    Supplemental Security Income: SSA Could Enhance Its Ability to
    Detect Residency Violations (29-JUL-03, GAO-03-724).

    The Supplemental Security Income (SSI) program paid about $35
    million recipients in 2002. In recent years, the Social Security
    Administration (SSA) has identified a general increase in the
    amount of annual overpayments made to (1) individuals who are
    found to have violated program residency requirements or (2)
    recipients who leave the United States and live outside the
    country for more than 30 consecutive days without informing SSA.
    This problem has caused concern among both program administrators
    and policy makers. As such, GAO was asked to determine what is
    known about the extent to which SSI benefits are improperly paid
    to individuals who are not present in the United States and to
    identify any weaknesses in SSA's processes and policies that
    impede the agency's ability to detect and deter residency
    violations.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-724
        ACCNO:   A07692
      TITLE:     Supplemental Security Income: SSA Could Enhance Its
    Ability to Detect Residency Violations
         DATE:   07/29/2003
      SUBJECT:   Eligibility determinations
    	     Overpayments
    	     Residences
    	     Social security benefits
    	     Program abuses
    	     Eligibility criteria
    	     Internal controls
    	     Supplemental Security Income Program

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    GAO-03-724

    Report to the Chairman, Subcommittee on Human Resources, Committee on Ways
    and Means, House of Representatives

    United States General Accounting Office

    GAO

    July 2003 SUPPLEMENTAL SECURITY INCOME

    SSA Could Enhance Its Ability to Detect Residency Violations

    GAO- 03- 724

    Overpayments resulting from residency violations totaled about $118
    million between 1997 and 2001. However, this figure, which represents only
    violations detected by SSA, likely understates the true level of the
    problem. Additionally, the extent of violations appears to vary by
    geographic region, with overpayments being more prevalent in several large
    metropolitan areas. GAO found that 54 percent of all overpayments detected
    by SSA during this period occurred in just 15 counties. In addition, GAO
    found that recipients

    born outside the United States accounted for at least 87 percent of all
    residency overpayments. SSA*s ability to detect and deter residency
    violations is impeded by three

    kinds of weaknesses. First, the agency relies heavily on self- reported
    information from recipients to determine domestic residency, often without
    independently verifying such information. Second, SSA makes insufficient
    use of existing tools to detect violations, such as its *risk analysis*
    system, redeterminations, and home visits. Finally, the agency has not
    adequately pursued independent sources of information from other federal
    agencies or private organizations to detect nonresidency of SSI
    recipients. GAO recognizes that the SSI program is complex to administer,
    and residency requirements are particularly difficult to enforce because
    they can

    necessitate time- consuming, labor- intensive verification checks, such as
    home visits. However, SSA has not employed a systematic, comprehensive
    approach to this problem that would allow the agency to use its available
    systems and procedures more efficiently and reduce the program*s exposure
    to additional violations.

    Top 15 Counties for SSI Residency Overpayments (1997- 2001) New York

    Queens New York Kings Bronx

    New Jersey

    Passaic

    Illinois

    Cook

    California

    San Francisco Alameda San Mateo Santa Clara Los Angeles Riverside Orange
    San Diego

    Florida

    Dade Source: GAO.

    The Supplemental Security Income (SSI) program paid about $35 billion in
    benefits to about 6. 8 million recipients in 2002. In recent years, the
    Social Security Administration (SSA) has identified a general increase in
    the amount of annual overpayments made to (1) individuals who are found to
    have

    violated program residency requirements or (2) recipients who leave the
    United States and live outside the country for more than

    30 consecutive days without informing SSA. This problem has caused concern
    among both program administrators and policy makers. As such, GAO was
    asked to determine what is known about the extent to which SSI benefits
    are improperly paid to individuals who are not present in the United
    States and to identify any weaknesses in SSA*s processes and policies that

    impede the agency*s ability to detect and deter residency violations.

    GAO is making recommendations to the Commissioner of Social Security that
    will allow the agency to make optimal use of existing

    tools and new data sources to better detect potential residency violators.
    Social Security generally agreed with GAO*s recommendations, but
    identified some challenges to their

    implementation.

    www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 724. To view the full report,
    including the scope and methodology, click on the link above. For more
    information, contact Robert E. Robertson (202) 512- 7215 or RobertsonR@
    gao. gov. Highlights of GAO- 03- 724, a report to the

    Chairman, Subcommittee on Human Resources, Committee on Ways and Means,
    House of Representatives

    July 2003

    SUPPLEMENTAL SECURITY INCOME

    SSA Could Enhance Its Ability To Detect Residency Violations

    Page i GAO- 03- 724 Supplemental Security Income Letter 1 Results in Brief
    3 Background 4 SSA Detected Overpayments of $118 Million for Residency

    Violations over 5 Years, but More May Go Undetected 6 Reliance on Self-
    Reported Information and Other Vulnerabilities Impede SSA*s Ability to
    Detect and Deter Violations 14 Conclusions 23 Recommendations 24 Agency
    Comments and Our Evaluation 25 Appendix I Scope and Methodology 27

    Appendix II Comments from the Social Security Administration 31 GAO
    Comments 36 Appendix III GAO Contacts and Staff Acknowledgments 37

    GAO Contacts 37 Staff Acknowledgments 37 Related GAO Products 38

    Tables

    Table 1: Variables That Indicate a Recipient May Potentially Be Out of the
    United States 29 Table 2: Odds Ratios for the Variables in Our Logistical
    Regression

    Analysis 30 Figures

    Figure 1: Top 15 Counties for SSI Residency Overpayments, 1997- 2001 9
    Figure 2: Top 15 Countries of Origin for SSI Residency

    Overpayments, 1997- 2001 12 Contents

    Page ii GAO- 03- 724 Supplemental Security Income Abbreviations

    ATM automated teller machines CMS Centers for Medicare and Medicaid
    Services DHS Department of Homeland Security INS Immigration and
    Naturalization Service OIG Office of Inspector General SSA Social Security
    Administration SSI Supplemental Security Income

    This is a work of the U. S. Government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. It may contain
    copyrighted graphics, images or other materials. Permission from the
    copyright holder may be necessary should you wish to reproduce copyrighted
    materials separately from GAO*s product.

    Page 1 GAO- 03- 724 Supplemental Security Income July 29, 2003 The
    Honorable Wally Herger Chairman, Subcommittee on Human Resources

    Committee on Ways and Means House of Representatives

    Dear Mr. Chairman: The Supplemental Security Income (SSI) program is the
    nation*s largest cash assistance program for the poor. The program paid
    about $35 billion in benefits to about 6.8 million aged, blind, and
    disabled recipients in 2002. 1 Most SSI recipients are also eligible to
    receive medical benefits under the Medicaid program. 2 Benefit eligibility
    and payment amounts for the SSI population are determined by complex and
    often difficult to verify factors such as an individual*s living
    arrangements, including whether an individual resides in the United
    States. Individual circumstances such as permanent residence may change
    frequently, requiring staff to regularly reassess recipients* eligibility
    for benefits. Thus, the SSI program tends to be difficult, time-
    consuming, and labor- intensive to administer. The program*s complexity
    has also made it susceptible to overpayments. 3 In recent years, the
    Social Security Administration (SSA) has identified a general increase in
    the amount of annual overpayments made to (1)

    individuals who are found to have violated program residency requirements
    or (2) recipients who leave the United States 4 and live outside the
    country for more than 30 consecutive days without informing

    1 This figure includes $30 billion in federal funds and $4.7 billion in
    state funded supplemental funds. 2 In a 1999 report, we estimated that the
    combined federal cost for SSI and Medicaid benefits is $122,000 per
    recipient over the next 10 years. U. S. General Accounting Office,
    Supplemental Security Income: Additional Actions Needed to Reduce Program

    Vulnerability to Fraud and Abuse, GAO/ HEHS- 99- 151 (Washington, D. C.:
    Sept. 15, 1999). 3 In 2001, outstanding SSI debt and newly detected
    overpayments for the year totaled $4.7 billion. 4 For SSI eligibility
    purposes, the United States is defined as one of the 50 states, the
    District of Columbia, and the Northern Mariana Islands. Residents of
    Puerto Rico are not eligible for SSI.

    United States General Accounting Office Washington, DC 20548

    Page 2 GAO- 03- 724 Supplemental Security Income SSA. This problem, which
    we refer to as a *residency violation,* has caused concern among both
    program administrators and policy makers. 5 Because of your interest in
    the SSI program*s potential vulnerability to

    residency violations, you asked us to (1) determine what is known about
    the extent to which SSI benefits are improperly paid to individuals who
    are not present in the United States and (2) identify any weaknesses in
    SSA*s processes and policies that impede the agency*s ability to detect
    and deter residency violations. To answer these questions, we reviewed SSI
    performance data, prior reports by SSA and its Office of Inspector General
    (OIG), and our prior work on the SSI program. We analyzed SSI payment data
    over a 5- year period between 1997 and 2001 and examined cases in which
    SSA identified recipients who were residing outside the country. In
    addition, we developed and tested a statistical model to help predict

    whether certain SSI recipients were more likely than others to have
    residency violations. Finally, we conducted in- depth interviews with more
    than 150 management and line staff from SSA*s headquarters; its regional
    offices in Atlanta, Chicago, Dallas, New York, and San Francisco; 17 field
    offices; as well as officials from other federal agencies, including the
    former Immigration and Naturalization Service (INS) 6 and the Centers for
    Medicare and Medicaid Services. During our meetings, we documented
    management and staff views on how extensive residency violations are in
    the SSI program; the effectiveness of current procedures and processes for

    detecting and preventing residency violations; and potential improvements
    to existing program processes, policies, and systems. We performed our
    work from September 2002 through May 2003 in accordance with generally
    accepted government auditing standards.

    5 For purposes of this report, we do not distinguish between two related
    statutory requirements for SSI eligibility* presence in the United States
    and United States residence. The presence requirement states that a
    recipient is not eligible for SSI if the recipient is outside the country
    for 30 consecutive days or more. However, a recipient may retain
    eligibility if they are temporarily outside the country for less than 30
    consecutive days. The residency requirement states that an individual must
    establish a dwelling in the United

    States with the intent to continue to live in the country. The rules for
    determining whether an individual meets the physical presence requirement
    are outlined at 20 C. F. R. S: 416.215 and S: 416. 1327. The rules for
    determining whether an individual meets the residency

    requirement are outlined at 20 C. F. R. S: 416.202( b), S: 416.1329, and
    S: 416.1603. 6 The INS is currently being divided into three separate
    bureaus within the Department of Homeland Security.

    Page 3 GAO- 03- 724 Supplemental Security Income SSA detected overpayments
    of $118 million for residency violations between 1997 and 2001, but
    interviews with OIG and agency officials

    suggest that the agency detects only a portion of the violations that
    occur each year, at least in some parts of the country. Prior studies and
    special projects by SSA and its OIG show that residency violations are a
    pervasive

    problem in some field offices. Additionally, the extent of violations
    appears to vary by geographic region, with overpayments being more
    prevalent in several large metropolitan areas. In particular, we found
    that 54 percent of all overpayments detected by SSA during this period
    occurred in just 15 counties in five states* California, Florida,
    Illinois, New Jersey, and New York. Finally, we found that recipients born
    outside the United States accounted for at least 87 percent of all
    residency overpayments.

    Three kinds of weaknesses impede SSA*s ability to detect and deter
    residency violations: The agency (1) relies heavily on self- reported
    information from recipients to verify domestic residency; (2) makes
    insufficient use of its existing tools to detect violations; and (3) has
    not pursued independent sources of information to detect nonresidency of
    SSI recipients. First, in asking SSI recipients about their current
    residence, field staff often rely on recipients* own assertions and may
    accept only minimal documentation from them, such as rent receipts and
    statements from neighbors or clergy. Recipients who wish to misreport
    their residency can manipulate such documents. Second, the agency makes
    limited use of tools at its disposal to detect possible violators. For
    example, while SSA routinely employs a risk analysis system to identify
    SSI recipients who are more likely to incur overpayments, it does not use
    this tool to specifically consider and target potential residency
    violators. A

    model we developed and tested to predict residency violations* that
    includes characteristics such as prior violations, use of post office
    boxes, and birth outside the United States* suggests that SSA could, in
    fact, make better use of its risk analysis system to detect and prevent
    residency

    violations. Additionally, while we found that home visits are being
    utilized as part of redetermination reviews in some of the offices we
    visited and are cost- effective, SSA has not systematically implemented
    this tool in other offices. Other tools the agency has made only limited
    use of are monetary penalties and administrative sanctions, such as loss
    of benefits. Several field staff told us they rarely employ either,
    because monetary penalties are too small to deter potential violators, and
    administrative sanctions involve a time- consuming and cumbersome process.
    Finally, SSA has not adequately pursued the use of independent, third-
    party data

    such as recipient bank account information to help detect residency
    violations. Although SSA is currently working with an independent Results
    in Brief

    Page 4 GAO- 03- 724 Supplemental Security Income contractor to obtain
    access to SSI recipients* financial data, the agency plans to use the
    information only to verify their financial resources. It does

    not plan to use the information to detect those who may be living and
    making financial transactions outside the United States for extended
    periods of time. Detecting residency violations in a cost- effective
    manner presents particularly difficult challenges. However, we believe
    that there are a number of opportunities that SSA can take advantage of,
    and accordingly, we are recommending that the Commissioner of Social
    Security direct the

    agency to make optimal use of existing tools while exploring new data
    sources to better detect potential residency violators.

    Social Security generally agreed with our recommendations, but also
    identified some challenges to their implementation.

    SSI provides financial assistance to people who are age 65 or older, blind
    or disabled, and who have limited income and resources. The program
    provides individuals with monthly cash payments to meet basic needs for
    food, clothing, and shelter. In 2002, about 6.8 million recipients were
    paid about $35 billion in SSI benefits.

    Individuals may apply for SSI benefits at any of about 1,300 SSA field
    offices. During the initial interview, SSA staff solicit information on
    applicants* financial situation and the disability being claimed.
    Applicants are required to report any information that may affect their
    eligibility for benefits, such as income, resources, and their living
    arrangements (including current residence). Similarly, once individuals
    receive SSI benefits, they are required to report changes in their address
    or residence to SSA in a timely manner. The Social Security Act (Section
    1614

    (a)( 1)( B)( i)) requires that an individual be a resident of the United
    States to be eligible for SSI payments. SSA guidelines define a resident
    of the United States as a person who has established a dwelling in the
    United States with the intent to live in the country. Section 1611( f) of
    the act also stipulates that no individual is eligible for SSI payments
    for any month during all of which the individual is outside the United
    States. Further, an individual who is outside the United States for 30
    consecutive days cannot be eligible for SSI benefits until he or she has
    been back in the United

    States for 30 days. Recipients who fail to establish residency in
    accordance with SSI program guidelines, or do not report absences of 30
    consecutive days or more, may be subject to overpayments, monetary
    penalties, and administrative sanctions such as suspension of benefits.
    Similarly, SSI Background

    Page 5 GAO- 03- 724 Supplemental Security Income recipients who become
    ineligible for SSI benefits because they violate SSI residency guidelines
    may also be ineligible to receive Medicaid benefits. To a significant
    extent, SSA depends on program applicants and current

    recipients to accurately report important eligibility information. To
    verify this information, SSA may use computer matches to compare SSI
    records against recipient information in records of third parties such as
    other federal agencies. SSA also periodically conducts *redetermination*
    reviews to verify important eligibility factors such as income and
    resources to determine whether recipients remain eligible for benefits
    after the initial assessment. Recipients are reviewed at least every 6
    years, but reviews may be conducted more frequently if SSA determines that

    changes in eligibility are likely. To determine which recipients should
    receive more frequent reviews, SSA uses a risk analysis system 7 to
    identify recipients who may be more likely to incur overpayments. Those
    identified as *high- risk* generally have a redetermination conducted at
    least annually by SSA field office staff who contact the recipient in
    person or by phone, while lesser- risk redetermination reviews (such as
    those designated *lowrisk*) may only be conducted once every several years
    by mail. In addition, SSA uses *limited issue* redetermination reviews to
    review a specific factor that may affect a recipient*s eligibility, such
    as income or current residence. These reviews tend to be less time-
    consuming and labor intensive for field staff to perform than *full*
    redetermination reviews, which often require an examination of numerous
    eligibility factors.

    In recent years, detected overpayments from residency violations increased
    from about $13.7 million in 1995 to about $22 million in 2001, reaching a
    high of almost $27 million in calendar year 2000. 8 In addition, the
    number of individuals SSA detected receiving SSI benefits while outside
    the United States increased from about 44,000 recipients in 1997 to almost
    49,000 recipients in 2001.

    7 We use the term *risk analysis system* to describe SSA*s statistical
    redetermination profiling system used to identify SSI recipients who are
    more likely to incur overpayments. 8 SSA reported about $13.7 and $15.5
    million in residency overpayments for 1995 and 1996, respectively.
    However, the 1995 and 1996 total dollars of residency overpayments were
    reported on a fiscal year basis. SSA reported overpayment data for 1997 to
    2001 on a calendar year basis for our report. While a direct comparison
    cannot be made because of differences in reporting periods, the data show
    that residency overpayments have been increasing over time.

    Page 6 GAO- 03- 724 Supplemental Security Income SSA detected overpayments
    of $118 million for residency violations between 1997 and 2001, but
    interviews with OIG and SSA officials suggest

    that the agency detects only a portion of the violations that occur each
    year, at least in some parts of the country. Special initiatives of
    limited duration conducted by SSA and its OIG have uncovered additional
    residency overpayments. According to our own analysis of SSA*s data,
    residency overpayments appear to vary by geographic region, with the
    majority of overpayments having been detected in several large
    metropolitan areas. Finally, we determined that most of the overpayments
    detected during this period were attributable to recipients who were born
    outside the United States.

    SSA detected an average of about 46, 000 recipient residency violations
    annually between 1997 and 2001, resulting in $118 million in overpayments.
    While SSA*s data show that less than 1 percent of all SSI recipients
    violate residency requirements annually, SSA field staff and OIG officials
    suggest that the problem may be more prevalent. For example, staff and
    managers from field offices in several SSA regions estimated that over 40
    percent of all recipients are in violation of residency requirements at
    some point. A small number of staff told us that as much as 90 percent of
    recipients served by their office may be involved in such violations.
    Other staff said that while the problem is more pervasive than SSA
    currently detects, it is difficult to estimate the true extent of the
    problem because the agency relies heavily on recipients to self- report
    absences from the country. In addition, a number of OIG officials we spoke
    with told us that residency violations are significantly higher than SSA
    currently detects; one official familiar with this problem estimated that
    as much as 70 percent of SSI recipients in some areas close to the
    southern border of the United States improperly receive benefits outside
    the country.

    Over the past few years, SSA and its OIG have initiated a number of
    projects that uncovered additional residency violations and overpayments.
    Although there is no empirical data to determine the true level of
    residency violations nationwide, these studies have estimated that
    residency violations in certain regions of the country may represent as
    much as 26 percent of SSI cases in those areas. These initiatives, which
    were limited in duration and were performed within specific geographic
    areas, include the following:

     A 1997 SSA and OIG joint study of SSI residency used home visits in
    southern California to identify potential residency violations. The study
    concluded that about 25 percent of SSI recipients in 1 field office were
    living outside of the country. The study also determined that 47 percent
    of SSA Detected Overpayments of

    $118 Million for Residency Violations over 5 Years, but More May Go
    Undetected

    Residency Violations May Be More Prevalent than SSA Currently Detects

    Page 7 GAO- 03- 724 Supplemental Security Income SSI recipients from this
    field office could not be located at their reported residence, an
    indication that they may be violating residency requirements.

     A 1998 OIG eligibility study in El Paso, Texas, found that about 26
    percent of recipients investigated were violating residency requirements.
    This project identified a total of about $3 million in residency
    overpayments.

     In 1998 and 1999, joint SSA/ OIG studies examined 32,641 recipients in
    New York and California who had not used their Medicaid benefits for at
    least 1 year. 9 Using redetermination reviews, these studies found that
    1,281 recipients (about 4 percent) were living outside the United States.
    10  A 2002 SSA residency verification project in 5 South Florida field
    offices

    used a targeted sample of 750 noncitizen recipients that uncovered a total
    of over $107, 000 in additional residency overpayments. Staff performed
    special redetermination reviews in which recipients were required to
    produce a valid passport as proof of continuing residency in the United
    States and found 46 recipients (6 percent) violating residency
    requirements.

     A 2002 OIG address verification project in New York uncovered 205
    recipients violating SSI residency requirements resulting in a total of
    about $262,000 in overpayments. These recipients were found to be
    receiving both SSI and Title II Social Security benefits at addresses in
    two different countries. The study also found that SSA*s automated
    controls and special projects did not identify SSI recipients who had
    their benefits direct deposited into banks in Puerto Rico or the U. S.
    Virgin Islands.

    While the results of these projects suggest that the problem is more
    pervasive than the 1 percent of recipients that SSA*s data show, SSA has
    not systematically implemented similar projects in other areas that might
    benefit from these efforts.

    9 The rationale for targeting these cases was that financially needy
    individuals who were aged or disabled are likely to use Medicaid services
    on a regular basis. Thus, SSI recipients who have not used Medicaid for
    long periods of time may have left the United States or died.

    10 These studies considered the effect of only one potential indicator on
    residency violations* Medicaid nonutilization.

    Page 8 GAO- 03- 724 Supplemental Security Income Our analysis of SSA*s
    data also shows that overpayments due to residency violations are more
    prevalent in a number of large metropolitan areas. For

    example, overpayments from violations detected in Los Angeles County,
    California, represented 10.5 percent of the nation*s SSI residency
    overpayments between 1997 and 2001. Overall, our analysis indicates that
    just 15 counties in five states* California, Florida, Illinois, New
    Jersey, and New York* accounted for 54 percent of all residency
    overpayments detected by SSA during this period. (See fig. 1.) In addition
    to Los Angeles County, other counties with a significant percentage of SSI
    residency

    overpayments include Queens County, New York (5.2 percent); New York
    County, New York (5.0 percent); Kings County, New York (4.8 percent); San
    Diego County, California (4.1 percent); and Bronx County, New York (3.5
    percent). Moreover, of approximately 3,000 counties in the United States,
    50 accounted for 77 percent of all residency overpayments detected by SSA
    during this time. Many Violations Are

    Geographically Concentrated

    Page 9 GAO- 03- 724 Supplemental Security Income Figure 1: Top 15 Counties
    for SSI Residency Overpayments, 1997- 2001 New York

    Queens New York Kings Bronx

    New Jersey

    Passaic Illinois

    Cook

    Florida

    Dade

    California

    San Francisco

    Overpayments (millions of dollars)

    $ 12.4 $ 6.2 $ 5.9 $ 5.7 $ 4.9 $ 4.2 $ 3.9 $ 3.9 $ 3.3 $ 2.9 $ 2.7 $ 2.5 $
    2.2 $ 1.6 $ 1.5 Los Angeles, Calif.

    Queens, N. Y. New York, N. Y. Kings, N. Y. San Diego, Calif. Bronx, N. Y.
    Orange, Calif. Santa Clara, Calif. Dade, Fla. Cook, Ill. San Francisco,
    Calif. Alameda, Calif. Passaic, N. J. San Mateo, Calif. Riverside, Calif.

    Source: GAO.

    County

    Alameda San Mateo Santa Clara Los Angeles Riverside Orange San Diego

    Page 10 GAO- 03- 724 Supplemental Security Income SSA*s data also show
    that individuals born outside the United States accounted for at least 87
    percent of all SSI residency overpayments

    between 1997 and 2001. 11 Residency overpayments were most common among
    recipients who were born in Latin America, the Caribbean, and South/
    Southeast Asia, but included other areas as well, such as the Middle East.
    (See fig. 2.) Recipients from the Philippines accounted for the greatest
    amount of residency violations or $24 million of all SSI residency
    overpayments during this period. SSA data also show that recipients from
    just 14 countries and one United States territory accounted for about 73
    percent of all residency overpayments during this period. In addition to
    the Philippines (20.2 percent), these include the Dominican Republic (12.3
    percent), Mexico (7.6 percent), Puerto Rico (7.5 percent), India (7.1
    percent), and Iran (3. 4 percent). Moreover, a prior study by SSA*s OIG
    found that SSI residency violations are more prevalent among recipients
    born outside the United States than for native- born citizens.
    Specifically, the OIG found that more than 20 percent of the recipients
    born outside the United States had periods of ineligibility because of
    absences from the United States, compared with 0.2 percent for native-
    born recipients.

    11 The percentage of total residency overpayments attributed to recipients
    born outside of the United States may be higher than 87 percent because
    SSA could not identify a specific country of birth for recipients that
    represent about $10 million in SSI overpayments. Most Overpayments Were

    Made to Recipients Born outside the United States

    Page 12 GAO- 03- 724 Supplemental Security Income Figure 2: Top 15
    Countries of Origin for SSI Residency Overpayments, 1997- 2001

    a Puerto Rico is a United States territory. Source: GAO.

    Mexico Haiti Dominican Republic Puerto Rico a El Salvador Columbia Peru
    Overpayments

    (millions of dollars)

    $ 14.5 $ 9.0 $ 5.9 $ 2.5 $ 1.6 $ 1.3 $ 1.2 Country of origin

    Dominican Republic Mexico Puerto Rico Haiti Columbia El Salvador Peru

    Page 13 GAO- 03- 724 Supplemental Security Income Philippines

    India Iran

    Vietnam China

    Korea Pakistan

    Taiwan

    Overpayments (millions of dollars)

    $ 24.0 $ 8.4 $ 4.1 $ 3.5 $ 3.4 $ 2.0 $ 1.3 $ 1.3 Philippines

    India Iran Vietnam China Korea Pakistan Taiwan

    Country of origin

    Page 14 GAO- 03- 724 Supplemental Security Income SSA*s ability to detect
    and deter residency violations is impeded by three kinds of weaknesses:
    dependence on self- reported information by clients,

    insufficient use of existing compliance tools, and a failure to pursue
    independent data sources for its verifications. First, the agency relies
    heavily on self- reported information from recipients to determine
    domestic residency, often without independently verifying such
    information. Second, to detect and deter residency violations, SSA makes
    insufficient use of its existing tools for program integrity, such as its
    risk analysis system to screen for high- risk cases. To test the
    feasibility of using the agency*s system to screen for residency
    violations, we developed and tested, with some success, a statistical
    model of factors that may be associated with such violations. SSA has also
    not made optimal use of redetermination reviews, home visits, monetary
    penalties, and administrative sanctions. Finally, the agency has not
    employed the use of

    independent data sources from other federal agencies or private
    organizations to detect nonresidency of SSI recipients.

    SSA relies heavily on self- reported information, such as documents and
    statements from recipients to establish proof of U. S. residency.
    According to SSA and OIG officials, however, this practice increases the
    SSI program*s vulnerability to residency fraud and abuse. Our prior work
    has shown that about 77 percent 12 of all payment errors in the SSI
    program were attributable to recipients who do not comply with reporting
    requirements. 13 In our current review, about half of SSA field staff we
    interviewed reported that they rely on recipients to self- report
    important information with respect to travel outside the United States.
    SSI program guidelines generally direct SSA staff to accept recipients*
    assertions concerning residency unless they have reason to question the
    accuracy of their statements. SSA staff also have discretion with respect
    to the types of

    documents they can accept to confirm that a recipient resides at a given
    address. For example, program guidelines direct field staff to obtain a
    combination of two or more documents as proof of initial residency.
    Acceptable documentation includes such things as rent receipts, utility
    bills, driver licenses, pay stubs, or mail addressed to the recipient. If
    SSA field staff have reason to believe that a recipient has been outside
    the

    12 This figure represents data from fiscal years 1991 through 1995. 13 U.
    S. General Accounting Office, Supplemental Security Income: Action Needed
    on LongStanding Problems Affecting Program Integrity, GAO/ HEHS- 98- 158
    (Washington, D. C.: Sept. 14, 1998). Reliance on SelfReported

    Information and Other Vulnerabilities Impede SSA*s Ability to Detect and
    Deter Violations

    SSA Relies Heavily on SelfReported Information That Can Be Manipulated

    Page 15 GAO- 03- 724 Supplemental Security Income country for more than 30
    days, or information in SSA records conflicts with recipients* statements,
    they may request additional documentation

    such as an airline ticket, passport (or similar evidence that establishes
    date of entry into the United States), or a signed statement from one or
    more U. S. residents, such as neighbors, clergy, or others who may have
    knowledge of the individual*s whereabouts. In general, program guidelines
    do not require field staff to perform any additional verification steps to
    establish recipients* residency during initial or post- entitlement
    eligibility reviews. 14 We were also told that some of the documents
    accepted by SSA as proof of

    residence are subject to manipulation or forgery. For example, staff in 1
    field office noted that documents such as rent receipts can be purchased
    from a local drugstore and easily forged. Other field staff said that
    statements from neighbors could be falsified or manipulated to support
    assertions that an individual has not traveled outside the country. Field
    staff also reported that recipients may use multiple passports in order to
    conceal extended stays outside the country. For example, staff in two SSA
    regions we visited said that SSI recipients sometimes use a foreign
    passport to exit and reenter the country while maintaining a separate,
    *clean* U. S. passport for evidence of continuing residency. One field
    office staff reported that some recipients have even paid foreign customs
    officials not to stamp their passport to conceal evidence that they were
    outside the country.

    Given the agency*s heavy reliance on self- reported information, we found
    that SSA field staff often relied on their personal experience, judgment,
    and ad hoc interviewing procedures to detect potential residency
    violations. In particular, SSA field staff look for inconsistencies in
    recipient*s statements or their inability to answer simple questions about
    where they live. For example, recipients may be asked about the names of
    people living in their household, or basic facts about their neighborhood
    such as the location of a well- known landmark. Field staff may also ask

    whether a recipient owns property outside the United States. Questionable
    14 SSI program guidance allows field staff to use home visits in selected
    circumstances, such as in response to a report from a third party that a
    recipient is outside the United States. In addition, home visits may be
    employed if a recipient fails to provide information requested by SSA
    staff, or if a recipient does not respond to letters and/ or telephone
    calls from staff asking them to appear at the local office. However,
    program guidelines give field office managers discretion in determining
    when to use home visits and allow them to take into consideration factors
    such as the safety of staff who perform such visits.

    Page 16 GAO- 03- 724 Supplemental Security Income or inconsistent answers
    to such questions may result in requests to provide additional
    documentation. However, the ability of staff to

    effectively identify violators often depends on the experience and
    persistence of individual staff. This is particularly true in the case of
    recipients who are *coached* by advocacy groups or others to provide false
    information to SSA in order to obtain or retain SSI benefits. For example,
    one official told us that they recently identified an SSI applicant who
    apparently was coached to provide false information to SSA

    regarding her residence in the United States. Upon further questioning,
    the recipient admitted that she was not residing continuously in the
    United States and had misreported her residency to SSA in order to obtain
    SSI benefits. In addition, field staff who were familiar with this problem
    told us that they sometimes look for suspicious documents that recipients
    may reveal during the course of an office visit, such as a foreign driver
    license or foreign voter registration card. One manager in a field office
    close to the

    Mexican border also noted that some field staff check address listings in
    Mexican telephone books or check the parking lot for cars with foreign
    license plates.

    Our review also found that the procedures for documenting recipients*
    residency vary widely among the offices we visited. In particular, the
    number and types of evidentiary documents requested by staff differed
    across the field offices we visited. While staff in several offices
    reported that they often request only the most basic documentation
    required by SSI program guidelines, staff in other offices told us that
    they routinely ask for additional documentation for recipients. For
    example, some field staff we interviewed noted that they ask recipients to
    provide a second passport or other documents (such as travel documents
    from foreign consular offices) to determine whether the individual has
    been outside the country for more than 30 days. While these steps are not
    required by SSI program guidelines, some field staff reported that they
    have been effective in identifying potential violators and deterring
    future violations. SSA staff reported a number of reasons for different
    documentation requirements such as variance in individual office policies,
    personal preferences based on experience, time pressures to complete
    cases, and the inability to effectively verify supplied documentation.

    SSA has not made optimal use of several tools that could be used to detect
    residency violations. These include its *risk analysis system* for
    screening cases more likely to result in overpayments, its
    *redetermination reviews* of recipients* eligibility, and home visits to
    verify recipients* whereabouts. Given its current focus on other types of
    program violations such as SSA Does Not Fully

    Exploit Its Tools for Detecting Program Violations

    Page 17 GAO- 03- 724 Supplemental Security Income excess income or
    resources, some staff told us that SSA*s risk analysis system is not
    entirely effective at identifying residency violators. SSA has

    used statistical risk analysis techniques for many years in the SSI
    program to identify recipients who are more likely to be overpaid. Since
    SSA lacks adequate staff resources to conduct an annual redetermination
    for every recipient, it routinely screens for and targets those
    participants who are most likely to have a change in their eligibility
    status or benefit amount. 15 Despite the proven effectiveness of its risk
    analysis system to help the

    agency detect cases with highest potential for overpayments, SSA has not
    used this tool to specifically identify residency violations. In fact, a
    number of field staff told us that, in their experience, residency
    violations

    frequently occur among SSI recipients who are designated as medium or low
    risk for payment errors by SSA*s system. The agency may not discover these
    violations for several years (if at all) unless it detects a change in a

    recipient*s circumstances that causes the individual to be designated as
    high risk.

    To determine whether it is possible for SSA to target potential residency
    violators more effectively using its existing systems, we developed and
    tested a statistical model of factors possibly associated with residency
    violations. 16 Based on our field work and prior SSA and OIG studies, we
    selected the following factors for testing: recipients born outside the
    United States, prior residency violations, payments made to post office
    boxes, direct deposit payments, and lack of response to agency inquiries
    or recipients with unknown whereabouts. 17 Using this model as a screen,
    we identified all recipients who were currently in violation of residency

    15 SSA*s risk analysis system incorporates about 48 different
    characteristics* or variables* to help the agency determine which
    recipients will be selected for annual redetermination reviews. Recipients
    identified as being at higher risk for overpayments are designated as high
    error profile cases and may be subject to more frequent reviews that
    entail personal contact with SSA field office staff. Those recipients
    identified as being less likely to incur

    an overpayment are designated as medium or low error profile and may only
    receive a redetermination conducted by mail rather than in person. Some
    low error profile cases are only examined once every 6 years. 16 The
    variables used in our model are not an exhaustive list of potential
    variables that SSA could use in its risk analysis system. They represent
    just a few of the characteristics that were frequently cited by prior
    reviews as well as SSA and OIG staff as potentially good predictors of
    residency violations.

    17 Another variable frequently cited as a potential indicator of residency
    violations* Medicaid nonutilization* was not included in our model because
    SSA does not currently have automated data on Medicaid nonusage by SSI
    recipients. However, SSA is negotiating access to such data with the
    Centers for Medicare and Medicaid Services.

    Page 18 GAO- 03- 724 Supplemental Security Income requirements as of April
    2003. 18 We found that recipients born outside the United States*
    noncitizens as well as naturalized citizens* were more

    than 40 times as likely to be violating residency requirements than were
    native- born recipients. Similarly, recipients with prior residency
    violations were about 10 times as likely to be current violators compared
    with recipients who have no prior violations. We also found that
    recipients who used post office boxes were somewhat more likely to be
    receiving benefits outside the country than those without post office
    boxes. Some of the

    other factors we considered, however, such as recipients who use direct
    deposit, and lack of response of agency inquiries, were less likely to be
    residency violators. Given the potential usefulness of this limited
    modeling

    demonstration, it may be possible for SSA to expand and refine its risk
    analysis system to better target potential violators. Beyond the targeting
    problems we identified with SSA*s risk analysis

    system, we found that the agency was not using redeterminations as
    efficiently as it could despite the fact that SSA*s data and our prior
    reviews have documented their effectiveness for verifying recipients*
    eligibility. 19 In particular, home visits are not used frequently enough
    during redetermination reviews according to staff in a number of offices
    we visited. Although a number of field staff who use home visits reported
    that it is a highly effective tool for verifying recipients* residency,
    SSA and OIG officials told us that this technique is not currently
    employed in some offices that could benefit from the practice. For
    example, while a number of field offices in two SSA regions we visited
    routinely use home visits, other offices in the same geographic area
    rarely use this tool. SSA officials and field office staff told us that a
    number of factors account for the variation in how frequently this
    technique is used. These include a lack of adequate staff resources in
    some offices, differences in the priorities of

    field office managers, and differences in how individual staff view the
    seriousness of the residency problem.

    18 SSI recipients with residency violations were compared against
    recipients with no violations. 19 SSA data show that, in 1998, refining
    the case selection methodology increased estimated overpayment benefits*
    amounts detected and future amounts prevented* by $99 million over the
    prior year. SSA officials have estimated that conducting substantially
    more redetermination reviews would yield hundreds of millions of dollars
    in additional overpayment benefits annually. U. S. General Accounting
    Office, Supplemental Security Income: Progress Made in Detecting and
    Recovering Overpayments, but Management Attention Should Continue, GAO-
    02- 849 (Washington, D. C.: Sept. 6, 2002).

    Page 19 GAO- 03- 724 Supplemental Security Income Those field offices that
    do carry out home visits as part of their redetermination procedures have
    found them effective. About half of the

    field offices we visited (9 of 17) routinely employ home visits at least
    some of the time to verify whether recipients actually live at the address
    they report to SSA. For example, SSA*s regional office in Dallas, Texas,
    currently contracts with a private investigation firm to conduct residency
    home visits. Using these investigators, field offices within the region
    performed 4,200 home visits that uncovered at least $2.1 million in
    additional overpayments between October 1997 and January 2003. According
    to SSA data, this project achieved a benefit- to- cost ratio of almost 8
    to 1. Similarly, the California Department of Health Services has worked
    cooperatively with SSA field offices in the San Diego area by

    conducting residency home visits. Because Medicaid eligibility is often
    directly tied to SSI eligibility, identifying residency violations may
    save funds from both programs. Between October 2000 and September 2002,
    state Medicaid investigators identified about 1,600 SSI recipients with
    residency violations. SSI staff in participating offices refer recipients
    suspected of violating residency guidelines to the Medicaid investigators,
    who subsequently perform unannounced home visits to establish the
    recipient*s residency. Both SSA and state officials we interviewed told us
    that this project has been effective at identifying residency violations
    that might not have been detected by the agency using standard
    verification

    procedures. For example, in April of 2002, state investigators discovered
    an SSI recipient who was using a residence in southern California as a
    mailing address. The investigators determined that this recipient had been
    residing in Tijuana, Mexico, for at least 8 years. Similarly, in June
    2002, state investigators found an SSI recipient using a post office box
    in southern California as a mailing address. Upon further examination, the
    investigators determined that the recipient had been living in San Felipe,
    Mexico, since 1982. In addition, in July 2002, state investigators
    identified

    two SSI recipients who improperly received SSI benefits while residing in
    Tijuana, Mexico, between August 1999 and April 2002. SSA estimates that
    these recipients were overpaid more than $40,000 during this time.
    Finally, because the state provides this service to SSA free of charge, it
    is highly cost- effective. In terms of deterring future violations, we
    found that monetary penalties and administrative sanctions are rarely, if
    ever, used in the offices we visited. 20 For example, about 72 percent of
    the field staff we interviewed

    20 Prior GAO reports indicate that monetary penalties and administrative
    sanctions may be underutilized in the SSI program. GAO- 02- 849.

    Page 20 GAO- 03- 724 Supplemental Security Income said that penalties or
    sanctions are not used in their offices, or are only used occasionally.
    National data on SSA*s use of monetary penalties and administrative
    sanctions also suggest that these tools are not routinely

    utilized for recipients who fail to report important information that can
    affect their eligibility, including absences from the country. For
    example, in a recent report, we estimated that at most about 3,500
    recipients were penalized for reporting failures in fiscal year 2001. 21
    Under the law, SSA may impose monetary penalties on recipients who do not
    file timely reports about factors or events that can affect their
    benefits. A penalty causes a reduction in 1 month*s benefits. Penalty
    amounts are $25 for a first occurrence, $50 for a second occurrence, and
    $100 for the third and subsequent occurrences. The penalties are meant to
    encourage recipients to file accurate and timely information so SSA can
    adjust its records to correctly pay benefits. However, a large number of
    staff we interviewed noted that monetary penalties are too low to be an
    effective deterrent against future residency violations. In addition, the
    Foster Care Independence Act of 1999 (Pub. L. No. 106- 169) gave SSA
    authority to impose administrative sanctions on persons who misrepresent
    material facts that they know, or should have known, were false or
    misleading. In these circumstances, SSA may suspend benefits for 6 months
    for the initial violation, 12 months for the second violation, and 24
    months for subsequent violations. Despite having this authority, we found
    that administrative sanctions such as benefit suspension are rarely if
    ever used by field staff for residency violators. Consistent with the
    results of our field work, a prior review shows that administrative
    sanctions were only imposed in 21 cases nationwide as of January 2002. 22
    A substantial number of staff told us that they rarely use this tool
    because the process for imposing administrative sanctions is often time-
    consuming and cumbersome. In addition, some staff reported that SSA
    management does not encourage the use of penalties or sanctions to deter
    residency

    violations. In response to recommendations we made in a recent report, SSA
    is currently evaluating its policies for imposing monetary penalties and
    administrative sanctions. 23 21 See GAO- 02- 849.

    22 Ibid. 23 Ibid.

    Page 21 GAO- 03- 724 Supplemental Security Income While SSA uses third-
    party information to verify certain aspects of recipients* eligibility
    such as income, we found that the agency lacks

    adequate outside data sources to detect potential residency violations. 24
    SSA is planning to conduct periodic computer matches with immigration
    databases to identify noncitizen SSI recipients who voluntarily report
    their planned absences from the country 25 or are deported from the United
    States. The agency currently receives periodic paper reports from
    immigration officials on noncitizens who have current and planned absences
    from the United States and sends them to the appropriate SSA field offices
    for follow up. However, these procedures are only effective for recipients
    who voluntarily report their absence to immigration officials. Thus, SSA
    will remain limited in its ability to independently verify the residency
    of SSI recipients who deliberately seek to conceal extended periods
    outside the country. Over half of the SSA managers and field staff we
    interviewed told us that access to automated immigration data would help
    them to more accurately verify recipients* residency.

    Despite this limitation, SSA has not adequately explored the potential for
    obtaining access to emerging data sources such as an entry- exit system
    being developed by the Department of Justice and the Department of
    Homeland Security (DHS). 26 This system is being implemented as a
    mechanism to monitor all major ports of entry/ exit in the United States,
    including land crossings, seaports, and airports. Once operational, this
    system will allow authorized federal agencies to collect, maintain, and
    share information on selected individuals who enter and exit the United
    States to ensure border security, among other purposes. Our work

    suggests that this system may also provide information that could help SSA
    determine when noncitizen SSI recipients exit the country for extended
    periods of time. We acknowledge that such databases could have limitations
    that affect their accuracy and completeness* especially given 24 For
    example, SSA routinely uses information from the Department of Health and
    Human Service*s National Directory of New Hires to verify SSI recipients*
    income.

    25 SSA expects to save approximately $28 million annually by implementing
    these matches and suspending benefits for recipients who are identified.
    26 A new system called the United States Visitor and Immigrant Status
    Indication

    Technology system is currently being developed by DHS and will incorporate
    existing entry- exit databases. SSA Has Not Actively

    Pursued Third- Party Data Sources to Detect Potential Violators

    Page 22 GAO- 03- 724 Supplemental Security Income problems that our prior
    work has identified with some immigration data. 27 Thus, SSA would likely
    have to determine the reliability and costeffectiveness of accessing such
    data before negotiating data sharing

    agreements and using the information for detecting potential residency
    violations.

    SSA has also not fully utilized its authority to obtain independent data
    from other sources, such as financial institutions, as a tool for
    detecting potential residency violations. The Foster Care Independence Act
    of 1999 granted SSA new authority to verify recipients* financial
    accounts. To implement this authority, SSA issued proposed regulations on
    its new processes for accessing financial data in May 2002. 28 These
    regulations, which were still in draft at the time of our report, may
    permit SSA to obtain a variety of financial records from banks, credit
    card companies, and other financial institutions, including those
    operating branches and automated teller machines (ATM) outside the United
    States. However,

    according to SSA officials, the agency only intends to use this
    information to verify recipients* bank account balances as a way of
    verifying their financial resources. SSA does not currently plan to use
    financial institution data more broadly to detect potential residency
    violations.

    Given the relatively narrow scope of SSA*s proposed use of financial data,
    the agency may be unnecessarily limiting its ability to detect residency
    violations. In particular, SSA may be missing potentially helpful sources
    of information such as data on recipients who conduct banking transactions
    outside the United States using ATMs. As noted previously, a large
    proportion of the residency overpayments SSA detected between 1997 and
    2001 were tied to recipients who originated in various countries in Latin
    America and South/ Southeast Asia. However, SSA currently has no way to
    identify recipients who withdraw SSI benefits from ATMs outside the

    United States. Information we obtained from a national financial data
    vendor indicates that it is now possible for authorized users to obtain
    detailed information on individuals* financial transactions from a large
    number of national and international institutions. Such data sources

    27 U. S. General Accounting Office, Illegal Immigration: INS Overstay
    Estimation Methods Need Improvement, GAO/ PEMD- 95- 20 (Washington, D. C.:
    Sept. 26, 1995) and Immigration Statistics: Information Gaps, Quality
    Issues Limit Utility of Federal Data to

    Policymakers, GAO/ GGD- 98- 164 (Washington, D. C.: July 31, 1998). 28 See
    Access to Information Held by Financial Institutions, 67 Fed. Reg. 22021
    (to be codified at 20 C. F. R. pt. 416) (proposed May 2, 2002).

    Page 23 GAO- 03- 724 Supplemental Security Income include basic
    information such as bank account balances from banks in the United States,
    as well as more sophisticated information such as ATM

    activity that is transmitted on the international telecommunications
    networks. Our review suggests that such data could provide SSA with a
    potentially powerful tool to identify residency violations. For example,
    SSA may be able to obtain data for recipients whose SSI benefits are
    direct deposited into a U. S. bank and then withdrawn from ATMs outside
    the country for extended periods of time. However, SSA does not currently
    plan to obtain access to direct deposit data from financial institutions
    or ATM networks that operate in other countries.

    SSA has made progress in addressing residency violations in recent years,
    especially through the special initiatives it has undertaken. However,
    many of these initiatives have been short- lived and limited to a small
    number of field offices. Thus, the agency*s approach to this problem has
    been generally ad hoc and restricted in scope. As a result, our review
    suggests that SSA identifies only a portion of the violations and
    resulting overpayments that occur each year. We recognize that the SSI
    program is complex to administer and residency requirements are
    particularly difficult to enforce because they can necessitate time-
    consuming, laborintensive verification checks, such as home visits.
    However, SSA has not employed a systematic, comprehensive approach to this
    problem that would allow the agency to use its available systems and
    procedures more efficiently and reduce the program*s exposure to
    additional violations. In particular, SSA has not reengineered its current
    systems and processes to make better use of limited budgetary and staff
    resources. For example, our review shows that minor modifications of its
    risk analysis system could help the agency identify recipients who are
    most likely to violate residency requirements. Without such modifications,
    however, it will be difficult for the agency to effectively target its
    redetermination reviews and incorporate home visits in a cost- effective
    manner.

    Additionally, SSA has not made sufficient use of independent, third- party
    data sources to help verify recipients* residency despite having
    successfully used such tools to verify other aspects of recipient
    eligibility,

    such as their income and other financial resources. SSA could improve SSI
    program integrity and reduce residency overpayments by exploring more
    creative use of technology, including the use of financial institution
    data to detect recipients who use ATMs for bank transactions outside the
    United

    States for extended periods of time. The agency may also benefit from
    pursuing other emerging data sources such as entry/ exit systems being
    developed by the Departments of Justice and Homeland Security, although
    Conclusions

    Page 24 GAO- 03- 724 Supplemental Security Income prior problems we have
    identified with immigration data may require SSA to determine the
    reliability of such databases. Ultimately, failure to implement a more
    strategic approach to this problem

    and to reengineer its existing processes may compromise the agency*s
    ability to use its limited resources in the most cost- effective manner.
    Moreover, failure to make optimal use of existing tools and access
    emerging data sources could leave SSI and other programs, such as
    Medicaid, vulnerable to continuing residency violations and additional
    overpayments.

    In order to further strengthen and increase SSA*s ability to detect SSI
    residency violations and reduce resulting overpayments due to recipient
    absences from the United States, we recommend that the Commissioner of
    Social Security take the following actions:

     Consider reengineering the agency*s risk analysis system to more
    specifically target potential residency violators. The list of potentially
    high- risk characteristics we have developed and tested could provide a
    starting point for such refinements. To accomplish this, SSA may wish to
    test the idea on a one- time basis using methods the agency deems
    appropriate to assess its effectiveness.

     Consider expanding the use of unannounced home visits in some areas as a
    way of verifying the residency of recipients whom the agency identifies as
    potentially being at high risk for violations. To ensure that

    only cases with a high potential for success are selected, any potential
    profile of high- risk recipients that SSA develops could be a primary
    source of referrals. To maximize limited staff resources, SSA should apply
    a strategic approach to this problem, recognizing that violations are not
    equally prevalent in all areas of the country.

     Study the feasibility of expanding the type of information SSA obtains
    from financial institutions as authorized by The Foster Care Independence
    Act of 1999 (Pub. L. No. 106- 169). Additional information to help
    identify violators could include bank and ATM withdrawal records to help
    identify SSI recipients who may be accessing their SSI benefits outside
    the United States for extended periods of time.

     Investigate the potential for obtaining access to emerging third- party
    data sources such as entry/ exit databases being developed by DHS to help
    field staff more accurately verify whether SSI recipients are violating
    program regulations. Recommendations

    Page 25 GAO- 03- 724 Supplemental Security Income We provided a draft of
    this report to SSA and DHS for review and comment. 29 SSA generally agreed
    with our recommendations, but noted

    some challenges to their implementation. While agreeing with each of our
    recommendations, SSA supplied additional information concerning its
    ability to implement these recommendations. With regard to our first
    recommendation to reengineer its risk analysis system to more specifically
    target potential residency violators, SSA agreed with the intent of the
    recommendation but expressed concern that including individuals born
    outside the United States as one risk factor could be considered
    discriminatory. As noted in our report, we suggest that this factor could
    be included as one of several different factors that the agency could use
    to refine its risk analysis

    system. We believe that such an approach could be implemented in a
    nondiscriminatory manner and would help SSA use its limited resources more
    efficiently. Moreover, as discussed in the report, our analysis suggests
    that this factor is a potentially powerful indicator of possible residency
    violations.

    With regard to our second recommendation to expand the use of unannounced
    home visits, SSA agreed that home visits are a useful tool for verifying
    SSI recipients* residency, but noted that costs and employee safety must
    be considered. We agree that these are important issues that SSA must
    consider as it studies how home visits can be used most effectively.
    Further, as we discuss in the report, some states have successfully used
    state personnel and private investigators to perform home visits. We also
    note that at least one state has found the use of private investigators to
    be cost- effective. Thus, we believe that SSA could look more closely at
    the experience of these states to identify potential best practices for
    conducting home visits.

    SSA also agreed with our third recommendation that the agency study the
    feasibility of expanding the type of information it obtains from financial
    institutions. SSA noted some potential legal and technical issues that
    will require further study by the agency. For example, SSA noted that
    financial records may not be an accurate basis for identifying recipients
    who are outside the country for more than 30 days. While we agree that
    definitively determining whether a recipient is outside the country for 30
    consecutive days or more presents a challenge for the agency, we only 29
    DHS did not provide formal comments. Agency Comments and Our Evaluation

    Page 26 GAO- 03- 724 Supplemental Security Income suggest that SSA could
    use financial institution data as a potential indicator of residency
    violations.

    Finally, with regard to our fourth recommendation, SSA agreed that there
    may be potential benefits to accessing external data sources to help
    verify recipients* residency. The agency indicated that it will explore
    the

    potential feasibility of using such data sources as part of its SSI
    Corrective Action Plan. SSA*s formal comments appear in appendix II. SSA
    also provided

    additional technical comments that we have incorporated in the report, as
    appropriate. We are sending copies of this report to the House and Senate
    Committees

    with oversight responsibility for the Social Security Administration. We
    will also make copies available to other parties upon request. In
    addition, the report will be available at no charge on GAO*s Web site at
    http//: www. gao. gov. If you have any questions concerning this report,
    please contact me at (202) 512- 7215. Sincerely yours,

    Robert E. Robertson Director, Education, Workforce,

    and Income Security Issues

    Appendix I: Scope and Methodology Page 27 GAO- 03- 724 Supplemental
    Security Income This appendix provides additional details about our
    analysis of the Supplemental Security Income program*s (SSI) residency
    violations,

    including potential weaknesses in the Social Security Administration*s
    (SSA) policies and procedures. To meet the objectives of this review, we
    reviewed prior and ongoing projects by SSA and its Office of Inspector
    General (OIG), conducted independent audit work, and reviewed our prior
    work on the SSI program. We also reviewed SSA*s policies and SSI program
    guidelines concerning eligibility determinations and procedures for
    detecting potential residency violations. In addition, we analyzed SSI
    payment data between 1997 and 2001 and examined studies in which SSA

    or its OIG identified recipients who were residing outside the country. We
    reviewed our past work on the SSI program to evaluate the current use of
    such tools as administrative sanctions and monetary penalties. Finally, we
    interviewed SSA and OIG officials at its headquarters in Baltimore,

    Maryland, and key regional and field managers and staff responsible for
    administering and monitoring the SSI program.

    We conducted independent audit work in five states (California, Florida,
    Michigan, New York, and Texas) to identify common residency violation
    characteristics and examine SSA*s processes to identify residency
    violations. We selected locations for field visits based on the following
    criteria: (1) geographic dispersion, (2) states previously included in a
    SSA or OIG special initiative, (3) states with large numbers of SSI
    recipients, (4) states with large dollars of SSI expenditures, and (5)
    states with large numbers of noncitizen SSI recipients. These states
    represented about 72 percent of the total noncitizen population
    potentially eligible for SSI benefits, about 41 percent of the total SSI
    recipients, and 45 percent of total SSI benefits paid in the United
    States. In total, we visited 17 field offices and interviewed 112 SSA
    field office managers and line staff responsible for the SSI program. We
    visited field offices more prone to having recipients with residency
    violations, especially offices near border crossings either by land, sea,
    or air. Where appropriate, we also visited

    offices that were involved with a prior or ongoing SSA or OIG special
    initiative to detect residency violations.

    During our meetings with SSA and OIG officials, we documented management
    and staff views on how extensive residency violations are in the SSI
    program; the effectiveness of current procedures and processes for

    detecting and preventing residency violations; and potential improvements
    to existing program processes, policies, and systems. We also interviewed
    certain state officials knowledgeable about or involved with SSI residency
    verifications. In addition, we interviewed officials from other federal
    agencies, including the former Immigration and Naturalization Service,
    Appendix I: Scope and Methodology

    Appendix I: Scope and Methodology Page 28 GAO- 03- 724 Supplemental
    Security Income and the Centers for Medicare and Medicaid Services (CMS)
    to determine how these agencies could assist SSA in verifying recipients*
    residency. We also interviewed officials from a national financial data
    vendor to obtain

    information on currently available financial data. We conducted our work
    from September 2002 through May 2003 in accordance with generally accepted
    government auditing standards.

    As part of our study, we developed and tested a logistic regression model
    to help predict whether certain SSI recipients were more likely than
    others to have residency violations. The factors we used in our model were
    recipients who (1) were born outside of the United States, (2) have their
    SSI benefits direct deposited into bank accounts, (3) use post office
    boxes to receive their mail, (4) have had a prior residency violation, or
    (5) could not be located by SSA for an extended period. 1 In deciding
    which variables

    to include in our regression analysis, we chose variables that were most
    frequently reported to us by SSA and OIG staff during our fieldwork.
    Additional potentially useful variables were also reported. (See table 1
    for a more comprehensive list of the variables cited.) This is a partial
    listing of the factors reported to us; it does not include all responses.
    2 1 An additional variable cited frequently by staff as a potentially
    effective tool to identify

    residency violations* Medicaid nonutilization information* was not
    included in our model because SSA does not currently have automated data
    on Medicaid nonusage by SSI recipients. However, SSA is currently
    negotiating access to such data with the CMS. 2 In a prior study, SSA*s
    OIG identified several factors as potential indicators that a recipient

    may be violating the SSI residency requirements. These factors include:
    (1) age when a recipient applies for SSI, (2) sex, (3) disability status,
    (4) citizenship, (5) use of commercial mailboxes, (6) excess resources or
    income, (7) questionable addresses, (8) failure to provide sufficient
    evidence to SSA staff, (9) lack of an in- person benefit review for an
    extended period of time, (10) direct deposit of benefits, (11) prior
    address changes,

    (12) residential address that differs from a recipients* mailing address,
    and (13) living in another person*s household. The OIG noted that more
    than half of residency violators exhibited four or more of these
    characteristics.

    Appendix I: Scope and Methodology Page 29 GAO- 03- 724 Supplemental
    Security Income Table 1: Variables That Indicate a Recipient May
    Potentially Be Out of the United States

    Variable

    Recipients with prior residency violations Recipients who use direct
    deposit to receive their benefits Recipients receiving mail at a post
    office box or commercial mail drop Recipients who were born outside of the
    United States Recipients who do not utilize their Medicaid benefits for an
    extended period of time Recipients who SSA cannot locate or contact
    Recipients reporting different residential and mailing addresses

    Recipients living with family or friends without their own residency Aged
    recipients Multiple recipients using the same physical mailing address
    Recipients with immediate family in another country Recipients with excess
    resources or income Source: GAO analysis. Note: Factors in table 1 include
    all responses where at least 10 percent of the total staff interviewed

    cited that a specific variable would be a valid predicator that a
    recipient may be out of the country and thus violating SSI residency
    requirements.

    Our model resulted in estimates of the relative likelihood (odd ratios) of
    a current residency violation depending on the absence or presence of the
    included five variables (see table 2). If there is no significant
    difference between the presence and the absence of one of the variables,
    with respect to a current residency violation, the odds would be
    approximately equal, and the ratio of the odds would be close to 1.00. The
    more the odds ratio differs from 1.00 in either direction, the larger the
    effect it represents. For example, if there were very little difference
    between those beneficiaries who did and did not use direct deposit, with
    respect to a current (as of Apr. 2003) residency violation, the odds ratio
    for direct deposit would be close to 1.00.

    Appendix I: Scope and Methodology Page 30 GAO- 03- 724 Supplemental
    Security Income Table 2: Odds Ratios for the Variables in Our Logistical
    Regression Analysis

    All of the following odds ratios are statistically significant Variable
    Odds ratio Interpretation Recipients who were born outside of the United
    States. 44.19 Recipients who were born outside of the

    United States are approximately 44 times more likely to be current
    residency violators. Recipients who did use

    direct deposit to receive their benefits.

    0.83 Recipients who did use direct deposit to receive their benefits are
    1.2 times less likely to be current residency violators. a

    Recipients receiving mail at a post office box. 1.77 Recipients receiving
    mail at a post office box are 1.8 times more likely to be current

    residency violators. Recipients with prior residence violations. 9.80
    Recipients with prior residence violations are about 10 times more likely
    to be current

    residency violators. Recipients who SSA cannot locate or contact. 0.06
    Recipients who SSA cannot locate or contact are 17 times less likely to be
    current

    residency violators. b Source: GAO*s analysis of SSA data on residency
    violation. a For odds rations that fall between 0 and 1, the reciprocal of
    the odds ratio describes the odds of being less likely. Thus, the odds
    ratio of 0.83 is interpreted as 1 divided by 0. 83, which is approximately
    1.2 times less likely. b Similarly, the reciprocal of 0.06 is
    approximately 17.

    Appendix II: Comments from the Social Security Administration

    Page 31 GAO- 03- 724 Supplemental Security Income Appendix II: Comments
    from the Social Security Administration

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    Appendix II: Comments from the Social Security Administration

    Page 32 GAO- 03- 724 Supplemental Security Income See comment 1.

    Appendix II: Comments from the Social Security Administration Page 33 GAO-
    03- 724 Supplemental Security Income

    Appendix II: Comments from the Social Security Administration

    Page 34 GAO- 03- 724 Supplemental Security Income See comment 2.

    Appendix II: Comments from the Social Security Administration Page 35 GAO-
    03- 724 Supplemental Security Income

    Appendix II: Comments from the Social Security Administration

    Page 36 GAO- 03- 724 Supplemental Security Income The following are GAO*s
    comments on SSA*s letter dated June 27, 2003. 1. Based on our analysis, we
    continue to believe that this factor*

    recipients born outside the United States* is a good indicator of a
    potential residency violation. Use of this factor may help SSA further
    refine its risk analysis system (see report page 18).

    2. Our report does not state that direct deposit is a good indicator of a
    residency violation. Rather, we discuss the potential use of financial
    institution data such as recipients* banking transactions outside the
    United States using automated teller machines, which is currently
    unavailable to SSA (see report page 22). GAO Comments

    Appendix III: GAO Contacts and Staff Acknowledgments

    Page 37 GAO- 03- 724 Supplemental Security Income Daniel Bertoni (202)
    512- 5988 Jeremy D. Cox (202) 512- 5717

    In addition to those named above, Jeff Bernstein, Sue Bernstein, Kriti
    Bhandari, Salvatore F. Sorbello, Vanessa Taylor, Wendy Turenne, and Shana
    Wallace made important contributions to this report. Appendix III: GAO
    Contacts and Staff

    Acknowledgments GAO Contacts Staff Acknowledgments

    Related GAO Products Page 38 GAO- 03- 724 Supplemental Security Income
    Supplemental Security Income: Progress Made in Detecting and Recovering
    Overpayments, but Management Attention Should Continue. GAO- 02- 849.
    Washington, D. C.: September 16, 2002.

    Supplemental Security Income: Status of Efforts to Improve Overpayment
    Detection and Recovery. GAO- 02- 962T. Washington, D. C.: July 25, 2002.
    Social Security Administration: Agency Must Position Itself Now to Meet
    Challenges. GAO- 02- 289T. Washington, D. C.: May 2, 2002.

    Social Security Administration: Status of Achieving Key Outcomes and
    Addressing Major Management Challenges. GAO- 01- 778. Washington, D. C.:
    June 15, 2001.

    High Risk Series: An Update. GAO- 01- 263. Washington, D. C.: January
    2001.

    Major Management Challenges and Program Risks: Social Security
    Administration. GAO- 01- 261. Washington, D. C.: January 2001.

    Supplemental Security Income: Additional Actions Needed to Reduce Program
    Vulnerability to Fraud and Abuse. GAO/ HEHS- 99- 151. Washington, D. C.:
    September 15, 1999.

    Supplemental Security Income: Long* Standing Issues Require More Active
    Management and Program Oversight. GAO/ T- HEHS- 99- 51. Washington, D. C.:
    February 3, 1999.

    Major Management Challenges and Program Risks: Social Security
    Administration. GAO/ OCG- 99- 20. Washington, D. C.: January 1, 1999.

    Supplemental Security Income: Action Needed on Long- Standing Problems
    Affecting Program Integrity. GAO/ HEHS- 98- 158. Washington, D. C.:
    September 14, 1998.

    Supplemental Security Income: Opportunities Exist for Improving Payment
    Accuracy. GAO/ HEHS- 98- 75. Washington, D. C.: March 27, 1998. High Risk
    Program: Information on Selected High- Risk Areas. GAO/ HR97-

    30. Washington, D. C.: May 16, 1997. Related GAO Products

    Related GAO Products Page 39 GAO- 03- 724 Supplemental Security Income
    High Risk Series: An Overview. GAO/ HR- 97- 1. Washington, D. C.: February
    1997.

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