oversight

Follow-up: Aged Beneficiaries Whose Benefits Have Been Suspended for Address, Whereabouts Unknown, or Foreign Enforcement

Published by the Social Security Administration, Office of Inspector General on 2019-08-06.

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

             Audit Report



  Follow-up: Aged Beneficiaries
    Whose Benefits Have Been
Suspended for Address, Whereabouts
 Unknown, or Foreign Enforcement




      A-09-16-50077 | August 2019
MEMORANDUM


Date:      August 6, 2019                                                   Refer To:

To:        The Commissioner
From:      Inspector General
Subject:   Follow-up: Aged Beneficiaries Whose Benefits Have Been Suspended for Address,
           Whereabouts Unknown, or Foreign Enforcement (A-09-16-50077)

           The attached final report presents the results of the Office of Audit’s review. The objective was
           to determine whether the Social Security Administration had taken appropriate actions for Old-
           Age, Survivors and Disability Insurance beneficiaries over age 70 whose benefits it suspended
           for address, whereabouts unknown, or failure to return the foreign enforcement questionnaire.

           If you wish to discuss the final report, please call me or have your staff contact Rona Lawson,
           Assistant Inspector General for Audit, 410-965-9700.




                                                          Gail S. Ennis

           Attachment
Follow-up: Aged Beneficiaries Whose Benefits Have Been
Suspended for Address, Whereabouts Unknown, or Foreign
Enforcement
A-09-16-50077
August 2019                                                              Office of Audit Report Summary

Objective                                Findings

To determine whether the Social          SSA did not always take appropriate action for aged beneficiaries
Security Administration (SSA) had        whose payments it suspended for address, whereabouts unknown,
taken appropriate actions for Old-Age,   or failure to return the foreign enforcement questionnaire. This
Survivors and Disability Insurance       occurred because SSA does not apply its presumption of death
beneficiaries over age 70 whose          policy to beneficiaries whose payments it suspended for address
benefits were suspended for address,     reasons. In addition, SSA did not have adequate controls to
whereabouts unknown, or failure to       (1) identify and terminate payments for beneficiaries whose
return the foreign enforcement           whereabouts were unknown and remained in suspense for 7 years
questionnaire.                           or longer and (2) ensure it documents its attempts to locate
                                         beneficiaries whose whereabouts are unknown.
Background
                                         Based on our random samples, we estimate SSA did not terminate
SSA may suspend benefits when it         benefits for 6,433 (30 percent) beneficiaries it could not locate and
receives a third-party report that a     whose payments it suspended for 7 years or longer. These
beneficiary is missing or when checks    beneficiaries had approximately $115.4 million in suspended
are returned because they are            benefits since their presumed date of death that was at risk of being
undeliverable.                           issued to someone other than the beneficiary. We also found that
                                         SSA employees did not document their attempts to locate
When a beneficiary’s whereabouts are     9,449 beneficiaries who had $382.5 million in suspended benefits.
unknown and benefits have been           Finally, SSA did not resolve the suspensions for 20,710 aged
suspended for at least 7 continuous      beneficiaries identified during our 2011 audit.
years, SSA will assume the beneficiary
failed to request payment during the     Recommendations
7-year period because he/she passed
away.                                    We made seven recommendations for SSA to take corrective
                                         actions for beneficiaries whose payments it had suspended for
In a 2011 audit, we estimated that       address, whereabouts unknown, or failure to return the foreign
29,196 beneficiaries whose benefits      enforcement questionnaire.
were suspended for longer than 7 years
had not been terminated based on a       SSA agreed with our recommendations.
presumption of death.

For our current review, we identified
21,770 aged beneficiaries in suspense
for address, whereabouts unknown, or
foreign enforcement. Of these,
11,922 beneficiaries had a U.S.
address, and 9,848 beneficiaries had a
foreign address.
TABLE OF CONTENTS
Objective ..........................................................................................................................................1
Background ......................................................................................................................................1
Results of Review ............................................................................................................................2
     SSA Policies and Procedures for Beneficiary Suspensions .......................................................3
     Sample Results ...........................................................................................................................4
     Beneficiaries in Suspense for 7 Years or Longer.......................................................................5
           Beneficiaries Who Had a U.S. Address ...............................................................................5
           Beneficiaries Who Had a Foreign Address ..........................................................................5
     Beneficiaries in Suspense Fewer Than 7 Years .........................................................................6
           Beneficiaries Who Had a U.S. Address ...............................................................................6
           Beneficiaries Who Had a Foreign Address ..........................................................................7
     SSA Actions in Response to Our Prior Audit ............................................................................7
Conclusions ......................................................................................................................................8
Recommendations ............................................................................................................................8
agency comments .............................................................................................................................9
                    – FORM SSA-7162................................................................................................ A-1
                    – Scope and Methodology ..................................................................................... B-1
                    – Sampling Methodology and Results ................................................................... C-1
                    – Agency Comments .............................................................................................. D-1




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)
ABBREVIATIONS
FEQ                 Foreign Enforcement Questionnaire

Form SSA-7162       Report to the United States Social Security Administration

OIG                 Office of the Inspector General

POMS                Program Operations Manual System

Postal Service      United States Postal Service

SSA                 Social Security Administration




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)
OBJECTIVE
Our objective was to determine whether the Social Security Administration (SSA) had taken
appropriate actions for Old-Age, Survivors and Disability Insurance beneficiaries over age 70
whose benefits it suspended for address, whereabouts unknown, or failure to return the foreign
enforcement questionnaire (FEQ).

BACKGROUND
SSA administers the Old-Age, Survivors and Disability Insurance program to provide monthly
benefits to retired and disabled workers, including their dependents and survivors. 1 SSA may
suspend benefits when it receives a third-party report that a beneficiary is missing or when
checks are returned because they are undeliverable. 2 SSA may also suspend benefits when
beneficiaries living outside the United States do not return the FEQ (see Appendix A). 3 In all
such instances, SSA must attempt to locate the beneficiary. 4 When SSA’s efforts to locate a
beneficiary are unsuccessful, it sends a notice to the beneficiary’s last address of record. If the
beneficiary does not respond to the notice, SSA suspends benefits. SSA’s efforts to locate the
beneficiary must be documented. 5

SSA policy states it will suspend benefits for “whereabouts unknown” when it receives third
party reports, mail, and undeliverable checks that may indicate a beneficiary’s whereabouts are
unknown. Suspension is proper when SSA cannot locate a beneficiary and his/her whereabouts
are unknown. 6 SSA policy also states it must have a current address for all beneficiaries so it can
contact them when necessary to ensure that entitlement still exists. Mail the U.S. Postal Service
returned as “undeliverable” may indicate a beneficiary has moved; the address of record is
incorrect due to an error; or an event that affects entitlement has occurred (for example, death).
If the beneficiary’s financial institution and Postal Service cannot furnish a current address and
the beneficiary is receiving benefits, SSA will suspend benefits for “address” reasons. 7 Based on
these policies, SSA employees must determine whether to suspend benefits for whereabouts
unknown or for address reasons.




1
    Social Security Act, 42 U.S.C. §§ 401-402 (govinfo.gov 2017)
2
    SSA, POMS, GN 02602.320, B (March 14, 2014).
3
    SSA, POMS, RS 02655.010, C (August 22, 2016).
4
    SSA, POMS, GN 01010.300, A (November 10, 2011) and RS 02655.010, E (August 22, 2016).
5
    SSA, POMS, GN 02602.320, C.1 (March 14, 2014).
6
    SSA, POMS, GN 02602.320, B (March 14, 2014).
7
    SSA, POMS, GN 02605.055, A and B.4 (June 11, 2013).



Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                             1
SSA determines whether its presumption of death policy applies after it determines whether SSA
employees suspended benefits for whereabouts unknown or address reasons. SSA policy states
that, when a beneficiary’s whereabouts are unknown and benefits have been suspended for at
least 7 continuous years, SSA will assume the beneficiary failed to request payment during the
7-year period because he/she was deceased. 8 SSA uses this presumption of death to terminate
benefits and prevent benefits from remaining in suspense indefinitely. However, if SSA
suspended benefits for address reasons and could not locate, its presumption of death policy does
not apply. Terminating entitlement for presumed death ensures suspended payments will not be
improperly or fraudulently issued to someone other than the beneficiary. 9

In a 2011 audit, 10 we found SSA had not taken appropriate actions for beneficiaries over age 70
whose benefits were suspended for address, whereabouts unknown, or miscellaneous reasons. 11
We estimated (1) 29,196 beneficiaries whose benefits were suspended for longer than 7 years
had not been terminated based on a presumption of death, 12 (2) 5,981 beneficiaries had been
suspended between 2 and 7 years, and (3) there was no evidence that SSA conducted the
required follow-up actions for 2,964 beneficiaries living outside the United States who did not
return FEQs. Our report included several recommendations for corrective action. SSA agreed
with our recommendations. 13

For our current review, we identified a new population of 21,770 beneficiaries 14 over age 70,
whose payments SSA had suspended for at least 24 months for address, whereabouts unknown,
or failure to return the FEQ. This consisted of 11,922 beneficiaries whose last known address
was in the United States and 9,848 beneficiaries whose last known address was in a foreign
country. From these populations, we selected 2 random samples of 100 beneficiaries for review
(see Appendix C).

RESULTS OF REVIEW
SSA did not always take appropriate action to terminate benefits for aged beneficiaries whose
payments it suspended for address, whereabouts unknown, or failure to return the FEQ. This
occurred because SSA does not apply its presumption of death policy to beneficiaries whose
payments it suspended for address reasons. In addition, SSA did not have adequate controls to


8
    SSA, POMS, GN 02602.320, F (March 14, 2014) and GN 00304.050, A (January 5, 2012).
9
    SSA, Social Security Rulings, 99-1p (April 14, 1999).
10
  SSA, OIG, Aged Beneficiaries Whose Benefits Have Been Suspended for Address or Whereabouts Unknown,
A-09-09-29117 (June 2011).
11
   Benefits were suspended for miscellaneous reasons such as when a beneficiary did not return a foreign
enforcement questionnaire or when no other specific reason applied.
12
     This includes beneficiaries suspended for address or whereabouts unknown, or miscellaneous reasons.
13
  SSA, OIG, Aged Beneficiaries Whose Benefits Have Been Suspended for Address or Whereabouts Unknown,
A-09-09-29117, p. 9 (June 2011).
14
  These 21,770 beneficiaries consisted of 12,677 suspended for address, 6,105 suspended for whereabouts
unknown, and 2,988 suspended for failure to return the FEQ.


Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                  2
(1) identify and terminate payments for beneficiaries whose whereabouts were unknown and
remained in suspense for 7 years or longer and (2) ensure it documents its attempts to locate
beneficiaries whose whereabouts are unknown.

Based on our random samples, we estimate the following.

      SSA did not terminate benefits for 6,433 (30 percent) beneficiaries it could not locate and
       whose payments it suspended for 7 years or longer. These beneficiaries had approximately
       $115.4 million in suspended benefits since their presumed date of death that was at risk of
       being issued to someone other than the beneficiary.
      SSA did not document its attempts to locate 9,449 (43 percent) beneficiaries who had
       $382.5 million in suspended benefits (see Appendix C).

Finally, SSA did not resolve suspensions for 20,710 (55 percent) of the 37,970 beneficiaries
identified in our 2011 audit.

SSA Policies and Procedures for Beneficiary Suspensions
SSA policy states it will suspend benefits for “whereabouts unknown” when it receives
third-party reports, mail, and undeliverable checks that may indicate a beneficiary’s whereabouts
are unknown. Suspension is proper when SSA cannot locate a beneficiary and his/her
whereabouts are unknown. 15 SSA policy also states it must have a current address for all
beneficiaries so it can contact them when necessary to ensure entitlement still exists. Mail the
Postal Service returns as “undeliverable” may indicate a beneficiary has moved; the address of
record is incorrect because of an error; or an event affecting entitlement has occurred (for
example, death). If the beneficiary’s financial institution and Postal Service cannot furnish a
current address and the beneficiary is receiving benefits SSA will suspend benefits for “address”
reasons. 16 Based on these policies, SSA employees must determine whether to suspend benefits
for whereabouts unknown or for address reasons.

SSA policies require that employees send an annual or biennial FEQ to verify beneficiaries
residing outside the United States are alive and obtain information regarding events that may
result in suspension, reduction, or termination of benefits. If a beneficiary does not return the
FEQ, SSA suspends benefits and attempts to determine the beneficiary’s location. After a
beneficiary’s payments have been suspended for 12 months and SSA’s attempts to contact a
beneficiary have been unsuccessful, SSA will presume his/her whereabouts are unknown and
should change the suspension reason to whereabouts unknown. 17




15
     SSA, POMS, GN 02602.320, B (March 14, 2014).
16
     SSA, POMS, GN 02605.055, A and B.4 (June 11, 2013).
17
     SSA, POMS, RS 02655.001, A and RS 02655.010 (August 22, 2016).



Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                            3
SSA determines whether its presumption of death policy applies after it determines whether SSA
employees suspended benefits for whereabouts unknown or address reasons. After SSA has
suspended payments to a beneficiary for whereabouts unknown for a period of at least
7 continuous years, SSA assumes the beneficiary is deceased and should terminate entitlement to
benefits effective the last day of the 7-year period or, in certain situations, the date the
beneficiary disappeared. 18 However, for beneficiaries whom SSA suspended benefits for address
reasons and could not locate, its presumption of death policy does not apply. While SSA policy
distinguishes between suspensions for whereabouts unknown and suspensions for address, we do
not see a difference in these two types of suspensions. Once 7 years have passed for a
beneficiary in either type of suspension, SSA should presume the beneficiary has died and
terminate the benefits. Therefore, we recommend that SSA revise its presumption of death
policy to include beneficiaries it could not locate and whose payments it had suspended for
address reasons.

SSA has automated controls to ensure its employees properly resolve benefit suspensions. SSA
generates an alert 60 days after it suspends benefits and a follow-up alert 6 months after the
initial alert for any beneficiary who has been suspended for address reasons. If a beneficiary has
been suspended for whereabouts unknown, SSA generates an alert 60 days after it suspends
benefits and a follow-up alert 12 months after the initial alert if the conditions still exist. When
these alerts are generated, SSA employees should attempt to locate the beneficiary or determine
whether a more appropriate suspension or termination applies. 19 SSA does not generate alerts
after a beneficiary has been in suspense for 7 continuous years. Finally, there were no periodic
alerts for beneficiaries whose payments SSA suspended because they did not return the FEQ.

Sample Results
For the 2 random samples of 100 beneficiaries, 20 we found SSA did not terminate payments to
59 (29 percent) who had been in continuous suspended pay status for 7 years or longer and did
not document its attempts to determine the whereabouts of 85 (43 percent) whose payments it
had suspended for fewer than 7 years. SSA properly resolved the remaining 56 (28 percent)
beneficiaries. Table 1 summarizes the results of our review.

                          Table 1: Aged Beneficiaries in Suspended Pay Status
                                                         Beneficiaries Who    Beneficiaries Who
                        Description                         Had a U.S.         Had a Foreign      Total
                                                             Address              Address
      Beneficiaries in Suspense for 7 Years or Longer             30                   29          59
      Beneficiaries in Suspense Fewer than 7 Years                52                   33          85
      Properly Resolved                                           18                   38          56
      Total                                                      100                  100         200



18
     SSA, POMS, GN 02602.320, F (March 14, 2014) and GN 00304.050, B.6 (January 5, 2012).
19
     SSA, POMS, GN 02602.320, C.1 (March 14, 2014).
20
     The 200 sample consists of 100 domestic and 100 foreign beneficiaries.


Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                 4
Beneficiaries in Suspense for 7 Years or Longer
Of the 200 beneficiaries in our sample, SSA had suspended the payments of 59 for 7 years or
longer. However, SSA had not terminated these beneficiaries’ entitlement. Of the
59 beneficiaries, 30 had a last known address in the United States, and 29 had a last known
address in a foreign country. These beneficiaries had approximately $1.1 million in suspended
benefits since a presumed date of death that were at risk of being issued to someone other than
the beneficiary.

Terminating entitlement (for example, based on a presumption of death) should prevent SSA
from improperly issuing payments to beneficiaries in suspense and ensure a final resolution
occurs for those beneficiaries who would otherwise remain in suspense indefinitely. We
previously reported this vulnerability in a September 2010 report 21 that found SSA improperly
issued approximately $2.1 million in payments to beneficiaries who remained in a suspended
payment status for an extended period. SSA had improperly issued payments to 8,200
beneficiaries who, according to its records, were between ages 112 and 136 and had not received
a Social Security benefit for at least 30 years.

Beneficiaries Who Had a U.S. Address
For the 30 beneficiaries whose last known address was in the United States, SSA had suspended
their payments for address reasons and did not locate or determine the whereabouts of these
beneficiaries. SSA did not terminate their benefits because it does not apply its presumption of
death policy to beneficiaries it could not locate and whose payments it had suspended for address
reasons.

For example, in January 2008, SSA suspended benefits to a beneficiary because it had an
incorrect address. The 78-year-old beneficiary had accumulated $33,336 in suspended benefits
from January 2008 through January 2019. This consisted of $20,200 in suspended benefits
before 7 years and $13,136 in suspended benefits for 7 years or longer. Since SSA could not
locate the beneficiary to obtain a correct address and the beneficiary had been in continuous
suspense for over 10 years, it should terminate her benefits to reduce the potential for improper
payments to ineligible individuals.

Beneficiaries Who Had a Foreign Address
Of the 29 beneficiaries who had a last known address in a foreign country, SSA suspended
benefits for 23 whose whereabouts were unknown 22 and 6 for address reasons. SSA did not
locate, or determine the whereabouts for, any of the 29 beneficiaries; therefore, it should
terminate their benefits based on the presumption of death. This occurred because SSA did not



21
  SSA, OIG, Economic Recovery Payments for Social Security and Supplemental Security Income Beneficiaries,
A-09-10-11017, p. 5 (September 2010).
22
  Of the 23, 22 were in suspense for foreign enforcement and subsequently suspended for whereabouts unknown,
and 1 was in suspense for whereabouts unknown for a continuous 7 years or longer.


Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                      5
have controls to identify and terminate beneficiaries whose benefits remained in suspense and
their address or whereabouts were unknown for at least 7 years. SSA also stated its presumption
of death policy does not apply to beneficiaries it could not locate and whose payments it had
suspended for address reasons.

For example, in January 2009, SSA suspended benefits to a beneficiary because she failed to
return the FEQ. SSA suspended benefits for whereabouts unknown in April 2016. The
105-year-old beneficiary had accumulated $182,620 in suspended benefits from January 2009
through January 2019. This consisted of $122,902 in suspended benefits before 7 years and
$59,718 in suspended benefits for 7 years or longer. Since SSA could not determine the
beneficiary’s whereabouts and the beneficiary had been in continuous suspense for longer than
7 years, it should terminate her benefits based on the presumption of death to reduce the potential
for improper payments to ineligible individuals.

Beneficiaries in Suspense Fewer Than 7 Years
Of the 200 beneficiaries in our sample, SSA had suspended the payments of 85 for fewer than
7 years. However, there was no evidence that SSA employees attempted to locate these
85 beneficiaries. Of the 85 beneficiaries, 52 had a last known address in the United States, and
33 had a last known address in a foreign country. These beneficiaries had accumulated
approximately $3.3 million in suspended benefits.

Beneficiaries Who Had a U.S. Address
There was no evidence that SSA employees attempted to locate the 52 beneficiaries who had a
last known U.S. address. Of these, six had a family member entitled to benefits who were in
current pay and on the same or on another payment record. This included two beneficiaries who
had the same last known address as the suspended beneficiary. However, there was no evidence
SSA employees attempted to contact the family members to determine the suspended
beneficiaries’ whereabouts. For one beneficiary who had earnings after the year of suspension,
there was no evidence SSA attempted to contact the beneficiary’s employer to inquire about the
beneficiary’s whereabouts. The 52 beneficiaries had accumulated approximately $2.5 million in
suspended benefits.

For example, in February 2015, SSA suspended benefits to a beneficiary for address reasons.
According to SSA’s payment records, the beneficiary’s spouse was on the record, in current pay
status, and had the same address as the beneficiary’s last known address. However, we found no
evidence to indicate SSA attempted to determine the beneficiary’s whereabouts or whether she
was deceased. Additionally, since the beneficiary had been suspended for longer than 3 years,
the suspension will most likely not be resolved. As of January 2019, the 73-year-old beneficiary
remained in suspended pay status and had accumulated $5,218 in suspended benefits.




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                          6
Beneficiaries Who Had a Foreign Address
For the 33 beneficiaries who had a foreign address, there was no evidence that SSA attempted to
locate the beneficiaries. Of these, 26 were suspended because they failed to return the FEQ, and
7 were suspended for address. We found no evidence that SSA had conducted the required
actions to determine these beneficiaries’ whereabouts or whether they were deceased. Also, the
26 beneficiaries who failed to return the FEQ had been in foreign enforcement suspense for
12 months or longer. However, SSA did not change their payment status to whereabouts
unknown, as policy requires. 23 These beneficiaries had accumulated $807,947 in suspended
benefits.

For example, in February 2016, SSA suspended benefits to a beneficiary who resided in Hong
Kong because he failed to return the FEQ. We found no evidence of SSA efforts to determine
the beneficiary’s whereabouts or whether he was deceased. As of January 2019, the 90-year-old
beneficiary was in suspense for 3 years. However, SSA did not change the suspension status to
whereabouts unknown, as required. The beneficiary remained in suspended pay status and
accumulated $57,210 in suspended benefits.

SSA Actions in Response to Our Prior Audit
In our 2011 report, 24 we estimated SSA did not (1) terminate benefits based on the presumption
of death for 29,196 beneficiaries whose benefits were suspended for longer than 7 years, (2) take
action on 5,981 beneficiaries who had been suspended between 2 and 7 years and (3) properly
resolve FEQ suspensions for 2,964 beneficiaries living in foreign countries. We recommended
that SSA (1) implement controls to timely identify and terminate, in accordance with SSA’s
presumption of death policy, the entitlement of the beneficiaries whose whereabouts were
unknown and had been in suspended pay status for 7 or more years; (2) ensure suspended
beneficiaries whose whereabouts were unknown for longer than 2 years had their identity and
continuing eligibility for benefits validated before reinstating benefits; and (3) take appropriate
action, including termination of benefits, for suspended beneficiaries living outside the United
States who did not return the FEQ. 25

To determine whether SSA took corrective actions on our prior audit population, we obtained the
beneficiaries’ status from SSA’s payment records as of September 2018 and determined the
following.




23
  SSA policy to require changing the suspension status from foreign enforcement to whereabouts unknown after
12 months was established in July 2015. Of the 26 beneficiaries, 10 were suspended for foreign enforcement before
the policy change, and 16 were suspended for foreign enforcement status after the policy change.
24
  SSA, OIG, Aged Beneficiaries Whose Benefits Have Been Suspended for Address or Whereabouts Unknown,
A-09-09-29117, p. 2 (June 2011).
25
  SSA, OIG, Aged Beneficiaries Whose Benefits Have Been Suspended for Address or Whereabouts Unknown,
A-09-09-29117, p. 9 (June 2011).


Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                       7
   20,710 beneficiaries remained in suspense for 7 years or longer. Generally, this occurred
    because SSA does not apply its presumption of death policy to beneficiaries it suspended for
    address reasons. In addition, SSA determined it would only implement an automated
    systems control to terminate benefits based on a presumption of death for beneficiaries who
    were at least 115-years-old and were suspended for whereabouts unknown.

   16,414 beneficiaries were terminated for death or based on a presumption of death.

   548 beneficiaries’ suspensions were resolved and were in current pay.

   298 beneficiaries were terminated, suspended, or in a non-payment status for other reasons.

In response to our prior audit, SSA revised its policy to require that SSA employees verify the
suspended beneficiary’s identity along with continuing eligibility before reinstating benefits.
Additionally, SSA revised policy to require that beneficiaries whose benefits it suspended
because they did not return the FEQ should change to whereabouts unknown after 12 months.

CONCLUSIONS
SSA did not always take appropriate action to terminate benefits for aged beneficiaries whose
payments it suspended for address, whereabouts unknown, or failure to return the FEQ. This
occurred because SSA does not apply its presumption of death policy to beneficiaries whose
payments it suspended for address reasons. In addition, SSA did not have adequate controls to
(1) identify and terminate payments for beneficiaries whose whereabouts were unknown and
remained in suspense for 7 years or longer and (2) ensure it documents its attempts to locate
beneficiaries whose whereabouts are unknown. These beneficiaries had approximately
$115.4 million in suspended benefits since their presumed date of death that was at risk of being
issued to someone other than the beneficiary. We also found that SSA employees did not
document their attempts to locate the whereabouts of 9,449 beneficiaries who had $382.5 million
in suspended benefits. Finally, SSA did not resolve the suspensions for 20,710 (55 percent) of
the 37,970 aged beneficiaries identified during our 2011 audit.

RECOMMENDATIONS
We recommend that SSA:

1. Revise its policy to terminate benefits for beneficiaries it could not locate and whose
   payments it had suspended for address reasons.

Based on its revised policy, we recommend that SSA:

2. Terminate benefits for the 59 beneficiaries identified by our audit.

3. Identify and terminate benefits for the estimated 6,374 beneficiaries identified by our current
   audit who could not be located and whose benefits were suspended for 7 years or longer.



Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                          8
4. Identify and take appropriate action for the 20,710 beneficiaries identified by our 2011 audit
   whose benefits remained in suspense.

We also recommend that SSA:

5. Implement controls to identify and terminate benefits to beneficiaries whose benefits were
   suspended for address or whereabouts unknown for 7 years or longer.

6. Ensure it documents efforts to locate beneficiaries suspended for address, whereabouts
   unknown, or foreign enforcement.

7. Implement controls to ensure employees change the payment status to whereabouts unknown
   when they cannot locate a beneficiary who did not return the FEQ.

AGENCY COMMENTS
SSA agreed with our recommendations. The Agency’s comments are included in Appendix D.




                                                  Rona Lawson
                                                  Assistant Inspector General for Audit




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                           9
                                      APPENDICES




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)
                     – FORM SSA-7162




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)   A-1
Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)   A-2
                     – SCOPE AND METHODOLOGY
From the Social Security Administration’s (SSA) Master Beneficiary Record, we obtained a data
extract of 21,770 beneficiaries over age 70 who were in suspended pay status for at least
24 months for address, whereabouts unknown, or failure to return the foreign enforcement
questionnaire between January 2008 and June 2016. Of these, SSA suspended 12,677 for
address, 6,105 for whereabouts unknown, and 2,988 because they did not return the foreign
enforcement questionnaire. From this, we identified a population of 11,922 beneficiaries with a
U.S. address and 9,848 beneficiaries with a foreign address.

To accomplish our objective, we

   reviewed the applicable sections of the Social Security Act and SSA’s Program Operations
    Manual System;

   interviewed SSA employees from the Offices of Operations, Systems, and Retirement and
    Disability Policy;

   reviewed queries from SSA’s Master Beneficiary Record, Payment History Update System,
    Numident, and Summary Earnings Query;

   reviewed SSA’s Claims File Record Management System for supporting documentation; and

   calculated the amount of suspended benefits and number of months in suspense for the
    beneficiaries in our sample.

We determined the computer-processed data from the Master Beneficiary Record were
sufficiently reliable for our intended purpose. We tested data to determine their completeness
and accuracy. These tests allowed us to assess the reliability of the data and achieve our audit
objective.

We conducted our audit work in Richmond, California, and Baltimore, Maryland, between
August 2018 and March 2019. The entities audited were the Offices of Operations and Systems
under the Offices of the Deputy Commissioners for Operations and Systems.

We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objective. We believe the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objective.




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                          B-1
                       – SAMPLING METHODOLOGY AND RESULTS
We obtained a data extract from the Social Security Administration’s (SSA) Master Beneficiary
Record of 21,770 beneficiaries over age 70 who were in suspended pay status for at least
24 months for address, whereabouts unknown, or failure to return the foreign enforcement
questionnaire between January 2008 and June 2016. From the data extract, we identified a
population of 11,922 beneficiaries with a U.S. address and 9,848 beneficiaries with a foreign
address. From each population, we selected a random sample of 100 beneficiaries for review.

                               Table C–1: Populations and Sample Sizes
                               Number of Beneficiaries with a                Number Beneficiaries with a
        Description
                                      U.S. Address                               Foreign Address
   Population Size                        11,922                                      9,848
   Sample Size                               100                                        100

Beneficiaries with a U.S. Address in Suspense 7 Years or Longer
Our review of 100 aged beneficiaries with a U.S. address found that 30 were in suspended pay
status for 7 years or longer. SSA did not terminate their benefits because it does not apply its
presumption of death policy to beneficiaries it could not locate and whose payments it had
suspended for address reasons. These beneficiaries had $490,966 in suspended benefits since
their presumed date of death that was at risk of being issued to someone other than the
beneficiary. Projecting these results to our population, we estimate that SSA did not terminate
benefits for approximately 3,577 beneficiaries it could not locate and whose payments it
suspended for 7 years or longer. These beneficiaries had approximately $58.5 million in
suspended benefits since their presumed date of death that was at risk of being issued to someone
other than the beneficiary. Table C–2 provides the details of our sample results and statistical
projections.

        Table C–2: Beneficiaries with a U.S. Address in Suspense 7 Years or Longer
 Description                            Number of Beneficiaries              Amount of Suspended Benefits
 Sample Results                                    30                                      $490,966
 Point Estimate                                3,577                                    $58,532,967
 Projection - Lower Limit                      2,685                                    $39,611,627
 Projection - Upper Limit                      4,576                                    $77,454,306
Note:   All statistical projections are at the 90-percent confidence level




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                  C-1
Beneficiaries with a Foreign Address in Suspense 7 Years or Longer
Our review of 100 aged beneficiaries with a foreign address found that SSA suspended benefits
for 23 whose whereabouts were unknown and 6 for address reasons. SSA did not locate, or
determine the whereabouts for, any of the 29 beneficiaries. These beneficiaries had $577,676 in
suspended benefits since their presumed date of death that were at risk of being issued to
someone other than the beneficiary. Projecting these results to our population, we estimate SSA
did not terminate benefits for approximately 2,856 beneficiaries it could not locate and whose
payments it suspended for 7 years or longer. SSA did not have controls to identify and terminate
benefits for beneficiaries whose payments remained in suspense with their address or
whereabouts unknown for at least 7 years. SSA also stated its presumption of death policy does
not apply to beneficiaries it could not locate whose payments it had suspended for address
reasons. These beneficiaries had approximately $56.9 million in suspended benefits since their
presumed date of death that was at risk of being issued to someone other than the beneficiary.
Table C–3

        Table C–3: Beneficiaries with a Foreign Address in Suspense 7 Years or Longer
 Description                             Number of Beneficiaries              Amount of Suspended Benefits
 Sample Results                                     29                                      $577,676
 Point Estimate                                  2,856                                   $56,889,572
 Projection - Lower Limit                        2,130                                   $35,494,939
 Projection - Upper Limit                        3,676                                   $78,282,204
Note:    All statistical projections are at the 90-percent confidence level

Evidence of SSA’s Efforts to Locate Beneficiaries Who Had a
U.S. Address
Our review of 100 aged beneficiaries with a U.S. address found there was no evidence that SSA
employees attempted to locate the whereabouts of 52 beneficiaries who were in suspended pay
status from 2 to 7 years. These beneficiaries had accumulated approximately $2.5 million in
suspended benefits. Projecting these results to our population, we estimate that approximately
6,199 beneficiaries had $302.9 million in suspended benefits. Table C–4 provides the details of
our sample results and statistical projections.

Table C–4: No Evidence of SSA’s Efforts to Locate Beneficiaries Who Had a U.S. Address
 Description                           Number of Beneficiaries                Amount of Suspended Benefits
 Sample Results                                   52                                      $2,540,635
 Point Estimate                                6,199                                    $302,894,469
 Projection - Lower Limit                      5,170                                    $234,668,984
 Projection - Upper Limit                      7,219                                    $371,119,954
Note:    All statistical projections are at the 90-percent confidence level




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                                C-2
Evidence of SSA’s Efforts to Locate Beneficiaries Who Had a
Foreign Address
Our review of 100 aged beneficiaries with a foreign address found there was no evidence that
SSA employees attempted to locate the whereabouts of 33 beneficiaries who were in suspended
pay status from 2 to 7 years. These beneficiaries had accumulated $807,947 in suspended
benefits. Projecting these results to our population, we estimate that approximately
3,250 beneficiaries had $79.6 million in suspended benefits. Table C–5 provides the details of
our sample results and statistical projections.

        Table C–5: No Evidence of SSA’s Efforts to Locate Beneficiaries Who Had a
                                    Foreign Address
 Description                           Number of Beneficiaries               Amount of Suspended Benefits
 Sample Results                                   33                                       $807,947
 Point Estimate                                3,250                                    $79,566,601
 Projection - Lower Limit                      2,489                                    $55,289,297
 Projection - Upper Limit                      4,087                                   $103,843,905
Note:   All statistical projections are at the 90-percent confidence level




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                               C-3
                                – AGENCY COMMENTS




                                           SOCIAL SECURITY

 MEMORANDUM


Date:      July 18, 2019                                                               Refer To:   S1J-3

To:        Gail S. Ennis
           Inspector General



From:      Stephanie Hall
           Acting Deputy Chief of Staff

Subject:   Office of the Inspector General Draft Report, “Follow-up: Aged Beneficiaries Whose Benefits
           Have Been Suspended for Address, Whereabouts Unknown, or Foreign Enforcement” (A-09-16-
           50077) -- INFORMATION


           Thank you for the opportunity to review the draft report. Please see our attached comments.

           Please let me know if we can be of further assistance. You may direct staff inquiries to
           Trae Sommer at (410) 965-9102.




           Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                       D-1
SSA COMMENTS ON THE OFFICE OF THE INSPECTOR GENERAL DRAFT
REPORT, “FOLLOW-UP: AGED BENEFICIARIES WHOSE BENEFITS HAVE BEEN
SUSPENDED FOR ADDRESS, WHEREABOUTS UNKNOWN, OR FOREIGN
ENFORCEMENT” (A-09-16-50077)

GENERAL COMMENTS

We currently suspend benefits when we are unable to locate a beneficiary, obtain a current
address, or the beneficiary fails to return a foreign enforcement questionnaire (FEQ). When a
beneficiary’s whereabouts are unknown, we terminate benefits after seven years based on a
presumption of death. However, if we are unsuccessful in obtaining a current address for the
beneficiary, we suspend the benefits and currently, we do not follow the same presumption of
death and termination policies. We plan to update our policy to ensure we treat all of these
suspension cases consistently and terminate benefits after seven years based on presumption of
death.

Since your 2011 audit, we also revised our policy to improve the integrity of this
workload. First, we require technicians to verify a suspended beneficiary’s identity and
continuing eligibility to benefits before reinstating payments. Secondly, we convert records
suspended for failure to return the FEQ to a whereabouts unknown status after 12 months of
suspension. With this conversion, technicians then follow the whereabouts unknown policy and
terminate benefits after seven years based on presumption of death.

Our response to the recommendations are below.

Recommendation 1

Revise its policy to terminate benefits for beneficiaries it could not locate and whose payments it
had suspended for address reasons.

Response

We agree.

Recommendation 2

Terminate benefits for the 59 beneficiaries identified by our audit.

Response

We agree.




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                       D-2
Recommendation 3

Identify and terminate benefits for the estimated 6,374 beneficiaries identified by our current
audit who could not be located and whose benefits were suspended for 7 years or longer.

Response

We agree.

Recommendation 4

Identify and take appropriate action for the 20,710 beneficiaries identified by our 2011 audit
whose benefits remained in suspense.

Response

We agree.

Recommendation 5

Implement controls to identify and terminate benefits to beneficiaries whose benefits were
suspended for address or whereabouts unknown for 7 years or longer.

Response

We agree.

Recommendation 6

Ensure it documents efforts to locate beneficiaries suspended for address, whereabouts unknown,
or foreign enforcement.

Response

We agree.

Recommendation 7

Implement controls to ensure employees change the payment status to whereabouts unknown
when they cannot locate a beneficiary who did not return the FEQ.

We agree.




Follow-up: Aged Beneficiaries in Suspended Payment Status (A-09-16-50077)                         D-3
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