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.

(130186)

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