Social Security Administration: Actions Needed to Strengthen	 
Processes for Issuing Social Security Numbers to Children	 
(31-JAN-05, GAO-05-115).					 
                                                                 
In fiscal year 2004, the Social Security Administration (SSA)	 
issued about 4.2 million original Social Security numbers (SSN)  
and 2 million SSN replacement cards to U.S.-born children.	 
Despite its narrowly intended purpose, today, young children need
a SSN to be claimed on their parent's income tax return or to	 
apply for certain government benefits. Because children's SSNs,  
like all SSNs, are vulnerable to theft and misuse, the Chairman  
of the Senate Committee on Finance requested that GAO (1)	 
document SSA's current processes and internal controls for	 
issuing SSNs to U.S.-born children under the age of 18 and (2)	 
identify any weaknesses that may affect SSA's ability to ensure  
the integrity of the SSN and the efficiency of enumeration	 
processes.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-115 					        
    ACCNO:   A16222						        
  TITLE:     Social Security Administration: Actions Needed to	      
Strengthen Processes for Issuing Social Security Numbers to	 
Children							 
     DATE:   01/31/2005 
  SUBJECT:   Children						 
	     Data collection					 
	     Federal social security programs			 
	     Fraud						 
	     Identity verification				 
	     Internal controls					 
	     Social security number				 
	     Vital records					 
	     Policies and procedures				 
	     Identity theft					 
	     SSA Program Operations Manual System		 

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GAO-05-115

United States Government Accountability Office

                    GAO Report to the Chairman, Committee on
                              Finance, U.S. Senate

January 2005

                                SOCIAL SECURITY
                                 ADMINISTRATION

 Actions Needed to Strengthen Processes for Issuing Social Security Numbers to
                                    Children

GAO-05-115

[IMG]

January 2005

SOCIAL SECURITY ADMINISTRATION

Actions Needed to Strengthen Processes for Issuing Social Security Numbers to
Children

                                 What GAO Found

SSA has two processes for issuing SSNs to U.S.-born children-one that
allows parents to request SSNs through a hospital during birth
registration and one that permits them to apply through SSA field
offices-both of which include various internal control mechanisms. Today,
SSA issues the majority of SSNs to children through its Enumeration at
Birth (EAB) program. Participating hospitals forward the SSN request and
other birth registration data to vital statistics agencies, which then
send it to SSA. SSA's automated system ensures that the data are complete
and mails the SSN to the parent. Parents may also request SSNs through SSA
field offices by mail or in person. This process requires parents to
present proof of the child's age, identity, and citizenship as well as
proof of their own identity. As fraud prevention measures, SSA also
interviews children 12 and older and verifies documents with a third party
for those over age 1. If a child's SSN card is lost or stolen, parents may
also apply for a replacement card. SSA requires proof of identification
for both the parent and the child to obtain such cards.

Despite SSA's efforts to improve its enumeration processes, weaknesses
persist in EAB program oversight and outreach, manual birth verification
procedures, and other vulnerabilities that could adversely affect the
integrity of SSA's processes. Federal internal control standards state
that agencies should assess and mitigate risk to their programs. However,
SSA does not conduct comprehensive integrity reviews, or coordinate with
external auditing agencies to ensure that vital statistics agencies and
hospitals are properly collecting and protecting enumeration data for
children. In addition, SSA lacks a nationwide capability to efficiently
verify birth certificates for children whose parents apply through SSA
field offices, although a prior SSA pilot proved successful in providing
such verifications. Further, SSA lacks a policy for securing and tracking
birth certificates once manual verifications are complete, making these
documents vulnerable to misuse. Finally, SSA's policies for verifying
birth certificates of children under age 1 and for issuing replacement SSN
cards, which allow for up to 52 cards annually, remain weak and could
expose the program to fraud. The Intelligence Reform and Terrorism
Prevention Act of 2004 will assist SSA in protecting the integrity of the
SSN by requiring the agency to verify birth documents for all SSN
applicants, except for EAB purposes, and limit the issuance of SSN
replacement cards.

4.2 Million Original SSNs Issued to U.S.-Born Children in Fiscal Year 2004

                 United States Government Accountability Office

Contents

Letter

Results in Brief
Background
SSA Has Specific Processes for Issuing SSNs and Replacement

Cards To Children
Majority of SSNs Are Issued to Children through SSA's
Enumeration at Birth Process
Relatively Few Children Are Enumerated through SSA Field
Offices
Several Weaknesses Could Affect the Integrity and Efficiency of
SSA's Enumeration Processes
SSA Lacks Oversight to Assess the Integrity of EAB and Does Not
Track Relevant Audit Findings of Other Agencies
Limited Outreach and Education to Hospitals May Limit the

Effectiveness of the EAB Program
SSA Lacks a Nationwide Capability to Perform Birth Verifications
SSA Lacks a Policy to Fully Protect Birth Documents from Misuse
Previously Reported Enumeration Weaknesses Continue to Expose

SSA to Fraudulent Enumerations
Conclusions
Matter for Congressional Consideration
Recommendations for Executive Action
Agency Comments

                                       1

                                      2 4

                                       7

                                       7

12

17

17

20 22 27

28 30 31 31 31

Appendix I Scope and Methodology

Appendix II Comments from the Social Security Administration

Appendix III GAO Contacts and Staff Acknowledgments 41

GAO Contacts 41
Staff Acknowledgments 41

Tables

Table 1: Original SSNs and Replacement Social Security Cards
Issued in Fiscal Year 2004 6

Table 2: SSA Requirements-Original SSNs Compared with Replacement Cards 16

Figures

Figure 1: Original SSNs Issued to U.S.-Born Children in Fiscal Year 2004 8
Figure 2: SSA's EAB Process for Assigning SSNs to U.S.-Born

Children 11 Figure 3: SSA's Field Office Process for Assigning SSNs to
Children 13 Figure 4: Map of Participants in the Electronic Verification
of Vital

Events Pilot 23

Figure 5: Electronic Verification of Vital Events Between the Social
Security Administration Field Offices and States' Vital Statistics
Agencies 25

Abbreviations

CIRP Comprehensive Integrity Review Process
EAB Enumeration at Birth
EVVE Electronic Verification of Vital Events
HIPAA Health Insurance Portability and Accountability
MES Modernized Enumeration System
NAPHSIS National Association for Public Health Statistics and

Information Systems NASACT National Association of State Auditors,
Comptrollers

and Treasurers OIG Office of the Inspector General OSI Office of Special
Investigations POMS Program Operations Manual System SR Service
Representative SSA Social Security Administration SSN Social Security
Number VSA Vital Statistics Agency

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protection in the United States. It may be reproduced and distributed in
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separately.

United States Government Accountability Office Washington, DC 20548

January 31, 2005

The Honorable Charles E. Grassley
Chairman
Committee on Finance
United States Senate

Dear Mr. Chairman:

Today, the majority of children born in the United States are assigned a
Social Security number (SSN) before their first birthday. The Social
Security Administration (SSA) refers to the assignment of original SSNs
and replacement SSN cards as "enumeration." In fiscal year 2004, SSA
issued over 4 million original SSNs to U.S.-born children, of which over
90
percent were to children under age 1. The agency also issued over 2
million replacement cards to U.S.-born children. SSNs were originally
created to track workers' employment history and eligibility for Social
Security benefits. However, today, SSNs are used for a myriad of purposes,
and even children born as U.S. citizens must have SSNs to be claimed as
dependents on their parents' tax returns and to receive benefits from
federal programs. Because SSNs are central to so many aspects of
American life, children's SSNs, like all SSNs, are vulnerable to fraud and
financial crimes.

Various news accounts and identity crime experts report that the theft of
a
child's identity may go undetected for years until an event-such as an
application for a driver's license-reveal that the child's identity was
stolen. Because of increasing concerns regarding the enumeration of
children, the Chairman of the Senate Finance Committee requested that
we (1) document current processes and internal controls for issuing SSNs
to U.S.-born children under the age of 18 and (2) identify any weaknesses
that may affect SSA's ability to ensure the integrity of the SSN and the
efficiency of enumeration processes.

To complete our work, we examined SSA's Program Operations Manual
System and met with SSA officials to identify the processes used to
enumerate children. We also documented the roles of select hospitals and
vital statistics agencies, which facilitate SSA's process for enumerating
newborns. To identify weaknesses that may affect SSA's ability to
efficiently enumerate children and ensure the integrity of the SSN, we
collected and analyzed information on SSA's enumeration initiatives, the

results of prior internal reviews, and studies performed by SSA's Office
of the Inspector General (OIG) and Office of Quality Assurance and
Performance Assessment. In addition, we contacted the National Association
of State Auditors, Comptrollers and Treasurers (NASACT) as well as
individual state comptrollers and inspectors general to identify and
obtain any relevant reviews of their state vital statistics agencies'
birth registration and certification processes. Also, our Office of
Special Investigations (OSI) tested SSA's practices for issuing
replacement cards to children by posing as parents of fictitious children
and using counterfeit documents in an attempt to obtain multiple cards.

We conducted our review at SSA headquarters in Baltimore, Maryland, and at
four regional offices-Atlanta, New York, Philadelphia, and San
Francisco-and 10 field offices. We selected the SSA regional and field
offices based on their geographic location, the volume of enumeration
activity, and participation in certain enumeration projects. We also spoke
with officials in vital statistics agencies and medical facilities in the
states of California, Georgia, Kentucky, and Maryland and the city of New
York. Our Office of Special Investigations conducted its work in 7 SSA
field offices in the District of Columbia, Maryland, and Virginia. We
conducted our work between January and December 2004 in accordance with
generally accepted government auditing standards. Appendix I discusses our
scope and methodology in further detail.

SSA has two processes for issuing SSNs to U.S.-born children-one that
allows parents to request SSNs through a hospital during birth
registration and one that permits them to apply through SSA field
offices-both of which include various internal control mechanisms. Today,
SSA issues the majority of SSNs to children through its Enumeration at
Birth (EAB) program. Participating hospitals forward the SSN request and
other birth registration data to vital statistics agencies, which then
send pertinent data to SSA. SSA's automated system ensures that the data
are complete and mails the SSN to the parents. Parents may also request
SSNs through SSA field offices by mail or in person. This process requires
parents to fill out an application and to present at least two original
documents as proof of the child's age, identity, and citizenship as well
as proof of their own identity. For any child over age 1, SSA also
requires staff to independently verify birth certificates with the issuing
vital statistics agency. In addition, SSA conducts in person interviews
with all children applicants age 12 and older, as an additional safeguard
against identity theft. SSA uses both managerial and automated reviews to
ensure that SSNs are issued properly. If a child's SSN card is lost or
stolen, parents may also apply for

Results in Brief

a replacement card via the field office process. To issue a replacement,
SSA requires proof of identification for both the parent and the child.

Despite SSA's efforts to improve its enumeration processes, weaknesses in
EAB program oversight and outreach, manual birth verification procedures,
and other vulnerabilities could adversely affect the integrity and
efficiency of its processes. Our Standards for Internal Control in the
Federal Government1 state that federal agencies should assess and mitigate
risk and promptly evaluate findings from audits that could affect the
integrity of key operations. However, SSA has not conducted such
comprehensive integrity reviews to ensure that vital statistics agencies
and hospitals are properly collecting and protecting birth registration
data used to enumerate children. Although some external audit agencies at
both the federal and state levels have reviewed vital statistics agencies
and identified weaknesses, SSA does not coordinate with these agencies and
is unaware of these reviews. SSA has also provided only limited education
and outreach to hospitals to ensure they consistently provide information
to parents regarding the timeframes for processing EAB requests. Thus,
some parents who opt for EAB may, subsequently, apply a second time at a
SSA field office because they do not know how long EAB takes to process
their application and issue a card for their child. Such multiple
applications can result in the issuance of two distinct SSNs for the same
child. In addition, SSA currently lacks a nationwide electronic capability
to efficiently verify birth certificates for children whose parents apply
through SSA field offices, as well as clear policies for securing and
tracking of birth certificates once manual verification is completed,
leaving these documents vulnerable to theft and misuse. Finally, SSA's
policy on verifying birth certificates for children under age 1 and policy
for issuing SSN replacement cards are weak and could expose the program to
fraudulent enumerations. For example, SSA's policy does not require field
office staff to verify birth documents for children under age 1 and allows
individuals to obtain up to 52 replacement cards annually. To illustrate
this, we used the same original SSNs we obtained with counterfeit
documents for two fictitious children during a previous review to apply
for replacement cards. Our investigators acquired 8 replacement cards in
less than 6 weeks, before SSA field office staff placed a fraud alert on
the two SSN records, demonstrating that once a person obtains a SSN
fraudulently, the problem can be quickly expanded with requests for

1See GAO, Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).

numerous replacement cards. Just prior to issuance of this report,
Congress passed the Intelligence Reform and Terrorism Prevention Act of
2004, which included provisions to require SSA to verify the birth
documents of all SSN applicants and limit the number of replacement cards
an individual may obtain.

We are making several recommendations to SSA that are intended to
strengthen SSA's processes and internal controls over the issuance of SSNs
for children. We are also asking Congress to consider authorizing the
development of a cost-effective system to enable SSA to electronically
verify birth documents with vital statistics agencies for all SSN
applicants. In response to our draft report, SSA disagreed with our
recommendation that it increase EAB oversight to ensure the reliability of
enumeration data it receives from vital statistics agencies. SSA noted
that it is not within its purview to ensure the reliability of state
agency or hospital birth data. We continue to believe that SSA has a
responsibility under internal control standards for federal agencies to
ensure that the data it receives are reliable and we believe the contracts
between SSA and vital statistics agencies provide a mechanism to ensure
more effective oversight. SSA agreed with our recommendations for better
coordination with audit agencies, improved EAB outreach and education, and
policy clarification on handling birth certificates obtained for
verification purposes and provided information on planned or current
actions to address them. SSA's comments are reproduced in appendix II.

                                   Background

The Social Security Act of 1935 authorized SSA to establish a
recordkeeping system to help manage the Social Security program, which
resulted in the creation of the Social Security number.2 SSA uses the SSN
as a means to track workers' earnings and eligibility for Social Security
benefits and assigns a unique number to every person and uses this number
to create a work and retirement benefit record for the individual. SSA
issues SSNs to most U.S. citizens, and they are also available to non-U.S.
citizens with permission to work from the Department of Homeland Security.
Also, in certain cases, SSA issues SSNs to non-U.S. citizens without
permission to work who require a SSN to receive federal benefits or to
lawfully admitted non-U.S. citizens to receive state or local public
assistance benefits. Due to the number's unique nature and broad

2The Social Security Act of 1935 created the Social Security Board, which
was renamed the Social Security Administration in 1946.

applicability, the SSN has become the identifier of choice for government
agencies and private businesses and is used for numerous non-Social
Security purposes, such as opening bank accounts and filing taxes. Today,
even young children need a SSN to obtain medical coverage, be claimed on
their parents' income tax return, or establish eligibility for other
government or financial benefits.

In fiscal year 2004, SSA issued approximately 5.5 million original SSNs
and 12.4 million replacement cards, of which roughly 4.2 million originals
and 2.3 million replacements were for U.S.-born children under age 18, as
shown in table 1. SSA's headquarters, in conjunction with its 1,333 field
offices, issued these SSNs and cards to U.S. and noncitizen applicants.
The primary guidance SSA uses to carry out its enumeration processes is
the Program Operations Manual System (POMS).3 Under this guidance, SSA
field offices are responsible for interviewing applicants for both
original and replacement Social Security cards, reviewing evidentiary
documents, verifying immigration and work status of applicants, and keying
information into SSA's automated enumeration system. Due to the burden on
field offices from the increased demand for SSNs, SSA implemented its
Enumeration at Birth program nationally in 1989 to provide parents with a
convenient opportunity to request SSNs for their newly born children
without visiting a field office. To facilitate this program, SSA contracts
with state and jurisdictional vital statistics agencies to obtain specific
information required to issue SSNs to newborns. As of March 2004, SSA had
EAB contracts with 50 states and 3 independent registration jurisdictions,
for a total cost of approximately $8.2 million.4

3POMS is the single repository of all operational information whether
issued by SSA's central office, a program service center, or a regional
office. As such, POMS not only contains operating procedures and policies
for administering SSA`s programs, but is also replete with procedures for
handling situations where fraud is suspected or detected.

4Independent registration jurisdictions include New York City, Washington,
D.C., and Puerto Rico. Because some New York City Department of Health
statutes supersede those of New York State, that city's office is
recognized as its own jurisdiction, making New York the only state with
two jurisdictions for vital records.

Table 1: Original SSNs and Replacement Social Security Cards Issued in
Fiscal Year 2004

                          Numbers in millions U.S. citizens Noncitizens Total 
                         Original SSNs issued         4.30a        1.17  5.47 
            Replacement Social Security cards         11.50        0.87 12.37 
                                       issued                           
                                        Total         15.80        2.04 17.84 

Source: SSA.

aOf the 4.30 million original SSNs issued for U.S. citizens, approximately
4.22 million were for U.S.born children under age 18. Also, of the roughly
11.50 million replacement cards issued to U.S. citizens, approximately
2.32 million were for U.S.-born children under age18.

Hospital personnel, sometimes referred to as birth registrars or clerks,
generally have overall responsibility for gathering and forwarding the
birth certificate information and SSN requests to state or local vital
statistics agencies.5 In instances when a baby is born outside a hospital,
the responsibility for filing the birth information typically rests on the
midwife or other person in attendance, one of the parents, or the person
in charge of the place where the birth occurred.

State vital statistics agencies are usually found within a state or
jurisdiction's department of health. According to the National Association
for Public Health Statistics and Information Systems (NAPHSIS),6 vital
statistics for the United States are obtained from the official records of
live births, deaths, fetal deaths, marriages, divorces, and adoptions. The
official recording of these events is the responsibility of individual
states and independent registration areas, such as the District of
Columbia and New York City. Governments at all levels-federal, state, and
local-use vital records for statistical purposes through cooperative
arrangements with the respective state agency. At the time of our audit
work, most states restricted access to birth records, but according to
NAPHSIS, 11 states allowed "open" access to birth records, meaning that no
identification

5Birthing centers may also provide parents with the opportunity to
participate in SSA's EAB program. For example, the Brooklyn Birthing
Center in Brooklyn, New York, provides this service to parents. Typically,
a birthing center is an independent facility, though some are housed
inside hospitals, where a certified nurse-midwife provides most of the
care.

6NAPHSIS is a national association of state vital records and public
health statistics offices, which is based in the Washington, D.C. area.
The association was formed in 1933 to provide a forum for the study,
discussion, and solution of problems related to these programs in the
respective members' health departments.

requirements or relationship is needed to obtain a certified copy of a
birth certificate.7

Identity theft is one of the fastest growing crimes in the United States.
In 2004, the Federal Trade Commission reported that in recent years some
10 million people-or 4.6 percent of the adult population-discovered that
they were victims of some form of identity theft. These numbers translate
into estimated losses exceeding $50 billion, but the extent to which these
statistics represent children is not well documented. However, various
news accounts and identity crime experts report that the theft of a
child's identity may go undetected for several years until an event-such
as an application for a driver's license-reveals that the child's identity
was stolen. Furthermore, children may also face future financial
consequences if their SSN and name are used years before they first
establish credit.

SSA has two primary processes for issuing SSNs and replacement cards to
children born in the United States. Today, most SSNs are issued to
children through SSA's EAB program, while the parents of a much smaller
number of children receive SSNs through SSA's field office application
process. To ensure that SSNs are issued properly, SSA monitors data on EAB
processing times and error rates and performs various integrity checks for
those SSNs issued by field office staff. SSA also has specific policies
for issuing replacement cards to children.

SSA Has Specific Processes for Issuing SSNs and Replacement Cards To
Children

Majority of SSNs Are In 2004, SSA issued roughly 90 percent of SSNs to
children through its

EAB program. As shown in figure 1, the majority of SSA's enumeration
Issued to Children workload involves U.S.-born children who generally
receive their SSNs via through SSA's states' and jurisdictions' birth
registration process facilitated by hospitals.

Under this process, SSA accepts birth registration data from vital
statistics Enumeration at Birth agencies as evidence of a child's age,
identity, and citizenship. In fiscal Process year 2004, SSA issued
approximately 3.9 million SSNs through EAB.

7The recent passage of the Intelligence Reform and Terrorism Prevention
Act of 2004 directs the Secretary of Health and Human Services, in
consultation with state vital statistics agencies and certain federal
agencies, to establish additional security measures for issuing birth
certificates to a person who is not the applicant.

Figure 1: Original SSNs Issued to U.S.-Born Children in Fiscal Year 2004

SSNs issued 4,000,000

3,000,000

2,000,000

1,000,000

0

               Under   Birth-   Age  
               age 1     age   12-17 
Issuance              11    
age                         
EAB       3,927,676         
process                     
SSA field                         
offices             289,068 5,406

Source: SSA.

Hospital participation in EAB is voluntary. While SSA and state vital
statistics agencies have strongly encouraged participation in the EAB
program, the extent of nationwide hospital participation is unknown.
However, SSA officials believe that most hospitals participate in EAB.

Under EAB, parents in the hospitals we visited could request a SSN for
their newborn child via the hospital's birth registration worksheet. This
worksheet was typically a standardized state-issued form used to capture
the demographic and medical information required for the child's birth
certificate. For those parents choosing to participate in the program, SSA

guidance states that hospital representatives should provide parents with
a receipt as proof of their SSN request.8

Of the nine medical facilities we visited, all provided parents with the
opportunity to request SSNs through EAB. However, each had established its
own unique policies, procedures, and internal controls for collecting,
maintaining, and transmitting birth information, including the SSN
request, in accordance with federal and state statutes. For example, one
state required that its hospitals submit all birth information directly to
the state vital statistics agency within 72 hours of the birth, while in
another state, the law required that birth information be submitted to the
local registrar within 10 days of the birth.

While submission timeframes varied among the states we visited, generally
all hospitals transmitted birth information both electronically and
manually to their respective vital statistics agencies. Birth registrars
or clerks were typically responsible for entering the birth certificate
information into an electronic birth registration computer system, which
in some cases, was directly linked to the state vital statistics agency.
Though system software varied among states, it tended to capture the same
information and was generally equipped with the same security features.
For example, in almost every hospital we visited, each birth registrar or
clerk had a personal identification password and sign-on to access the
system.

Hospital personnel, in locations we visited that submitted data
electronically, were required to make corrections to the electronic
certificate prior to submitting it to their vital statistics office,
because the computer system locked the record once the information was
downloaded. This security feature prevented staff from making changes once
the data were transmitted. However, if an error was discovered, hospital
personnel could correct it with assistance from their respective vital
statistics agency. For example, one state's vital records office issued a
single-use pass code to the responsible birth registrar for re-entry into
the electronic registration system.

8According to SSA's POMS, hospital representatives are to provide Form
SSA-2853 to the parent as proof that he or she elected that a SSN be
assigned to his or her child through the EAB process. The form specifies
the expected timeframes for receiving the SSN card in the particular state
from which it was processed. Form SSA-2853 is available in both English
and Spanish.

In all the states in which we conducted interviews, we also found that
once the vital statistics agency received the birth information, state
officials reviewed the birth data submitted. These vital statistics
agencies reviewed the data to ensure that the demographic and medical
information was complete. In addition, officials from one location told us
that they had also implemented other quality assurance measures, such as
crossreferencing birth and death records and validating births that occur
outside the presence of a physician or midwife. Subsequently, each office
extracted and transmitted to SSA the information necessary to issue SSNs,
including the name of the child, the date of birth, the parents' names,
and mailing address.

SSA's data showed that the average EAB processing times varied among vital
statistics agencies and ranged anywhere from 3 weeks to 12 weeks. An SSA
official told us that some of the main reasons for the variation in the
processing time was due to the technological capabilities of vital
statistics agencies to transmit information and personnel issues. For
example, not all vital statistics agencies were electronically connected
to each of their EAB reporting hospitals. Therefore, staff had to key the
birth information into an electronic format, which increased the
processing time. Figure 2 shows SSA's EAB process.

Figure 2: SSA's EAB Process for Assigning SSNs to U.S.-Born Children

                    Source: GAO analysis and Art Explosion.

Note: In addition to hospitals, birthing centers may provide parents with
the opportunity to participate in SSA's EAB program.

Relatively Few Children Are Enumerated through SSA Field Offices

Once SSA receives the data, its automated system ensures that the EAB data
are complete and scans for keying errors. If no errors are detected, SSA
issues a SSN card to the parents' mailing address. Throughout the EAB
process, SSA also serves as a technical adviser, assisting vital
statistics agencies with systems clarification and advice. Through its EAB
contracts, SSA also establishes timeliness and accuracy requirements for
EAB data and maintains this data. According to its contracts, SSA will not
pay vital statistics agencies for any EAB data received more than 4 months
after the month a birth occurs.9 However, SSA will accept such data for up
to 11 months after the month a birth occurs. SSA also will not process any
EAB submissions with an error rate greater than 5 percent.

While the majority of U.S. children receive SSNs through the EAB program
(3.9 million), the parents of a much smaller number apply for SSNs at SSA
field offices. In fiscal year 2004, SSA issued approximately 294,000 SSNs
to children through this process. SSA and hospital officials told us that
some parents elect not to participate in the EAB program due to reasons
related to religion or privacy. Consequently, parents of children not
enumerated through EAB can apply for their child's SSN by mail or in
person at a local SSA field office.

To apply for the SSN, parents complete a SSN application and submit at
least two documents as evidence of their child's age, identity, and
citizenship as well as evidence of their own identity. Documents that SSA
accepts as evidence of age, identity, and citizenship for a child include,
but are not limited to, a birth certificate; a record from a doctor,
clinic, or hospital; or a religious record. SSA requires that all
evidentiary documents be either originals or copies certified by the
issuing agency. Figure 3 highlights SSA's field office process for
assigning SSNs to children.

9Under the contracts with states, SSA also will not pay for duplicates of
records already received.

      Figure 3: SSA's Field Office Process for Assigning SSNs to Children

In recent years, SSA has taken additional steps to strengthen its field
office enumeration process to prevent identity theft. For example, in June
2002, SSA began requiring field office staff to verify the authenticity of
certified birth certificates for any person age 1 or older applying for an
original SSN.10 To obtain this third-party verification, SSA field offices
generally mail or fax a photocopy of the original document to the
pertinent vital statistics agency or in some limited cases query an
electronic system linked directly to the vital statistics agency's
database.11 SSA must also send a fee to most state vital statistics
agencies to cover the cost of this service.

In September 2003, SSA also changed its evidence requirements to enhance
its ability to verify the accuracy of SSN applications for children. For
example, SSA lowered the requirement for a mandatory in person interview
from age 18 to age 12. SSA field staff told us that they rarely have
U.S.-born children over age 12 applying for an original SSN, and generally
such applications receive closer scrutiny. In such instances, the
interviews are used as an additional safeguard against identity theft to
(1) establish that the child applicant actually exists and (2) corroborate
the parent-child relationship.

SSA also performs in-house reviews of its enumeration processes, including
those for children. For example, field office managers use SSA's
Comprehensive Integrity Review Process (CIRP) to monitor specific systems
activity for potential fraud or misuse by employees. In addition, SSA also
requires field staff to review a SSN applicant's supporting evidence and
input it into SSA's Modernized Enumeration System (MES), the computer
system used to assign SSNs. Once entered, the applicant's information
undergoes numerous automated edits and is flagged if found suspicious. For
example, MES suspends the processing of SSN

10For children under age 1, SSA's policy does not require independent
verification of certified birth certificates. Staff may visually inspect
the documents submitted, and if they appear genuine, process the
application. Just prior to issuance of this report, Congress passed the
Intelligence Reform and Terrorism Prevention Act of 2004, which requires
SSA to independently verify birth records for all SSN applicants, other
than for purposes of EAB. The act requires SSA to implement this
requirement within 1 year from the date of enactment.

11SSA has online access to state birth certificate databases in certain
states, such as Florida, Tennessee, and Kentucky. While SSA has free
access in Kentucky, the other states charge a fee per record.

applications for parents applying for new SSNs for numerous children in a
6-month period.

In addition to processing original SSNs, SSA field offices also issue
replacement SSN cards if a card is lost or stolen. To obtain a replacement
card for a child, parents must complete a SSN application and indicate the
SSN previously issued to the child. SSA requires that the applicant
provide only proof of identity for both the parent and the child. A wide
range of documents will satisfy the proof of identity requirement. For
example, parents could use a daycare center record to prove their child's
identity and a church membership record as proof of their own, provided
that the record includes key information required by SSA such as the
person's name, date of birth, and physical description. See table 2 for a
comparison of SSA requirements for original SSNs and those for replacement
SSN cards.

    Table 2: SSA Requirements-Original SSNs Compared with Replacement Cards

Original SSN requirements (any one of
the following documents for each
category) Replacement card requirements

Proof of identity

o  Driver's license

o  Passport

o  School ID card

o  School report card

o  Marriage or divorce record

o  Adoption record

o  	Health insurance card (except Medicare card)

o  Life insurance policy

o  Clinic, hospital, or doctor records

o  	Church membership or confirmation record

Proof of identity

Required for both parent and child and can be met with any proof of
identity document used in applying for an original SSN, i.e., school ID
card

Proof of age Proof of age

o  Birth certificate Only required if there is a discrepancy

o  	Religious record established before age 5 between the date of birth on
the showing age application and the evidence presented

o  Notification of birth registration with the application

Proof of U.S. citizenship

o  Passport

o  Birth certificate

o  	Religious record recorded in the United States within 3 months after
birth

o  Certificate of naturalization

o  Certificate of citizenship

o  Adoption finalization papers

o  	Other documents that establish a U.S. place of birth or U.S.
citizenship

Proof of U.S. citizenship

Not required for U.S.-born children

Source: GAO's analysis of SSA's enumeration procedures.

Note: The above list is not all-inclusive.

Several Weaknesses Could Affect the Integrity and Efficiency of SSA's
Enumeration Processes

SSA Lacks Oversight to Assess the Integrity of EAB and Does Not Track
Relevant Audit Findings of Other Agencies

Despite SSA's efforts in recent years to improve its enumeration
processes, several weaknesses persist, including a lack of EAB program
oversight and outreach, inefficient birth verification procedures, and
other vulnerabilities that could adversely affect the integrity and
efficiency of SSA's processes. Our Standards for Internal Control provide
a framework to help agencies address such weaknesses. However, SSA has not
fully incorporated some of these controls into its enumeration processes.
For example, SSA has not undertaken action to assess the integrity of the
EAB process and to keep informed of pertinent findings of other audit
agencies that have reviewed states' birth registration and certification
processes. Furthermore, we found that previously reported enumeration
weaknesses concerning SSA's lack of a policy to require birth
verifications for children under age 1 and a policy to further limit
replacement cards continues to expose SSA to risks of fraudulent
enumerations.

SSA does not conduct periodic internal control or comprehensive integrity
reviews to assess the integrity of procedures used to collect and protect
EAB data at vital statistics agencies and hospitals, nor does it take
advantage of available audit findings of other state agencies. SSA's EAB
contracts permit the agency to conduct on-site reviews of vital statistics
agencies' procedures for protecting confidential information. However,
SSA's Project Officer for the EAB program told us that the agency has not
conducted such comprehensive reviews because of a lack of resources. The
same official also told us that SSA has never used its EAB contracts to
require that vital statistics agencies conduct similar reviews of
participating hospitals. Our Internal Control Management and Evaluation
Tool states that federal agencies should have adequate mechanisms in place
to identify key programmatic risks arising from external factors,
including a consideration of risks posed by major suppliers and
contractors. Identified risks should then be analyzed for their potential
effect and an approach devised to mitigate them.12 However, because SSA
has not conducted reviews of entities involved in the EAB process, it
lacks important information to develop a clearer picture of areas in the
EAB process that may be vulnerable to error or fraud.

12See GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G
(Washington, D.C.: August 2001).

A September 2001 SSA Office of the Inspector General (OIG) report on the
EAB program suggested that more systematic oversight and management was
needed. The OIG review identified serious internal control weaknesses in
birth registration processes at selected hospitals that could compromise
the integrity of EAB data.13 For example, the OIG found that hospital
birth registration units often lacked adequate segregation of duties for
clerks involved in the registration process. Our internal control
standards state that key duties and responsibilities should be divided or
segregated among different people to reduce the risk of error, waste, or
fraud. Because clerks were generally involved in all phases of the birth
registration process at the hospitals included in the SSA OIG review, the
OIG said that the clerks could potentially generate birth certificates for
nonexistent children. The OIG also found that the hospitals did not have
controls in place to provide for periodic, independent reconciliations of
birth statistics with the total number of birth registrations they
reported, which could allow fictitious births to go undetected. During our
visits to eight hospitals and one birthing center, we found similar
internal control weaknesses. For example, some hospital birth units lacked
the resources to segregate various job duties among its staff. While we
found that birth registration staff in seven hospitals reconciled birth
statistics with the total number of births, the staff performing these
reconciliations were not independent of the birth registration process,
which could expose the process to fictitious birth registrations. In light
of the vulnerabilities that the OIG identified, SSA's Project Officer for
EAB told us that SSA and NAPHSIS have met to discuss an audit plan to
review hospitals in each state.

Some state audit agencies have conducted reviews of vital statistics
agencies that have produced findings of potentially critical importance to
SSA.14 However, due to a lack of coordination between SSA and state audit
agencies, SSA was unaware of these audits and their findings, according to
the EAB Project Officer. Our internal control standards require that
federal managers promptly evaluate findings from audits and other reviews
that could have an impact on their operations. Over the last several years
state audit agencies have identified deficiencies in vital

13Social Security Administration, Office of the Inspector General, Audit
of Enumeration at Birth Program, A-08-00-10047, (September 2001).

14We worked with the National Association of State Auditors, Comptrollers
and Treasurers (NASACT), to identify state audit agencies that have
conducted reviews of their respective vital statistics agencies. We
identified four such reviews or audits.

statistics agencies' operations that could have negative implications for
SSA's EAB program and field office enumeration processes. For example:

o  	An August 2004 Maryland Office of Legislative Affairs audit report
found that the controls at the state's vital records agency were
inadequate to ensure that birth certificates were issued to individuals
authorized by law.15 Specifically, the report stated that Maryland
applicants were not required to provide sufficient identification when
requesting birth certificates, birth records for deceased individuals were
not always marked as such, and adequate oversight of the local health
departments regarding the issuance of birth and death certificates
generally did not occur. Additionally, the audit found that controls over
birth certificate forms and related blank stock certificates were
inadequate to safeguard against fraudulent certificates being obtained for
illegal purposes. Furthermore, the audit found that access to the vital
records automated system was not adequately restricted.

o  	A November 2001 Florida Auditor General report disclosed that controls
over the vital statistics program at selected county health departments
were inadequate and not in compliance with vital statistics laws and
rules.16 For example, the Auditor General found that

the state registrar and several county health departments had not
established effective controls to require documentation to show that
certified copies of vital records were issued only to authorized
recipients. The review also showed that controls over vital records
security paper at selected county health departments were not adequate.

o  	A May 2000 State of New York Office of the State Comptroller audit
report found several weaknesses in the New York City Office of Vital
Record's controls over the reporting, registering, and processing of vital
records that could increase the risk that the reported number of birth and
death records in New York City may not be accurate or complete. The audit
also identified weaknesses in safeguarding vital records at two vital
records sites. As of December 2002, the State

15Office of Legislative Audits, Department of Legislative Services,
Maryland General Assembly Audit Report: Department of Health and Mental
Hygiene, Office of the Secretary and Other Units (August 2004).

16Florida Auditor General, Operational Audit of Vital Statistics Program
at County Health Departments for the Period July 1, 1999, Through December
31, 2000, Report No. 02-087, (November 2001).

Comptroller reported that New York City had made progress in implementing
its recommendations.17

In discussing SSA's oversight role relative to EAB and the vital
statistics agencies, SSA's EAB Project Officer told us that the EAB office
had tried for the last 2 fiscal years to obtain funding for vital
statistics agencies to review hospitals. Recently, the EAB office
submitted a proposal for the fiscal year 2005 budget request, which
included a measure to have vital statistics agencies review hospitals'
birth registration processes and about 30,000 EAB cases nationwide.18
However, according to SSA's EAB Project Officer, the agency decided not to
fund this initiative in fiscal year 2005 due to reduced budgetary
resources and items determined as higher priorities. The EAB Project
Officer also acknowledged that there is no formal or informal coordination
between the EAB component and state Comptrollers and Inspectors General
offices that may conduct reviews of vital statistics agencies. Because SSA
does not have direct contact with such entities, the official said that
SSA does not hear about special studies in states and that vital
statistics agencies do not normally share these studies with SSA.

Limited Outreach and Education to Hospitals May Limit the Effectiveness of
the EAB Program

SSA has provided only limited education and outreach to hospitals to
ensure they consistently provide information to parents regarding the
timeframes for processing EAB requests. Thus, some parents who opt for
EAB, but may need an SSN sooner than is possible under the process, may
apply a second time at a SSA field office; increasing the likelihood that
their child will be issued two distinct SSNs.

Our internal control standards require that management ensure that
adequate means are in place to communicate with external stakeholders that
may have a significant impact on an agency achieving its goals. However,
SSA's EAB Project Officer acknowledged that, beyond initial contacts with
hospitals when EAB was first implemented in 1989, SSA has

17State of New York Office of the State Comptroller Division of Management
Audit and State Financial Services, New York City Department of Health
Controls Over Vital Records, Report 99-N-6 (May 25, 2000) and follow-up
review, Report 2002-F-34 (December 5, 2002).

18SSA's Office of the Deputy Commissioner, Operations, directs and manages
SSA's central office and its geographically dispersed operations
installations and is also responsible for managing and overseeing the EAB
program.

done little follow-up education and outreach to ensure that hospitals have
up-to-date information necessary to effectively implement the program.

SSA maintains information on EAB processing times for individual states,
which is available via its Web site. The agency also developed Form 2853,
for distribution to parents by hospital staff that lists the processing
times for their state and serves as a receipt documenting the EAB request.
However, during our fieldwork, we found that SSA has conducted no formal
training or information sharing initiatives on these resources. Thus,
hospital birth registration personnel were often unaware of the available
processing time information, and staff at one hospital provided parents
with information based on their own estimates or the prior experiences of
other parents. We also found that only a few of the hospitals we visited
were aware of Form 2853 and were providing it to parents. Thus, parents
were not consistently receiving information from the hospitals on the time
it takes to receive a SSN under the EAB process.

Because parents do not always receive consistent or comprehensive
information on EAB processing times, they may opt for the service even
though they may need a SSN for their child sooner than is possible under
the current process. In such instances, parents may later decide to apply
for a SSN in a SSA field office, which could increase the likelihood that
their child could be issued two different SSNs. In a September 2001
report,19 SSA's OIG identified 67,206 instances nationwide in which
parents submitted a second SSN application when they did not receive a SSN
card for their children 1-year old or younger within 30 days of the
child's date of birth.20 In reviewing these applications, the OIG
identified 178 instances in which SSA issued multiple SSNs to the same
child. The report noted that SSA's system edits do not always recognize
SSNs previously assigned to children, especially if there are minor
variances in the names provided on the two applications. The OIG noted
that the assignment of more than one SSN to an individual creates the
opportunity for SSN misuse.

SSA's EAB Project Officer acknowledged that SSA does not do as much
education and outreach in the field as it did initially because of budget
constraints, but that the agency is currently working with the National

19Social Security Administration. Office of the Inspector General. Audit
of Enumeration at Birth Program. A-08-00-10047. September 2001.

20SSA's EAB contracts with state and local vital statistics agencies
require that SSA receive birth records within 30 days of the child's date
of birth.

SSA Lacks a Nationwide Capability to Perform Birth Verifications

Association for Public Health Statistics and Information Systems (NAPHSIS)
to strengthen its efforts to ensure hospitals have essential information
to help parents make more informed decisions as to whether EAB will meet
their needs. For example, SSA is seeking NAPHSIS' assistance to distribute
information on the EAB program and EAB processing times.

SSA currently lacks a nationwide capability to quickly and efficiently
perform required birth verifications for children whose parents apply for
a SSN through an SSA field office, although a prior SSA pilot project
proved successful in providing enhanced verification capabilities. As
noted earlier, SSA currently uses a predominantly manual process to
perform birth certificate verifications that is labor-intensive and
time-consuming. For example, SSA staff may submit birth verification
requests directly to vital statistics offices via the mail, fax, or in
some locations, electronically. In several other locations, this process
involves SSA staff manually completing the verifications at local vital
statistics offices, which is another option for performing the
verification.

Our internal control standards state that control activities should be
effective and efficient in accomplishing the agency's control objectives.
However, according to some field office staff that we spoke with, the
current birth certificate verification process significantly prolongs the
time required to process SSN applications, resulting in a backlog of
verification requests in some locations. Field office staff in several
offices cited examples of birth certificate verifications taking up to 6
months. Staff in one field office reported that they frequently encounter
long waiting periods when they request birth verifications from some
states. To expedite the verification process in this office, staff told us
that they allow parents to obtain a certified copy of their child's birth
certificate from the issuing vital statistics agency and submit the
document in a sealed envelope. Once SSA staff unseal the envelope and
review the birth certificate, they continue processing the SSN
application. In their view, this satisfied SSA's requirement for
independent verification. However, SSA policy officials told us that this
action would not meet SSA's requirement. We agree and believe that
allowing parents to obtain and submit certified copies of birth
certificates without independent verification exposes SSA to the potential
for fraud.

A recent SSA pilot with NAPHSIS, known as the Electronic Verification of
Vital Events (EVVE) project, demonstrated that SSA field offices could
perform vital records verifications in a quicker and more efficient manner
than the current manual process. EVVE was piloted in eight states
(California, Colorado, Hawaii, Iowa, Minnesota, Mississippi, Missouri, and
Oklahoma) and local SSA offices in 26 states and territories. Figure 4
identifies all of the states and territories that participated in the EVVE
pilot.

Figure 4: Map of Participants in the Electronic Verification of Vital
Events Pilot

Source: NAPHSIS.
Note: American Samoa and Guam also participated in the EVVE pilot.

Although EVVE was primarily established to expedite the processing of SSA
retirement and disability claims filed by older SSA customers, it was

also used to conduct required birth certificate verifications for
children. EVVE processed two types of electronic queries: birth
verifications and birth certifications. Birth verification queries were
generally performed when SSA customers possessed a certified copy of their
birth certificate. Conversely, birth certification queries were generally
performed when customers did not present their birth certificate,
technical problems arose with EVVE, or records were incompatible and
prevented a successful online verification. Ordinarily, SSA policy
requires that all individuals age 1 or older or their parents/guardians
present a copy of a birth certificate or other acceptable documents to
apply for a SSN, but SSA made an exception to this requirement for
customers in the pilot states.21 Thus, even if a person could not produce
his or her birth certificate, SSA would still process the application and
query the system for an EVVE certification based on information orally
obtained from the applicant. After receiving the query from SSA, the vital
statistics agency would run it against its automated search system and
return a "match" or "no match" response through EVVE's messaging hub to
the requesting SSA office. SSA, and not the applicant, assumed the costs
for both types of transactions. The EVVE process is depicted in figure 5.

21Other acceptable documents that could be used to apply for a SSN include
a religious record established before the age of 5 and a hospital record
of birth.

Figure 5: Electronic Verification of Vital Events Between the Social
Security Administration Field Offices and States' Vital Statistics
Agencies

Although SSA and NAPHSIS agreed that EVVE was a technical success because
it demonstrated the capability to electronically verify vital documents,
they did not move forward in implementing the system because of a
breakdown in negotiations over the price of the service. During the pilot,
SSA paid $5 for each birth verification query and $5 to $15 for each birth
certification query.22 At the conclusion of the pilot, SSA attempted to
negotiate a reduced price per query, but according to SSA officials in the
Division of Electronic Service Delivery, Office of Automation Support,
neither SSA nor the states could agree on what the price should be. To
resolve this matter, SSA contracted with KPMG LLP (KMPG) to conduct a fair
price assessment for the EVVE service. KPMG determined that SSA should pay
a national price of $6.42 per query. In addition, KPMG stated that SSA
would have to pay $.48 per query to cover the administrative costs of
maintaining the EVVE messaging hub. However, at this price, state
officials believed that they would lose revenue because SSA's policy did
not require applicants to present a birth certificate at the time of
application. Thus, clients would likely purchase fewer birth certificates
from vital records offices as a result. Unless SSA agreed to offset this
potential revenue loss by paying more for each query, the states were
reluctant to move forward. KPMG's analysis concurred that for on-line
birth queries, the majority of which were certifications during the EVVE
pilot, the seven states included in its study (four of which were EVVE
pilot states) would indeed realize revenue shortfalls.23 According to a
SSA official, negotiations stalled.

After the termination of the EVVE pilot in December 2003, SSA launched new
negotiations with individual states to obtain access to their vital
records. As of November 2004, SSA had negotiated individual agreements
with six of the eight EVVE pilot states-Florida, Kentucky, Montana, Rhode
Island, Tennessee, and Texas-which allow SSA offices in those states
querying capabilities for vital statistics data, and four of these states
allow browsing capabilities. While this access to some state vital records
will help to expedite the birth certificate verification process in those
states, it will not provide the capability for SSA offices to verify birth
certificates nationwide, which could potentially be offered by EVVE or
some other nationwide verification system. As a result, SSA field offices
in

22Except for Minnesota, where the state statute requires a price of $8 for
each verification.

23The seven states included in the KPMG Fair Price Assessment were Alaska,
Colorado, Florida, Iowa, Kansas, Missouri, and Washington.

SSA Lacks a Policy to Fully Protect Birth Documents from Misuse

states that do not allow access to vital records may still be subjected to
long waiting periods to perform birth certificate verifications.

In the absence of a nationwide electronic verification process, most SSA
field offices are using paper-driven verification processes that involve
the handling, storage, and disposal of birth certificates for which SSA
has few controls. Once SSA requests and pays for birth certificate
verifications, the servicing vital statistics office then mails a
certified copy of the birth certificate to the SSA field office. During
our fieldwork, we found considerable uncertainty among staff and various
inconsistencies in the methods field offices used to collect, maintain,
and dispose of these certified birth certificates. For example, after
using the birth certificate to clear the SSN application, some offices
shredded the document. However, in other offices, staff told us that they
gave or mailed the document to the child's parent, while other staff told
us that they kept copies of the birth certificates in a personal desk file
at their workstation.

Our internal control standards require that agencies have appropriate
policies and procedures to ensure appropriate documentation of
transactions, maintain control over vulnerable assets, limit access to
certain records, and assign accountability for their custody. In response
to our discussion with SSA policy officials regarding such weaknesses in
controls over birth certificates, SSA revised its policy on how to handle
documents purchased for evidence in November 2004 to direct staff to shred
birth certificates after processing the SSN application. However, this
policy does not address how staff are to track the number of birth
certificates received and record who handles them prior to their disposal,
which could still make the documents vulnerable to theft or inappropriate
disclosure misuse.

Previously Reported Enumeration Weaknesses Continue to Expose SSA to
Fraudulent Enumerations

SSA has not addressed two areas of its enumeration process that continue
to expose the agency to fraud and abuse: the assignment of original SSNs
to children under age 1 and the replacement of Social Security cards. In
October 2003, we reported that SSA staff responsible for issuing SSNs
relied on visual inspections of birth certificates to determine the
identity of children under age 1 and did not independently verify this
information with state or local vital statistics agencies.24 During our
fieldwork, we documented a case where an individual had submitted a
counterfeit birth certificate in applying for a SSN for a nonexistent
child. We also demonstrated the ease with which individuals could obtain
SSNs by exploiting SSA's current processes. Working in an undercover
capacity and posing as parents of newborns, our investigators used
counterfeit documents to obtain original SSNs for two fictitious children.
We subsequently recommended that SSA establish processes to independently
verify the birth records of all children. In response, SSA said that it
would conduct a study to determine the extent of the problem and the
potential for fraud in the enumeration of children through field offices.
Since that time however, in response to a July 2004 OIG report,25 SSA
stated that due to privacy restrictions for birth data arising from the
Health Insurance Portability and Accountability Act (HIPAA)26 and staff
resource constraints, it would not conduct the study. In place of the
study, SSA stated that it would review and evaluate the OIG's work before
making a final decision regarding this issue. In the same GAO report, we
also noted that SSA's policy for replacing Social Security cards, which
allows individuals to obtain up to 52 per year; as well as its limited
documentation requirements, also increased the potential for misuse of
SSNs. Of the 18 million cards issued by SSA in fiscal year 2004, nearly 70
percent were replacement cards. We recommended that SSA reassess its
policies in this area and develop options for deterring fraud and abuse.
As we began this review, a SSA policy official told us that the agency was
still assessing options.

24See GAO, Social Security Administration: Actions Taken to Strengthen
Procedures for Issuing Social Security Numbers to Noncitizens, but Some
Weaknesses Remain,

GAO-04-12 (Washington, D.C.: Oct. 15, 2003).

25Social Security Administration, Office of the Inspector General,
Enumeration of Children Under Age 1: Opportunity to Reduce the Risk of
Improper Social Security Number Attainment, A-08-04-14043 (July 2004).

26HIPAA requires health care organizations and providers to meet certain
privacy standards with respect to personal health information, such as
having appropriate safeguards in place to protect the information.

We recognize that the replacement card issue applies to all SSN holders
and is not unique to children's SSNs. However, there is a critical
relationship between SSA's policies for enumerating children under age 1
and issuing replacement cards that could be targeted by those seeking to
fraudulently obtain valid SSNs. We are particularly concerned that
individuals could first obtain original valid SSNs for fictitious children
by exploiting weaknesses in SSA's current verification process. These
individuals could then take advantage of SSA's replacement card policies
to obtain excessive amounts of cards for resale to persons seeking to
establish new identities, apply for state and local benefit programs,
and/or work illegally in the United States. Such SSNs and replacement
cards would be a valuable commodity to perpetrators of fraud because they
are considered valid numbers in SSA's records and would receive an
affirmative match response in the event that an employer queried SSA's
system to verify the name and SSN.

Field tests we conducted during this engagement underscore the urgent need
to address this issue. Using the same original SSNs we obtained last year
for two fictitious children under age 1, our investigators obtained
numerous replacement cards over a relatively short period. By posing as
parents of these children, two investigators obtained eight replacement
cards in less than 6 weeks, before SSA field office staff placed an alert
on the two SSN records indicating a suspicion of fraud, which restricted
our investigators from receiving additional replacement cards. In
particular, our investigators obtained seven SSN cards by applying in
person at various SSA field offices and one card by mail using either a
counterfeit baptismal record or an immunization record as evidence of the
children's identity, as well as counterfeit driver licenses as proof of
identity for themselves. For the mail-in application, they submitted a
baptismal record and an expired driver's license and still received the
card. This effort revealed inconsistencies in staff acceptance of
baptismal records, which are a valid proof of a child's identity under
SSA's current guidelines. Some staff accepted these certificates, while
others rejected them. We found, however, that staff consistently accepted
immunization records, which contain less identifying information about the
child than baptismal records. This effort demonstrates that once a person
obtains a SSN fraudulently, the problem can be perpetuated and exacerbated
through the request for numerous replacement cards. It also shows that
visual inspections alone are often insufficient to detect fraudulent
documents.

Recognizing the weaknesses in SSA's enumeration processes, just prior to
the issuance of this report, the Congress passed the Intelligence Reform
and Terrorism Prevention Act of 2004. This act gave SSA 1 year to

Conclusions

implement regulations for independently verifying the birth documents of
all SSN applicants except for EAB and limited the issuance of SSN
replacement cards to 3 annually and 10 over an individual's lifetime.

SSNs are essential for functioning in our society, and as a consequence,
they are highly vulnerable to misuse. Safeguarding the integrity of
children's SSNs is particularly important, since the theft of a child's
SSN may go unnoticed for years.

While SSA has taken steps to strengthen its enumeration processes, several
vulnerabilities remain. Because SSA does not conduct comprehensive
integrity reviews of vital statistics agencies or require that these
agencies conduct similar reviews of hospitals, SSA lacks information to
assess its potential exposure to error or fraud, identify aspects of the
birth registration process that are most problematic, and develop
safeguards to ensure the integrity of the data it relies on to enumerate
millions of children. This situation is compounded by the fact that SSA
has never coordinated with state audit agencies that have reviewed vital
statistics offices in recent years and identified serious management and
internal control weaknesses. In addition, SSA's limited approach to
education and outreach to hospitals transmitting SSN requests could be a
factor in some parents submitting multiple applications and receiving more
than one SSN for their child-ultimately increasing the program's
vulnerability to fraud.

While enhanced oversight and management is key to SSA's efforts, having an
efficient mechanism to assist field staff in verifying the birth
information of child SSN applicants is equally important. However, SSA's
field office verification process is generally labor-intensive, slow, and
requires manual handling of paper birth certificates, with few controls
over these sensitive documents. As the EVVE pilot demonstrated, viable
technological options currently exist to enhance the exchange of vital
statistics data between SSA and the states. We recognize that potential
barriers, such as system implementation, may be difficult to overcome
without congressional intervention. However, we continue to believe that
better coordination and data sharing between SSA and vital statistics
agencies nationwide could further strengthen SSA's processes and address
many of the factors that allow identity theft to occur.

Finally, as our audit work and previous engagements show, SSA's processes
for verifying the birth records of children under age 1 and its policies
for issuing replacement cards expose the agency to fraud. The

recently passed Intelligence Reform and Terrorism Prevention Act of 2004
includes specific requirements to address these weaknesses. It is
imperative that SSA act promptly in developing clear regulations and
timeframes for the implementation of these additional program integrity
provisions.

Matter for Congressional Consideration

Recommendations for Executive Action

In light of the key role certified birth certificates play in SSA's
enumeration processes and the potential for identity thieves to use
fraudulent birth documents to obtain SSNs, the Congress should consider
authorizing the development of a cost-effective nationwide system to
electronically verify these documents.

To strengthen the integrity of SSNs issued to children, we recommend that
the Commissioner of Social Security:

o  	Explore options for improving internal control mechanisms to ensure
the reliability of enumeration data from vital statistics agencies and
hospitals. This could include conducting periodic integrity reviews of
vital statistics agencies and requiring these agencies to perform periodic
audits of hospitals and birthing centers.

o  	Establish a mechanism to better coordinate with external audit
agencies that periodically conduct reviews of states' birth registration
and certification processes. Monitor the findings and recommendations of
such reviews to mitigate risks to SSA's enumeration processes.

o  	Provide additional education and outreach to hospitals to ensure they
provide consistent information to parents to decide which process best
meets their needs and to minimize second-time requests that might cause
the issuance of multiple SSNs.

o  	Establish procedures for handling, securing, and tracking birth
certificates obtained for verification purposes to fully protect against
potential fraud and abuse.

Agency Comments 	We obtained written comments on a draft of this report
from the Commissioner of SSA. SSA's comments are reproduced in appendix
II. SSA also provided additional technical comments, which have been
incorporated in the report as appropriate. SSA agreed with three of four

recommendations we made to the Commissioner to strengthen SSA's processes
and internal controls over the issuance of SSNs for children.

SSA disagreed with our recommendation that it explore options for
improving internal control mechanisms to ensure the reliability of
enumeration data from vital statistics agencies and hospitals. SSA noted
that it is not within its purview to ensure the reliability of state
agency or hospital enumeration data. However, we continue to believe that
such actions are needed because the agency uses these data to assign SSNs
for over 90 percent of U.S. citizens it enumerates. We believe that as the
agency charged with issuing SSNs, SSA bears a responsibility for ensuring
that vital statistics agencies have adequate procedures, and internal
controls to ensure that the data hospitals provide are reliable and
protected against fraud. Accordingly, we believe that SSA could include a
provision in its EAB contracts to allow SSA to conduct periodic reviews of
the reliability of EAB information at vital statistics agencies.
Similarly, we believe that SSA could also encourage vital statistics
agencies to conduct such reviews at hospitals.

SSA agreed with our recommendation and fully supported EAB outreach
efforts to hospitals, and noted that they are currently supplying SSA
field offices with materials for distribution to their service area
hospitals. However, as our report shows, field office officials we spoke
to were often unaware of this effort. Therefore, SSA should take
sufficient steps to ensure that field office staffs are supplied with
appropriate EAB materials and that hospitals actually receive these
materials.

SSA also agreed with our recommendation to better coordinate with audit
agencies and stated that the agency will encourage state auditing agencies
to share report results so that SSA can monitor the findings and
recommendations to mitigate risks to the enumeration process.

Finally, SSA agreed with our recommendation that it establish procedures
for handling, securing and tracking birth certificates obtained for
verification purposes, and stated that recently implemented procedures
adequately addressed our concern. While we commend SSA for implementing
procedures for disposing of birth certificates after they are verified, we
found no procedures in the materials provided with SSA's response that
addressed how birth certificates are to be tracked and secured from the
time of receipt through disposal. We encourage SSA to establish or better
define procedures in existing POMS regulations in these areas to protect
birth certificates against theft or inappropriate disclosure and misuse.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its
issue date. At that time, we will send copies of this report to the
Commissioner of SSA, the Secretary of Homeland Security, the states and
three jurisdictions' vital statistics offices, and other interested
parties.
Copies will also be made available to others 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 questions concerning this report, please
call me on (202) 512-7215. Key contributors to this report are listed in
appendix III.

Sincerely yours,

Barbara D. Bovbjerg
Director, Education, Workforce,

and Income Security Issues

                       Appendix I: Scope and Methodology

The Chairman of the Senate Committee on Finance asked us to document the
Social Security Administration's (SSA) current processes and internal
controls for issuing Social Security numbers (SSN) and replacement cards
to U.S.-born children under the age of 18 and identify any weaknesses that
may affect SSA's ability to ensure the integrity of the SSN and the
efficiency of enumeration processes. To address the Chairman's questions,
we examined SSA's enumeration policies, procedures, and internal controls
and obtained information on key initiatives planned and undertaken to
strengthen SSA's processes. To document SSA's current processes and
internal controls, we examined SSA's Program Operations Manual System
(POMS) for applicable requirements and held structured interviews with SSA
headquarters officials to discuss the processes used to enumerate
U.S.-born children. We also reviewed SSA's current processes for
enumerating children to identify areas where existing and recent changes
to POMS were not being followed, or where POMS guidance was not sufficient
to ensure the integrity of the identified enumeration processes.

We identified two processes-Enumeration at Birth (EAB), a program set up
to let parents request their child's SSN through hospitals and vital
statistics agencies, and another that requires application through SSA
field offices. For the EAB process, we reviewed EAB contracts for
individual states and information on timeliness and accuracy for
enumerating children. We also documented the policies and procedures for
select hospitals and vital statistics agencies that facilitate SSA's
process for enumerating newborns. We contacted the National Association
for Public Health Statistics and Information Systems (NAPHSIS), which
represents vital statistics agencies, to gain a better understanding of
their role in EAB. We selected vital statistics agencies, in part, based
on best practices identified by SSA's EAB Project Officer and the
Executive Director of NAPHSIS, and in some cases, based on the agencies'
lengthy timeframes for submitting EAB information to SSA. In addition, we
worked with the vital statistics agencies and SSA to identify hospitals
with relationships to the selected vital statistics agencies that had a
high volume of births and that participated in the EAB program. In one
jurisdiction, we also visited an organized birthing center to better
understand any differences between a high-volume physician-based hospital
and a midwife-based birthing facility's birth registration process. From
both the vital statistics agencies and hospitals, we collected and
reviewed information related to the required birth registration process as
well as examined policies and procedures related to the electronic birth
certificate software to better understand the variances between individual
states and jurisdictions.

Appendix I: Scope and Methodology

To identify weaknesses that may affect SSA's ability to efficiently
enumerate children and ensure the integrity of the SSN, we collected and
examined information on SSA's enumeration initiatives, the results of
prior internal reviews, and studies performed by SSA's Office of the
Inspector General (OIG) and the Office of Quality Assurance and
Performance Assessment. We documented these officials' perspective on
SSA's enumeration initiatives and identified areas where vulnerabilities
and gaps exist in SSA's implementation of these policies through
interviews. In addition, we examined external reviews conducted by
individual state comptrollers and inspectors general to determine existing
weaknesses and concerns regarding state vital statistics agencies' birth
registration and certification processes. To identify these reports, we
worked with the National Association of State Auditors, Comptrollers and
Treasurers (NASACT) to contact each of their membership, which consists of
the offices of state auditor, state comptroller, or state treasurer in the
50 states, the District of Columbia, and U.S. territories. In addition, we
contacted state auditing and inspectors general divisions in states and
jurisdictions that we visited. After receipt of specific audit and
investigative reports from responsive states, we examined each report for
the adequacy of its methodology and the validity of its conclusions. We
also contacted NAPHSIS to identify weaknesses and recommended areas of
improvement for an electronic verification pilot project it had with SSA
called the Electronic Verification of Vital Events (EVVE). We examined the
EVVE evaluation study, which highlighted analysis of EVVE's error rates,
query types, and records of no-matches. Also, our Office of Special
Investigations tested SSA's enumeration practices to illustrate how SSA's
policy on replacing Social Security cards can be abused. By posing as
parents of the two fictitious children we previously had enumerated by
SSA, and reported on in October 2003, our investigators used these SSNs
and counterfeit documents to obtain SSN replacement cards through visits
to local SSA field offices.1 In addition, we also solicited replacement
cards through the mail.

We conducted our review at SSA headquarters in Baltimore, Maryland, and at
four regional offices-Atlanta, New York, Philadelphia, and San
Francisco-and 10 field offices. We selected the SSA regional and field
offices based on their geographic location, the volume of enumeration

1See GAO, Social Security Administration: Actions Taken to Strengthen
Procedures for Issuing Social Security Numbers to Noncitizens, but Some
Weaknesses Remain,

GAO-04-12, (Washington, D.C.: Oct. 15, 2003).

Appendix I: Scope and Methodology

activity, and participation in certain enumeration projects. We also spoke
with officials in vital statistics agencies and medical facilities in the
states of California, Georgia, Kentucky, and Maryland and the city of New
York. For our work on replacement cards, our Office of Special
Investigations conducted its work in seven SSA field offices located in
the District of Columbia, Maryland, and Virginia. We performed our work
between January and December 2004 in accordance with generally accepted
government auditing standards.

Appendix II: Comments from the Social Security Administration

Appendix II: Comments from the Social Security Administration

Appendix II: Comments from the Social Security Administration

Appendix II: Comments from the Social Security Administration

Appendix III: GAO Contacts and Staff Acknowledgments

GAO Contacts 	Barbara Bovbjerg, (202) 512-7215 Daniel Bertoni, (202)
512-5988 Jacqueline Harpp, (202) 512-8380

Staff 	The following team members made key contributions to this report:
Richard Burkard, Jean Cook, Mary Crenshaw, Paul Desaulniers, Jason

Acknowledgments Holsclaw, Corinna Nicoloau, Andrew O'Connell, and Roger
Thomas.

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