that SSA (1) focus on the
initiatives most likely to reduce
claims-processing time and administrative
costs and (2) combine those initiatives in an
integrated process and test them at a few
sites before full-scale implementation. In
February 1997, SSA issued a scaled-down
plan that focused on testing and
implementing eight key initiatives.

Based on our ongoing work, SSA has yet to
make significant progress toward improving
its disability claims process. The agency
continues to experience delays in testing or
implementing initiatives, with some
initiatives more than a year behind schedule.
More importantly, though, test results for
two key initiatives indicate that SSA’s efforts
will not result in dramatic improvements in
the efficiency and quality of claims
processing. In addition, SSA has encountered
performance difficulties with the software it
considers vital to support the redesign effort.


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                     Major Performance and Management
                     Issues




                     On a more positive note, SSA is currently
                     conducting a test that combines a number of
                     the initiatives into an integrated process, and
                     the early results for some initiatives are
                     more promising—although not as dramatic
                     as originally hoped for.


Return-to-Work       Today, more than ever, people with
Efforts Need to Be   disabilities have new opportunities to return
Emphasized           to work, yet very few DI and SSI beneficiaries
                     do so. New technologies and medical
                     advances have provided disabled individuals
                     with greater independence and ability to
                     function. Also, the Americans With
                     Disabilities Act supports the premise that
                     people with disabilities can work and have
                     the right to work, and the Social Security Act
                     calls for rehabilitating benefit applicants to
                     the maximum extent possible. Yet only 1 in
                     500 DI beneficiaries and few SSI beneficiaries
                     have left the rolls to return to work.

                     Over the past few years, we have issued a
                     series of reports recommending that SSA
                     place a higher priority on helping DI and SSI
                     beneficiaries maximize their work potential.
                     The lengthy disability determination process
                     encourages applicants to emphasize their
                     inabilities—not their abilities—and
                     beneficiaries receive little encouragement to


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Major Performance and Management
Issues




use rehabilitation services. Also, work
incentives may not make it financially
advantageous for people to work to their full
capacity.

SSA has recently taken steps to expand the
pool of vocational rehabilitation providers
and give providers greater incentives to
assist beneficiaries in obtaining employment.
Specifically, SSA has (1) contracted with 389
public or private vocational rehabilitation
providers, (2) trained state agency staff on
SSA work incentives and reimbursement
procedures, (3) positioned itself to contract
with state agencies to research ways to
improve service integration for beneficiaries
attempting to return to work, and (4) made
plans to demonstrate the effectiveness of
vouchers for beneficiaries to obtain
vocational rehabilitation services from
public and private providers reimbursed on
the basis of employment outcomes. These
steps indicate that SSA has placed greater
priority on return to work. However, these
efforts would have greater effect if cash and
medical benefits were structured to give
beneficiaries greater impetus to use
vocational rehabilitation services and
attempt work. Providing return-to-work
assistance earlier in the decisionmaking
process would also strengthen SSA’s efforts.


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                   Major Performance and Management
                   Issues




Key Contact        Cynthia M. Fagnoni, Director
                   Income Security Issues
                   Health, Education, and Human Services
                     Division
                   (202) 512-7215
                   fagnonic.hehs@gao.gov


New Technology     With the retirement of the baby boom
Required to Cope   generation and individuals living longer in
With Future        retirement, SSA will soon be serving more
Workload           and more individuals. At the same time,
Demands            there will be fewer SSA personnel to serve
                   agency beneficiaries because of agency
                   downsizing and expected retirements of
                   experienced managers and staff. To help it
                   handle these future workload demands, SSA
                   is counting on the effective use of
                   technology. However, SSA has faced
                   challenges in implementing a crucial new
                   computer system intended to support its
                   redesigned work processes and help better
                   serve its beneficiaries. The agency also must
                   address reported weaknesses in its
                   information systems’ internal controls.

                   SSA is currently in the process of redesigning
                   its work processes and modernizing its
                   computer systems to better serve an
                   increasing beneficiary population and
                   achieve improvements in productivity. A key


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Issues




aspect of the modernization effort is the
agency’s transition from its current
mainframe-based computer processing
environment to a client-server processing
environment, in which its Intelligent
Workstation/Local Area Network (IWS/LAN)
will serve as the basic automation
infrastructure. SSA plans to install 56,500
workstations and 1,742 local area networks
in state DDSs and SSA’s approximately 1,300
field offices throughout the country. While
SSA has made considerable strides in
implementing IWS/LAN, its contractor and
some state DDSs have raised issues that could
threaten the overall success of the initiative.

In June 1998, we reported contractor
concerns regarding the availability of the
workstations specified in the IWS/LAN
contract, raising questions as to whether
they could continue to be acquired, and
identified network management and control
issues that threatened successful
implementation of IWS/LAN in some state DDSs.
In addition, we reported that SSA had not
established critical practices for measuring
the contributions of IWS/LAN toward
improving mission performance.

SSA’s plans called for designing and
developing a new generation of software to


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Major Performance and Management
Issues




operate on IWS/LAN to support redesigned
work processes in the client-server
environment. However, we noted in July
1998 that SSA, as a traditional
mainframe-oriented agency, has lacked
experience in developing and using
client-server software. Although SSA planned
to fully implement improved software
development processes by June 2000, it
continued to develop critical software using
the existing weak processes. We also
reported that SSA encountered program
weaknesses and delays in developing the
first major client-server software intended to
operate on IWS/LAN. These weaknesses and
delays were expected to affect both SSA’s
planned schedule for proceeding with the
second phase of the IWS/LAN initiative and its
assessment of the performance, cost, and
benefits of this software in supporting the
redesigned disability process. According to
SSA, however, new processes have been
developed and all agency software
development activities will be using these
processes by June 2000.

SSA also needs to address deficiencies in its
information systems’ internal controls. A
recent audit by an independent accounting
firm (which can be found in the Social
Security Accountability Report for Fiscal


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Issues




Year 1998) found, overall, (1) the agency’s
fiscal year 1998 financial statements to be
fairly presented in all material respects and
(2) management’s assertion that SSA’s
systems of accounting and internal controls
were in compliance with the internal control
objectives outlined in Office of Management
and Budget (OMB) Bulletin No. 98-08 to be
fairly stated. However, the audit also noted
continuing deficiencies in the design and
operation of information systems’ internal
controls. These deficiencies raise concerns
regarding information protection (including
access controls), continuity of operations,
and separation of duties.

Specific information protection weaknesses
were noted in SSA’s local area network,
distributed systems, and mainframe
computer security. The audit also noted that
SSA remains vulnerable should a near-term
disaster occur because of deficiencies in
components of its disaster recovery plan and
related testing of that plan. In addition, the
audit noted instances of insufficient
separation of duties, particularly in the data
operations and customer service staff
positions. For example, the audit identified
instances where field office staff have the
responsibility and capability to perform all
functions related to initiating and


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adjudicating claims. Additionally, some
personnel in the data operations
environment have both security and
operational responsibilities.

The audit indicated that these weaknesses
are significant departures from certain
requirements of OMB Circulars A-127,
Financial Management Systems, and A-130,
Management of Federal Information
Resources. As a result, the audit identified
these weaknesses as instances of substantial
noncompliance with the federal financial
management systems requirements under
the Federal Financial Management
Improvement Act of 1996. The audit report
suggested that SSA assign a high priority to
related corrective actions.

While the audit acknowledged SSA’s progress
in resolving these issues, it emphasized the
importance of continuing corrective action.
These weaknesses have exposed the agency
and its computer systems to external and
internal intrusion, thus subjecting sensitive
SSA information to potential unauthorized
access, modification, or disclosure. In
addition, these weaknesses have increased
the risk of introducing errors or irregularities
into data processing operations and allowing
some individuals to bypass critical controls,


Page 28                  GAO/OCG-99-20 SSA Challenges
Major Performance and Management
Issues




such as authorization and supervisory
review.

As technological changes open doors to new
ways of providing services, SSA also faces
difficult choices about how to provide
cost-effective, world-class service to its
customers. While SSA has traditionally
delivered a considerable amount of its
service through face-to-face contact in its
network of field offices, other types of
service are becoming more popular. The
demand for SSA’s 800-number telephone
service continues to grow, and SSA’s surveys
show that callers prefer to use the telephone
for more of their business. In our opinion,
SSA needs to assess its existing service
delivery structure, including its network of
field offices and teleservice centers. Based
on its findings, SSA may need to restructure
how it does business to take advantage of
new technologies and cost-effectively meet
changing customer preferences.




Page 29                  GAO/OCG-99-20 SSA Challenges
               Major Performance and Management
               Issues




Key Contacts   Gloria L. Jarmon, Director
               Health, Education, and Human Services
                  Accounting and Financial Management
                  Issues
               Accounting and Information Management
                  Division
               (202) 512-4476
               jarmong.aimd@gao.gov

               Joel C. Willemssen, Director
               Civil Agencies Information Systems
               Accounting and Information Management
                 Division
               (202) 512-6408
               willemssenj.aimd@gao.gov




               Page 30                  GAO/OCG-99-20 SSA Challenges
Related GAO Products



SSA Performance   SSA’sManagement Challenges: Strong
and Management    Leadership Needed to Turn Plans Into
Challenges        Timely, Meaningful Action (GAO/T-HEHS-98-113,
                  Mar. 12, 1998).

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

                  Social Security Administration: Effective
                  Leadership Needed to Meet Daunting
                  Challenges (GAO/HEHS-96-196, Sept. 12, 1996).

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


Supplemental      Supplemental Security Income: Action
Security Income   Needed on Long-Standing Problems
Program           Affecting Program Integrity (GAO/HEHS-98-158,
                  Sept. 14, 1998).

                  Supplemental Security Income:
                  Opportunities Exist for Improving Payment
                  Accuracy (GAO/HEHS-98-75, Mar. 27, 1998).

                  Supplemental Security Income:
                  Long-Standing Problems Put Program at



                  Page 31               GAO/OCG-99-20 SSA Challenges
                  Related GAO Products




                  Risk for Fraud, Waste, and Abuse
                  (GAO/T-HEHS-97-88, Mar. 4, 1997).

                  High Risk Series: An Overview (GAO/HR-97-1,
                  Feb. 1997).

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


Social Security   Social Security Disability: SSA Must Hold
Disability        Itself Accountable for Continued
Programs          Improvement in Decisionmaking
                  (GAO/HEHS-97-102, Aug. 12, 1997).

                  Social Security Disability: Improving
                  Return-to-Work Outcomes Important, but
                  Trade-offs and Challenges Exist
                  (GAO/T-HEHS-97-186, July 23, 1997).

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

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




                  Page 32                GAO/OCG-99-20 SSA Challenges
              Related GAO Products




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


Information   Information Security: Serious Weaknesses
Technology    Place Critical Federal Operations and Assets
              at Risk (GAO/AIMD-98-92, Sept. 23, 1998).

              Social Security Administration:
              Subcommittee Questions Concerning
              Information Technology Challenges Facing
              the Commissioner (GAO/AIMD-98-235R, July 10,
              1998).

              Social Security Administration: Technical
              and Performance Challenges Threaten
              Progress of Modernization (GAO/AIMD-98-136,
              June 19, 1998).

              Year 2000 Computing Crisis: Continuing
              Risks of Disruption to Social Security,
              Medicare, and Treasury Programs
              (GAO/T-AIMD-98-161, May 7, 1998).

              Social Security Administration: Significant
              Progress Made in Year 2000 Effort, but Key
              Risks Remain (GAO/AIMD-98-6, Oct. 22, 1997).




              Page 33                GAO/OCG-99-20 SSA Challenges
Performance and Accountability Series



             Major Management Challenges and Program
             Risks: A Governmentwide Perspective
             (GAO/OCG-99-1)

             Major Management Challenges and Program
             Risks: Department of Agriculture
             (GAO/OCG-99-2)

             Major Management Challenges and Program
             Risks: Department of Commerce
             (GAO/OCG-99-3)

             Major Management Challenges and Program
             Risks: Department of Defense (GAO/OCG-99-4)

             Major Management Challenges and Program
             Risks: Department of Education
             (GAO/OCG-99-5)

             Major Management Challenges and Program
             Risks: Department of Energy (GAO/OCG-99-6)

             Major Management Challenges and Program
             Risks: Department of Health and Human
             Services (GAO/OCG-99-7)

             Major Management Challenges and Program
             Risks: Department of Housing and Urban
             Development (GAO/OCG-99-8)




             Page 34             GAO/OCG-99-20 SSA Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Department of the Interior
(GAO/OCG-99-9)

Major Management Challenges and Program
Risks: Department of Justice (GAO/OCG-99-10)

Major Management Challenges and Program
Risks: Department of Labor (GAO/OCG-99-11)

Major Management Challenges and Program
Risks: Department of State (GAO/OCG-99-12)

Major Management Challenges and Program
Risks: Department of Transportation
(GAO/OCG-99-13)

Major Management Challenges and Program
Risks: Department of the Treasury
(GAO/OCG-99-14)

Major Management Challenges and Program
Risks: Department of Veterans Affairs
(GAO/OCG-99-15)

Major Management Challenges and Program
Risks: Agency for International Development
(GAO/OCG-99-16)




Page 35                    GAO/OCG-99-20 SSA Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Environmental Protection Agency
(GAO/OCG-99-17)

Major Management Challenges and Program
Risks: National Aeronautics and Space
Administration (GAO/OCG-99-18)

Major Management Challenges and Program
Risks: Nuclear Regulatory Commission
(GAO/OCG-99-19)

Major Management Challenges and Program
Risks: Social Security Administration
(GAO/OCG-99-20)

Major Management Challenges and Program
Risks: U.S. Postal Service (GAO/OCG-99-21)

High-Risk Series: An Update (GAO/HR-99-1)




The entire series of 21 performance and
accountability reports and the high-risk
series update can be ordered by using
the order number GAO/OCG-99-22SET.




Page 36                    GAO/OCG-99-20 SSA Challenges
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