oversight

Veterans' Benefits: VA Needs Death Information From Social Security to Avoid Erroneous Payments

Published by the Government Accountability Office on 1990-05-18.

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

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                                Testimony
’ GAO

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                                                                               141381

    For Release                 VETERANS' BENEFITS:
    on Delivery                 VA Needs Death Information          From
    Expected at                 Social   Security  to Avoid
    9:30 a.m. EDT               Erroneous   Payments
    Friday
    May 18, 1990




                                Statement of Gregory J. McDonald
                                Associate Director,   Income Security           Issues
                                Human Resources Division

                                Before the
                                Committee on Veterans'        Affairs
                                United States Senate




        GAO/T-HRD-90-28
                                                         /
                                         SUMMARY
The Department        of Veterans    Affairs      (VA) provides     about $15
billion    in compensation       and pension       benefits     each year.    Nearly       3
million    veterans     and 1 million      surviving       spouses and other
dependents      receive   these benefits.          When a beneficiary      dies,    if
surviving     relatives     or other knowledgeable           people do not report
the death to VA promptly,          erroneous       payments can result.
The Social        Security     Administration      (SSA) receives    voluntarily
reported       death information         from many sources     and purchases      death
certificate        information      from the states.       Federal   agencies,      such
as VA, offering          benefit    programs are authorized        to obtain     this
information.          By using SSA death information,           VA could identify
beneficiaries         who are reported        as deceased.     VA has not obtained
this     information       from SSA for use in its program management.
Upon matching       VA payment files    with death information    maintained
by   SSA, GAO found that in April        1989 VA paid compensation      or
pension    benefits     for over 1,200 veterans    who SSA records
reported    had died.       About 100 had been dead for 10 years or more.
The potential       annual erroneous    payments were at least     $5.7
million  --a conservative        number due to data limitations.
VA pays compensation           and pension    benefits      to about 227,000
beneficiaries        who do not have social         security    numbers on file
with VA, precluding          automated    matching.      We were also unable to
confirm      with certainty       whether payments were also continuing              for
any “survivors’@       who had died because of the way VA records                their
names and social         security     numbers in its payment file.          Finally,
we did not match VA payment records               with additional       SSA
information       from over 900,000 death certificates              because of
restrictions        on the use of the data.
VA and SSA need to promptly             arrange   for VA to acquire     and use,
on a recurring      basis,    SSA's death information.           In addition,
other federal      programs,      including     some VA programs,,, require     SSNs
as a condition      of eligibility.          VA is not authorized     to require
SSNs for either       its compensation         or protected   pension   programs.
S. 1110 would give VA the authority               to remedy this problem,      and
we endorse     that legislation.
Mr.       Chairman       and Members of the                          Committee:


We are       pleased          to be here                today        to testify           on our        work     concerning
the       Department         of Veterans                  Affairs'           (VA) need          to obtain         death
information            from     the      Social            Security           Administration               (SSA) to
avoid       erroneous          payments             to the           accounts          of deceased
beneficiaries.


In July        1989,        you requested                  that          we determine           whether         VA makes
substantial            erroneous             payments              to the          accounts      of deceased
beneficiaries               under      its        compensation                and pension           programs.               You
also      asked      that      we propose                 remedies           to resolve          any problems               that
we detected            in the        payment              system.           We have        completed            our
fieldwork         and have           sent         our      draft          report       to both      VA and SSA for
comment.          A copy        of    the         draft         was also            provided       to the        Committee.


VA provides            about        $15 billion                 in disability              compensation               and
pension       benefits          each         year.           Nearly          3 million          veterans         and 1
million       surviving             spouses          and other              dependents           receive         these
benefits.            When a beneficiary                         dies,       payments           should      be
terminated.             However,             if    surviving               relatives           or other
knowledgeable               people      do not             report          beneficiary           deaths         to VA
promptly,         substantial                erroneous             payments            can result.




                                                                     1
 In administering                 Social          Security              programs,                   SSA receives
voluntarily             reported             death       information                    from many sources,                     such       as
employers            and funeral              home operators,                          and purchases               death
certificate             information               from        the       states.                Federal           agencies,          such
as VA, that             offer         benefit         programs                are       authorized               to obtain          and
use this            information              to ensure           that           payment              records       are     correct.
However,            VA does       not        curr,ently          obtain             this            or equivalent
information             on a routine                 basis.


RESULTS OF MATCHING
VA AND SSA DATA


In responding               to your           request,          we matched                     VA's      benefit         payment
files     with        death       information                 maintained                 by SSA and found                    that     VA
is making           substantial               compensation                    and pension                payments          on behalf
of deceased            veterans.                This,happens                   because              VA relies         primarily
on voluntary             reporting              by relatives                   and others,                who may not
report        the     death       or may be slow                    in doing                  so.


Our match           consisted           of      two parts.                    First,           we matched           VA's
payment        records          for     compensation                    and pension                   benefits        as of
April     24,       1989,       with      SSA's        file         of voluntarily                       reported        death
information            as of          December         1988.             This          file         contained         information
on over        39 million              deaths.            We found               1,065          veterans           who SSA
information            showed          were deceased                    but      for       whom VA payments                   were
continuing.


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 Second,       we matched               the     VA payment            file         with         an SSA file
containing             information              from     about        450,000             death         certificates.
This       information             was purchased               from         the     states          and is         available
to other         federal           agencies.             Through            this      match,            we identified
another         147 deceased               veterans        to whose accounts                            VA benefit
payments         continued.                We were unable                   to determine                  with     certainty,
however,         whether           payments          were continuing                      for     any 'lsurvivors't                  who
had died         because           of    the      way VA records                   survivors'              names and
social       security            numbers          (SSNs)       in     its        payment          file.


SSA also        maintains               information            from         about         900,000          additional
death       certificates.                  This      information                 is purchased               from       the
states       under       restricted               agreements.                These         agreements             preclude
SSA from         releasing              this      information               to other             federal         agencies
without        the     states'           permission.                 Thus,         we did         not      match       VA's
payment        files        with        this      information.


In all,        our     match        identified           over         1,200         veterans              who were
reported        dead        in     SSA records           as of December                         1988.       VA was still
making       payments            to these          veterans'           accounts                 in April         1989.        About
100 had been             reported              as dead     for        10 years             or more.              The
potential         annual           erroneous           payments             in     these         cases      totaled          $5.7
million.


At our       request,            VA investigated                 some of            the     cases          identified           in



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our    match        and verified               substantial                 payments          on behalf            of veterans
who were           apparently           deceased.                For example:


--      VA records                showed       that        direct          deposits          of     $30,369          had been
        made to the                bank     account            of a veteran                 who died          in August
          1984.        After         verifying             the      date     of     death,         VA ended           benefit
        payments            and is         further          investigating                   the    case.


mm      Another          veteran          died         in September                1983,      according              to     SSA
        records,            but      VA continued                to make direct                   deposit         payments
        totaling            $13,797         to his          account.               VA verified              the      date    of
        death,         ended         benefit           payments            as of      September             1, 1989,         and
        is    considering               further            action.


VA HAS NOT OBTAINED
SSA'S DEATH INFORMATION


VA and SSA have                negotiated               over        access         to death             information          for
the    past       several         years,         but       without          success.              SSA maintains              that
VA has expressed                  reluctance               to comply          with          SSA's        requirement            to
independently               verify        reported             deaths        before          taking         any action
that    may adversely                 affect          a person's             benefits.              VA, however,                says
that    such        verification               is      required            under      its     due process
regulations            before         benefits             can be terminated.


Notwithstanding                this       misunderstanding,                        we did         not     identify          any
reasons       to     further          delay         VA's       obtaining            SSA information.
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Accordingly,                    we met with                   VA officials                   in late         February,                 after
which         the        Acting              Chief          Benefits            Director             sent    a letter              to the          SSA
Commissioner                        formally           requesting                  the      information.                 We understand
that        VA and SSA officials                                  plan         to meet on this                    matter          in early
June        1990.          VA officials                       have         informed            us that            once      the        SSA
information                    is      available,                 matching            with          SSA information                    and
verifying                the         results           canbe             accomplished                 at a nominal                 cost.
Likewise,            SSA officials                           said        the       cost      of providing                  the
information                to VA would                       be nominal.


VA DOES NOT HAVE SOCIAL SECURITY NUMBERS
FOR ALL BENEFICIARIES


It     is    important                  to note              that        the       primary           identifier             for        effective
matching            of     this              type      is     the        social           security          number.
Accordingly,                    we analyzed                   VA's        payment            file       to determine                   whether
all     beneficiaries                         were         identified               by     SSNs.         We found            that         in
1989,        VA paid                 over      $1 billion                 in benefits                 to about           227,000
veterans            and survivors                          who were not                   identified          by      SSNs.             Without
SSNs        for     these             and future                  beneficiaries,                    any effective                  matching
of VA payment                        files          with      SSA's death                  information              will          be
precluded.                 Therefore,                      VA could            continue             to make erroneous
benefit           payments                   unless         all      beneficiaries                    are    required              to provide
SSNs.



Other        federal                programs,                including              some VA programs,                       require            SSNs
as a condition                        of eligibility.                          VA is         not      currently             authorized
                                                                               5
to    require       SSNs for        either        its     compensation             or protected            pension
programs.           Mr.     Chairman,        your       bill,     S. 1110,           would       authorize          VA
to require          beneficiaries            to provide           SSNs as a prerequisite                      for
eligibility          for      benefits.           We endorse            that      legislation.




In conclusion,              SSA has        information           that     VA could           use to       identify
potentially          erroneous            payments        to deceased            beneficiaries.               SSA
and VA need          to establish            a system           to routinely            share      this
information,          since       there      is    no apparent             reason       to    further        delay
its     exchange.


Mr.     Chairman,          that   concludes          my prepared               statement.          We will          be
happy         to answer       any questions             you or other             members         of the
Committee         may have.




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