Social Security Administration: Significant Challenges Await New
Commissioner (Letter Report, 02/20/97, GAO/HEHS-97-53).

GAO reviewed the challenges facing the new Commissioner of the Social
Security Administration (SSA).

GAO found that: (1) SSA is ahead of many federal agencies in developing
strategic plans, measuring its service to the public, and producing
complete, accurate, and timely financial statements; (2) this gives SSA
a sound base from which to manage significant current and future
challenges; (3) these challenges include the aging of the baby boom
generation, coupled with increasing life expectancy and the declining
ratio of contributing workers to beneficiaries, which will place
unprecedented strains on the Social Security program in the next
century; (4) unless Congress acts, Social Security funds will be
inadequate to pay all benefits by 2029; (5) SSA, however, has not
preformed the research, analysis, and evaluation needed to inform the
public debate on the future financing of Social Security, the most
critical long-term issue facing SSA; (6) SSA has recently taken initial
steps to more actively participate in the financing debate by
reorganizing and strengthening its research, policy analysis, and
evaluation activities; (7) also challenging SSA have been disability
caseloads that have grown by nearly 70 percent in the past decade; (8)
to its credit, SSA has undertaken an important effort to fundamentally
redesign its inefficient disability claims process, however, while SSA
has begun many of its planned initiatives, none is far enough along for
SSA to know whether specific proposed process changes will achieve the
desired results; (9) SSA has not sufficiently promoted return-to-work
efforts in the administration and design of its disability programs;
(10) if even an additional 1 percent of the 6.6 million working-age
people receiving disability benefits were to leave SSA's disability
rolls by returning to work, lifetime cash benefits would be reduced by
an estimated $3 billion; (11) in its Supplemental Security Income
program, SSA has not done enough to combat fraud and abuse and address
program weaknesses; (12) SSA faces increasing responsibilities in the
future and must manage its growing workloads with reduced resources;
(13) to successfully meet its workload challenges, SSA knows that it
must increasingly rely on technology and build a workforce with the
flexibility and skills to operate in a changing environment; (14) SSA
faces significant challenges, however, in modernizing its information
systems, a complex, multiyear effort that could easily cost billions of*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-97-53
     TITLE:  Social Security Administration: Significant Challenges 
             Await New Commissioner
      DATE:  02/20/97
   SUBJECT:  Social security benefits
             Disability benefits
             Claims processing
             Information technology
             Systems conversions
             Customer service
             Internal controls
             Federal agency reorganization
             Strategic planning
             Human resources training
IDENTIFIER:  Social Security Disability Insurance Program
             Social Security Program
             Social Security Trust Fund
             Old Age Survivors and Disability Insurance Program
             Supplemental Security Income Program
             National Performance Review
             SSA Plan for Achieving Self Support Program
             SSA Personal Earnings and Benefits Estimate Statement
             
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Cover
================================================================ COVER


Report to the Committee on Finance, U.S.  Senate, and the Committee
on Ways and Means, House of Representatives

February 1997

SOCIAL SECURITY ADMINISTRATION -
SIGNIFICANT CHALLENGES AWAIT NEW
COMMISSIONER

GAO/HEHS-97-53

Challenges Await New Commissioner

(105938)


Abbreviations
=============================================================== ABBREV

  CDR - continuing disability review
  DCM - disability claim manager
  DI - Disability Insurance
  GPRA - Government Performance and Results Act of 1993
  HHS - Department of Health and Human Services
  NPR - National Performance Review
  OASI - Old Age and Survivors Insurance
  PASS - Plan for Achieving Self-Support
  SSA - Social Security Administration
  SSI - Supplemental Security Income

Letter
=============================================================== LETTER


B-275889

February 20, 1997

The Honorable William V.  Roth, Jr.
Chairman
The Honorable Daniel Patrick Moynihan
Ranking Minority Member
Committee on Finance
United States Senate

The Honorable Bill Archer
Chairman
The Honorable Charles B.  Rangel
Ranking Minority Member
Committee on Ways and Means
House of Representatives

The Social Security Administration (SSA) administers the nation's
largest federal program--Social Security--as well as the nation's
largest cash welfare program, Supplemental Security Income (SSI). 
SSA's expenditures totaled $363 billion in fiscal year 1995, nearly
one-fourth of the nation's $1.5 trillion federal budget. 

SSA's programs touch the lives of almost every individual in this
country.  Social Security's Old Age and Survivors Insurance (OASI)
and Disability Insurance (DI) programs provide benefits to retired
and disabled workers and their dependents and survivors; SSI provides
assistance to the needy aged, blind, or disabled.  In 1995, 50
million beneficiaries--about one out of every five individuals in
this country--received benefits from SSA each month.  With a staff of
65,000, SSA also records the wages of nearly every U.S.  worker each
year and issued almost 17 million Social Security cards in 1995. 
Moreover, SSA maintains a large and visible presence in communities
nationwide.  In 1995 alone, an estimated 24 million people visited
SSA's 1,300 field offices, and SSA received 62 million calls on the
agency's nationwide toll-free 800 number. 

SSA recognizes that the American public depends on it to quickly and
accurately provide benefits, properly record workers' earnings, and
effectively safeguard benefit programs from fraud and abuse.  Any
failure to do so seriously undermines the public's confidence in
government and its ability to efficiently and cost-effectively
administer programs and protect taxpayer dollars.  Yet as SSA
acknowledges, public confidence in its programs is low and has been
low for some time.  Although much of this lack of confidence stems
from concerns about the future solvency of the Social Security
system, public confidence also has been eroded by reports of fraud
and abuse.  Media accounts of problems such as prisoners erroneously
receiving disability checks and allegations that immigrants and
children are feigning mental illness to obtain SSI undermine the
public's trust in SSA and in the federal government. 

To bolster SSA's ability to address critical policy issues and
correct programmatic weaknesses, the Congress enacted legislation
making SSA independent of the Department of Health and Human Services
(HHS) as of March 31, 1995.  In establishing SSA's independence, the
Congress recognized the importance of strong and stable leadership
for the agency.  As we noted in our February 1995 report on SSA's
transition to independence,\1 such independence heightens the
importance of SSA's playing a strong leadership role in addressing
long-standing problems and preparing for future challenges. 

After SSA's first year as an independent agency, we reported on its
progress in meeting current and future challenges.\2

These challenges included managing for results and accountability;
funding future retirement benefits; rethinking disability programs;
combating SSI fraud, waste, and abuse; handling increasing workloads
with reduced resources; and establishing effective leadership.  This
report updates and expands on the challenges facing SSA's new
commissioner and the agency.\3

To do our work, we drew from completed and ongoing GAO work on Social
Security issues and reviewed recent legislation affecting SSA.  We
also reviewed SSA documents and spoke with SSA officials, selected
officials of the Advisory Council on Social Security and the Social
Security Advisory Board, and other experts to determine SSA's
progress in addressing its challenges and what else is needed to make
SSA a premier agency.  We did our work from October 1996 to February
1997 in accordance with generally accepted government auditing
standards. 


--------------------
\1 Social Security Administration:  Leadership Challenges Accompany
Transition to an Independent Agency (GAO/HEHS-95-59, Feb.  15, 1995). 

\2 Social Security Administration:  Effective Leadership Needed to
Meet Daunting Challenges (GAO/T-OCG-96-7, July 25, 1996, and
GAO/HEHS-96-196, Sept.  12, 1996). 

\3 The current commissioner is scheduled to leave office on Feb.  28,
1997. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

SSA is ahead of many federal agencies in developing strategic plans;
measuring its service to the public; and producing complete,
accurate, and timely financial statements.  This gives the agency a
sound base from which to manage significant current and future
challenges.  These challenges include the aging of the baby boom
generation, coupled with increasing life expectancy and the declining
ratio of contributing workers to beneficiaries, which will place
unprecedented strains on the Social Security program in the next
century.  Unless the Congress acts, Social Security funds will be
inadequate to pay all benefits by 2029.  SSA, however, has not
performed the research, analysis, and evaluation needed to inform the
public debate on the future financing of Social Security--the most
critical long-term issue facing the agency.  SSA has recently taken
initial steps to more actively participate in the financing debate by
reorganizing and strengthening its research, policy analysis, and
evaluation activities. 

Also challenging SSA have been disability caseloads that have grown
by nearly 70 percent in the past decade.  To its credit, SSA has
undertaken an important effort to fundamentally redesign its
inefficient disability claims process.  However, while SSA has begun
many of its planned initiatives, none is far enough along for the
agency to know whether specific proposed process changes will achieve
the desired results.  Moreover, SSA has not sufficiently promoted
return-to-work efforts in the administration and design of its
disability programs.  If even an additional 1 percent of the 6.6
million working-age people receiving disability benefits were to
leave SSA's disability rolls by returning to work, lifetime cash
benefits would be reduced by an estimated $3 billion.  In its SSI
program, SSA has not done enough to combat fraud and abuse and
address program weaknesses. 

SSA faces increasing responsibilities in the future and must manage
its growing workloads with reduced resources.  In early 1996, SSA
estimated that it would need about 76,000 work-years to handle its
growing workloads if it conducts business as usual.  It expected to
do this work with fewer work-years than it has today.  To
successfully meet its workload challenges, SSA knows that it must
increasingly rely on technology and build a workforce with the
flexibility and skills to operate in a changing environment.  SSA
faces significant challenges, however, in modernizing its information
systems--a complex, multiyear effort that could easily cost billions
of dollars.  Compounding this challenge will be the possible loss of
many senior managers and executives--over the next 5 years, about
half of SSA's senior executives will be eligible to retire. 
Moreover, SSA faces difficult decisions on how best to deliver
services in the future. 

At this critical juncture, effective leadership is needed so the
agency can take the following actions to better ensure its success in
the 21st century:  inform the national debate on Social Security
financing issues; complete its redesign of the disability claims
process and promote return to work in its disability programs;
enhance efforts to ensure program integrity, while quickly and
effectively implementing many reforms; and make the technology
enhancements and workforce decisions needed to meet increasing
workloads with fewer resources. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The three major programs that SSA administers--OASI, DI, and
SSI--provide cash income support to diverse populations.  The Social
Security Act established the OASI program to protect workers and
their dependents and survivors from wages lost due to retirement. 
DI, enacted in 1956, provides monthly cash benefits to disabled
workers and their families.  The OASI and DI programs are funded
through payroll taxes and are based on the contributions of
individual workers and their employers.  About 90 percent of all U.S. 
jobs are covered by these insurance programs.  In 1995, the OASI and
DI programs paid over $326 billion in benefits to more than 43
million eligible beneficiaries. 

SSI, enacted in 1972, provides cash assistance to aged, blind, or
disabled individuals with limited income and assets.  The federal SSI
program replaced federal grants to state-administered programs, which
varied substantially in benefit levels.  The Congress intended SSI as
a supplement to the OASI and DI programs for those with little or no
Social Security coverage.  Federal SSI benefits are funded by general
revenues and based on financial need.  In 1995, over 6 million
recipients received about $25 billion in federal benefits, including
2 million individuals aged 65 and over and almost 1 million children. 

To administer these three programs, SSA must perform the following
essential tasks:  issuing Social Security numbers to individuals;
maintaining earnings records for workers by collecting wage reports
from employers, which are used to determine the dollar amount of OASI
and DI benefits; and processing benefit claims for all three
programs.  SSA must also determine which applicants for disability
benefits under DI and SSI meet the federal definition of
disability;\4 for SSI, the agency must also determine applicants'
levels of income and assets.  In addition, SSA performs many actions
to maintain accurate records for program recipients once they are
enrolled.  Moreover, SSA must periodically conduct reviews of the
health status of disabled beneficiaries to ensure that those no
longer eligible are removed from the rolls.  For SSI recipients, SSA
must also review their financial status.  Table 1 gives an overview
of the three programs. 



                                     Table 1
                     
                            Overview of SSA's Programs

                    OASI                DI                  SSI
------------------  ------------------  ------------------  --------------------
Eligibility         Age 62 or over      Disabled persons    Low-income aged,
criteria            with insured        with insured        blind, or disabled
                    status\a            status\a            adults with limited
                                                            work history; blind
                                                            or disabled low-
                                                            income children

Funding source      Payroll taxes       Payroll taxes       General revenues

Average monthly     $688\b              $703\c              $334\d
benefit for
December 1995

Recipients in       37.5                5.9                 6.2
December 1995
(in millions)

Total benefit       $290,776            $36,014             $24,652\d
outlays in 1995
(in millions)
--------------------------------------------------------------------------------
\a Insured status is defined in quarters of coverage.  An individual
must earn 40 quarters of coverage to be insured by OASI and 20
quarters of coverage (within the last 40) to be insured by DI.  In
1996, for example, 1 quarter of coverage was earned for each $640 of
income; thus, 4 quarters of coverage were earned if the worker's
total income was at least $2,560. 

\b Number reflects retired workers only. 

\c For disabled workers only. 

\d Some states supplement SSI payments; this amount is the federal
share only. 


--------------------
\4 The Social Security Act generally defines disability as the
inability to engage in substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to last
for a continuous period of at least 12 months or result in death. 


   SSA STEPS AHEAD WITH CUSTOMER
   SERVICE FOCUS AND
   RESULTS-ORIENTED MANAGEMENT
------------------------------------------------------------ Letter :3

At this time of heightened attention to the costs and effectiveness
of all federal programs, the Congress and the administration have
supported efforts to promote a more efficient federal government that
is responsive and accountable to the public.  This is especially
critical at SSA because the agency deals with thousands of
individuals daily and nearly 90 percent of its employees directly
serve the public.  SSA has surpassed many federal agencies in these
efforts by assessing and improving its service to the public, gaining
experience in managing for results, and emphasizing financial
accountability. 

Two federal efforts, the Government Performance and Results Act of
1993 (GPRA) and the National Performance Review (NPR), promote
cost-effective service delivery governmentwide.  To ensure that it is
meeting the needs of the public and the requirements of GPRA and NPR,
SSA regularly seeks customer feedback through mail and telephone
surveys, comment cards in its field offices, focus groups, and
special studies.  It has also taken steps to use this information to
improve its services.  As demand for its 800-number telephone service
increased, for example, SSA found its service lacking.  Customer
feedback indicated that this convenient telephone service was
important to the public, yet SSA's performance data showed that in
fiscal year 1995, the "busy" rate for the 800 number was almost 49
percent; only about 74 percent of callers were able to get through
within 5 minutes of their first try.  SSA set a goal of answering 85
percent of its 800-number calls within 5 minutes of a caller's first
try in fiscal year 1996 and made operational changes to increase
public access.  As a result, the busy rate decreased to 34 percent,
and 83 percent of calls were answered within 5 minutes.  For fiscal
year 1997, SSA's goal is to answer 95 percent of its 800-number calls
within 5 minutes of a caller's first try.  We are currently reviewing
SSA's efforts to improve this service. 

SSA has also worked under GPRA to strengthen its strategic management
process and to identify and develop performance measures to help its
managers, the Congress, and the public assess how well it is
accomplishing its mission.  During SSA's recently completed
participation as a pilot agency under GPRA, SSA gained experience in
developing specific and quantifiable annual performance goals and
measures.\5 On the basis of this experience, it expects to develop
performance measures for fiscal year 1998 that focus more on outcomes
and results than in previous years.  For SSA's fiscal year 1997 goals
and performance measures, see appendix I. 

In addition, SSA is a leader among federal agencies in producing
complete, accurate, and timely financial statements that promote
accountability to taxpayers.\6 For fiscal years 1995 and 1996, SSA
issued audited financial statements 3 months before its legal
mandate.  Moreover, SSA was among the first federal agencies to
produce an accountability report, which is designed to consolidate
current reporting requirements under various laws and provide a
comprehensive picture of an agency's program performance and its
financial condition.  In addition, for fiscal year 1996, as a pilot
project, SSA and its Office of Inspector General collaborated to
further streamline financial reporting by including the Inspector
General's Semiannual Report to Congress as part of the Accountability
Report. 

To be most effective, SSA's ongoing efforts to cost effectively serve
its customers and be accountable to taxpayers will need to be well
coordinated and continually improved.  The agency has taken steps to
better integrate its strategic planning, performance measurement, and
customer service efforts and to improve the ways that it collects and
uses customer feedback.  SSA faces challenges, however, as do all
federal agencies, in integrating results-oriented management into its
agency culture and daily activities.\7

Moreover, SSA must determine how to balance its customers' needs and
expectations with those of taxpayers by assessing the
cost-effectiveness of its customer service improvements. 


--------------------
\5 As a pilot agency, SSA had to prepare GPRA performance plans for
fiscal years 1994 to 1996.  By the end of fiscal year 1997, GPRA
requires each federal agency to develop a strategic plan that covers
at least 5 years.  GPRA also requires each agency to develop annual
performance plans beginning with a plan for fiscal year 1999.  The
first plan is due to the Office of Management and Budget in the fall
of 1997. 

\6 This financial reporting is required under the Chief Financial
Officers Act of 1990 and the Government Management Reform Act of
1994. 

\7 For information on successful GPRA implementation practices, see
Executive Guide:  Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996). 


   LONG-TERM SOLVENCY IS
   THREATENED; SSA IS NOT YET
   ACTIVELY PARTICIPATING IN
   FINANCING DEBATE
------------------------------------------------------------ Letter :4

As the baby boom generation ages, growing numbers of people will
receive Social Security retirement and survivors benefits through
OASI in the years to come, as shown in figure 1.  By the year
2015--as baby boomers begin entering their mid-60s--the numbers of
individuals receiving benefits will reach an estimated 50.4 million: 
more than one-third greater than the 37.4 million people receiving
Social Security retirement and survivors benefits in 1995.  Once on
the rolls, retirees can be expected to receive benefits for longer
time periods than past recipients.  A 65-year-
old male who began receiving Social Security benefits in 1940--the
first year SSA began paying monthly benefits--was expected to live,
on average, about an additional 12 years.  By 2015, a 65-year-old
male will be expected to live about an additional 16 years--a
33-percent increase.  During that same time period, the life
expectancy for women aged 65 will increase by almost 50 percent--from
an average of over 13 years to an average of nearly 20 years. 
Meanwhile, the ratio of contributing workers to beneficiaries will
decline.  By 2015, an estimated 2.6 workers will be paying taxes into
the Social Security system per beneficiary; in 1950, 16.5 workers
were paying Social Security taxes per beneficiary. 

   Figure 1:  Growth in Social
   Security Beneficiaries,
   1950-2030

   (See figure in printed
   edition.)

Note:  Includes recipients of OASI only. 

Source:  1996 Annual Report of the Board of Trustees of the Federal
Old-Age and Survivors Insurance and Disability Insurance Trust Funds. 

This retirement explosion threatens the long-term solvency of the
Social Security system.  Beginning in 2012--15 years from now--
program expenditures are projected to exceed tax income.  By 2029,
without corrective legislation, the trust funds are expected to be
depleted, leaving insufficient funds to pay the expected level of
OASI and DI benefits.  (In an upcoming report, we will discuss in
greater detail the issues affecting the major sources of retirement
income--Social Security, private pensions, savings, and earnings.)

Concerns about the long-term solvency of the Social Security system
are fueling a public debate about the fundamental structure of this
system.  The Advisory Council on Social Security,\8 for example, has
put forth three different approaches to addressing the Social
Security system's long-term deficit.  All three approaches call for
some portion of Social Security payroll taxes to be invested in the
stock market.\9 Two of these approaches call for allowing individuals
to invest some portion of their payroll taxes in individual
retirement accounts.  This would be a significant departure from the
current program design, in which benefits are based on past earnings
and trust fund moneys are invested and managed centrally.  Given the
magnitude of the financial problems facing the Social Security system
and the nature of the proposals for changing the system, we can
expect the debate over the financing and structure of the Social
Security system to continue and intensify in the coming years. 


--------------------
\8 Before the independence legislation (P.L.  103-296), the Social
Security Act provided for the appointment of a nonpartisan Advisory
Council every 4 years to examine issues affecting the OASI, DI, and
Medicare programs.  P.L.  103-296 provided that this Council would be
the last. 

\9 Social Security payroll taxes that accumulate in the trust fund
reserves are currently invested in U.S.  Treasury bonds. 


      SSA IS TAKING INITIAL STEPS
      TO BE MORE ACTIVE
---------------------------------------------------------- Letter :4.1

In our report on SSA's transition to independence, we noted that the
agency's independence would heighten the need for it to work with the
Congress in developing options for ensuring that revenues are
adequate to make future Social Security benefit payments.  SSA could,
for example, analyze options and assess their possible effects on
individuals and on SSA's operations.  Nearly 2 years after gaining
independence, however, SSA is not yet ready to fully support
policymakers in the current public debate on financing issues. 

SSA has acknowledged that it has not undertaken the policy and
research activities it needs to examine critical issues affecting its
programs, including long-term financing, and to provide support to
policymakers.  The agency recognizes the need to be more active in
these areas and, in May 1996, took steps to reorganize and strengthen
its policy analysis, research, and evaluation offices.  It believes
this reorganization will better position it to take a leadership role
in critical policy and research issues related to its programs.  By
November 1996, SSA's reorganized Office of Research, Evaluation, and
Statistics had formed new links with outside experts to strengthen
its research and evaluation capabilities.  In addition, it had
created an office to coordinate all policy planning activities. 
Although this is a positive first step, SSA officials also
acknowledge that they are just beginning to focus on Social
Security's long-term solvency. 

SSA is in a unique position to inform policymakers and the public
about the nature of long-term financing issues.  Focus groups
conducted by SSA have demonstrated that the public's knowledge of
Social Security programs is generally low and the public's confidence
in the Social Security system is undermined by its future financing
problems.  To address these issues, SSA is conducting a public
education campaign that discusses what the current system offers in
disability, retirement, and survivors benefits.  It also emphasizes
that the Social Security system can pay benefits for many more years
and that the Congress has time to act before the trust funds are
depleted.  SSA, however, is not discussing options for maintaining or
changing the current system.  Feedback SSA has received from its
focus groups indicates that addressing the public's lack of knowledge
without also discussing possible options for ensuring the system's
future solvency does not instill confidence and weakens the agency's
credibility with the public. 

We are concerned that SSA has not seized the opportunity as an
independent agency to speak out on the importance of addressing the
long-term financing issues sooner rather than later.  As we have
noted in our previous work,\10 the sooner action is taken to resolve
the future funding shortfall, the smaller the changes to the system
need to be and the more time individuals will have to adjust their
financial and retirement plans. 


--------------------
\10 Deficit Reduction:  Opportunities to Address Long-Standing
Government Performance Issues (GAO/T-OCG-95-6, Sept.  13, 1995). 


   SSA IS REDESIGNING ITS
   DISABILITY CLAIMS PROCESS BUT
   HAS PLACED LITTLE PRIORITY ON
   RETURN-TO-WORK EFFORTS
------------------------------------------------------------ Letter :5

In recent years, disability caseloads have faced unprecedented
growth.  To manage this caseload growth and the resulting slow
processing times, SSA plans to redesign and dramatically improve its
disability claims process.  However, the scope and complexity of its
many redesign initiatives risk the likelihood that SSA will
accomplish its redesign goals.  Moreover, while SSA is taking steps
to improve the process for moving eligible individuals onto the
disability rolls more quickly, it has not sufficiently emphasized
helping beneficiaries return to work and leave the disability rolls. 


      DISABILITY CASELOADS
      CONTINUE TO GROW
---------------------------------------------------------- Letter :5.1

During the past decade, SSA has faced significant increases in
caseloads and expenditures for its two disability programs--DI and
SSI.  DI and SSI caseloads and expenditures increased dramatically
between 1986 and 1995, and the pace of this growth accelerated in the
early 1990s.  In 1986, 4.4 million blind and disabled people under
age 65 received DI or SSI benefits; by 1995, this number had soared
to 7.5 million--a 69-percent increase.\11 As the number of DI and SSI
beneficiaries increased, so did the amount paid in cash benefits. 
The combined DI and SSI cash benefits increased from $25 billion to
$57 billion in 10 years.\12 Adjusted for inflation, the increase in
the value of these cash benefits was 66 percent. 

As these programs have grown, the characteristics of new
beneficiaries have changed in ways that pose additional challenges
for SSA.  Beneficiaries are, on average, younger and more likely to
have longer lasting impairments.  Increases in beneficiaries with
mental illness or mental retardation, especially, have driven this
trend.  Between 1982 and 1992, for example, mental impairment awards
to younger workers increased by about 500 percent.  This growing
proportion of younger beneficiaries with longer lasting impairments
means that the beneficiary population, on average, is likely to spend
more time on the disability rolls.  In 1992, for example, new DI
awardees were, on average, 48 years old.  Depending on the type of
impairment that qualified them for benefits, these beneficiaries
could spend nearly one-third of their adult lives on disability
before reaching age 65. 


--------------------
\11 This number includes about 900,000 children receiving SSI
disability benefits. 

\12 This includes DI payments to disabled workers aged 18 to 64 and
federal-only SSI payments to all SSI blind and disabled beneficiaries
regardless of age. 


      SUCCESS OF DISABILITY
      REDESIGN IS AT RISK
---------------------------------------------------------- Letter :5.2

As more and more people have filed for disability benefits, SSA has
been slow to process initial claims, and appealed case backlogs have
grown.  To manage the disability caseload growth, increase
efficiency, and improve service to its customers, SSA has started a
major effort to change how disability decisions are made.  Making
disability decisions is one of the agency's most demanding tasks; it
accounted for more than half of SSA's total administrative
budget--about $3 billion--in fiscal year 1995.  Even so, many
claimants face long waits for disability decisions.  As of June 1996,
the wait for initial decisions averaged 78 days for DI claims and 94
days for SSI claims, with an additional 373-day wait for appealed
decisions.  Overall, the current disability claims process is not
meeting the needs of claimants, the agency, or taxpayers. 

To deal with these problems, in 1993 SSA formed a team to
fundamentally rethink and develop a proposal to redesign the
disability claims process.  Efforts like SSA's--business process
reengineering--have been used successfully by leading private-sector
organizations to dramatically improve their operations.  In April
1994, we informed the Congress that the agency's redesign proposal
was its first valid attempt to address the fundamental changes needed
to cope with disability workloads.  At that time, however, we also
cautioned that many implementation challenges would have to be
addressed.\13 These include new staffing and training demands,
developing and installing technology enhancements, and confronting
entrenched cultural barriers to change. 

SSA's redesign plan, released in late 1994, had an extensive scope
and complexity.  It included 83 initiatives to be accomplished during
a 6-year period (fiscal years 1995 to 2000), with 38 of these to be
completed or into a research and development or testing phase by
September 30, 1996.  In a recent report on the implementation
challenges SSA faces as it redesigns its disability claims
process,\14 we concluded that SSA's disability redesign is proving to
be overly ambitious.  Undertaking many initiatives at one time is
likely to limit the chances for success and has already led to
implementation delays.  Although SSA has begun many of its planned
initiatives, none are complete and many are behind schedule. 
Consequently, SSA has not progressed as intended in determining
whether specific initiatives will achieve their desired results. 
Without concrete and measurable results, stakeholder support is hard
to maintain. 

SSA has faced significant challenges in implementing some of the more
complex initiatives.  For example, SSA considers technology vital to
redesign; it has, therefore, undertaken a technology initiative to
more fully automate the processing of disability claims.  Completion
of this initiative, however, has been delayed by more than 2 years
due to software development problems and the need for additional
testing to assess redesign changes. 

Another complex initiative involves consolidating two distinct jobs,
federal claims representative and state disability examiner, into a
new disability claim manager (DCM) position.  SSA is considering the
establishment of about 11,000 DCM positions in more than 1,350
federal and state locations, recruiting these DCMs from its current
workforce.  Before fully implementing the DCM position, SSA must
first provide several critical support features, including technology
enhancements and a simpler method for making disability decisions,
that SSA does not expect to be available for several years. 
Moreover, SSA has struggled to resolve stakeholder disagreements
among representatives of federal and state employees about this new
position.  SSA has determined that it will not decide to implement
the DCM until valid and reliable testing demonstrates that the
position is viable. 


--------------------
\13 Social Security Administration:  Major Changes in SSA's Business
Processes Are Imperative (GAO/T-AIMD-94-106, Apr.  14, 1994). 

\14 SSA Disability Redesign:  Focus Needed on Initiatives Most
Crucial to Reducing Costs and Time (GAO/HEHS-97-20, Dec.  20, 1996). 


      WEAK RETURN-TO-WORK EFFORTS
---------------------------------------------------------- Letter :5.3

Although SSA has focused on improving its processes for moving
eligible claimants onto the disability rolls, it has placed little
priority on helping them move off the rolls by obtaining employment. 
We have reported that SSA's disability programs are out of sync with
societal attitudes, as embodied in the Americans With Disabilities
Act, that have shifted toward goals of economic self-sufficiency and
the right of people with disabilities to fully participate in
society.\15

At one time, the common business practice was to encourage someone
with a disability to leave the workforce.  Today, however, a growing
number of private companies have been focusing on enabling people
with disabilities to return to work.  In contrast, SSA's programs
lack a focus on providing the support and assistance that many people
with disabilities need to return to work.  Eligibility requirements,
for example, focus on applicants' inabilities, not their abilities;
once on the rolls, beneficiaries receive little encouragement to use
rehabilitation services.  A greater emphasis on beneficiaries'
returning to work is needed to identify and encourage the productive
capacities of those who might benefit from rehabilitation and
employment assistance.  Although the main reason for emphasizing
returning to work is so that people maximize their productive
potential, it is also true that an estimated $3 billion could be
saved in subsequent years if only an additional 1 percent of the 6.6
million working-age people receiving disability benefits in 1995 were
to leave the rolls by returning to work. 

SSA needs to develop a comprehensive return-to-work strategy that
includes providing return-to-work assistance to applicants and
beneficiaries and changing the structure of cash and medical
benefits.  As part of an effort to place greater priority on
beneficiaries' returning to work, we recommended that SSA identify
legislative changes required to implement such a strategy.  Although
evaluating any SSA response to our recommendations would be
premature, we will continue to assess SSA's efforts to help
beneficiaries return to work. 

SSA has also missed opportunities to promote work among disabled
beneficiaries where it has the legislative authority to do so.  In
1972, the Congress created the plan for achieving self-support (PASS)
program as part of SSI to help low-income individuals with
disabilities return to work.\16 However, SSA has not translated the
Congress' broad goals for the PASS work incentive into a coherent
program design.  We recently reported that SSA needs to improve PASS
program management, and the agency has taken steps to better manage
the program in accordance with our recommendations. 


--------------------
\15 See SSA Disability:  Program Redesign Necessary to Encourage
Return to Work (GAO/HEHS-96-62, Apr.  24, 1996) and Social Security: 
Disability Programs Lag in Promoting Return to Work
(GAO/T-HEHS-96-147, June 5, 1996). 

\16 The PASS program provides for work-related expenses, such as
training or transportation, to be excluded when an individual's
eligibility or benefit amount is determined.  In some cases, this
allows DI beneficiaries who would not otherwise be eligible for SSI
to receive SSI benefits in addition to their DI benefits.  See PASS
Program:  SSA Work Incentive for Disabled Beneficiaries Poorly
Managed (GAO/HEHS-96-51, Feb.  28, 1996). 


   INADEQUATE MANAGEMENT AND
   OVERSIGHT OF SSI PROGRAM
------------------------------------------------------------ Letter :6

Limiting opportunities for fraud, waste, and abuse in government
programs is essential to promoting public confidence in the
government's ability to wisely use taxpayers' dollars.  Moreover,
problems in any one of the programs that SSA administers can
undermine confidence in all of its programs.  Recent media reports on
SSI fraud and abuse have focused attention on SSA's management of
this program.  Several of our recent reviews of the SSI program have
shown that SSA's oversight and management of SSI have been inadequate
and that the agency is not aggressively pursuing opportunities to
increase program efficiencies.  Although quantifying the extent of
fraud, waste, and abuse is difficult, we have repeatedly identified
program weaknesses that SSA needs to address.  This suggests more
pervasive problems with SSA's overall management of, and attention
to, the SSI program. 

SSA has awarded SSI benefits, for example, to unknown numbers of
non-English-speaking immigrants who are actually ineligible for SSI
benefits.\17 These awards are very costly to the government,
accounting in each case for thousands of dollars in improper payments
over the years.  And even though individual SSA field offices have
developed their own creative approaches to this problem, SSA's
programwide efforts for ensuring that only people who are eligible
for SSI benefits receive them have been limited. 

SSA has also lacked an effective program to prevent erroneous
payments to prisoners.  Even though prisoners are ineligible for SSI
if they have been in jail for 1 calendar month or longer, prisoners
in many large county and local jail systems have received millions of
dollars in cash benefits.\18 This means that taxpayers have been
paying twice to support these individuals--both for SSI benefits and
the cost of imprisonment.  SSA has begun to obtain information on
current prisoners; however, it has not tried to develop information
that would allow it to recover benefits paid to incarcerated or
formerly incarcerated individuals who may have received benefits in
prior years, although this information is available. 

In addition, SSA's PASS program internal controls have been
inadequate, compromising the program's integrity.  SSA's internal
program controls provide only limited guarantees that program moneys
are being used appropriately and taxpayer dollars spent judiciously. 
For example, the lack of adequate guidance on acceptable PASS
expenditures has resulted in inconsistent decisions on purchases.  In
one instance the proposed purchase of a $13,000 automobile was denied
because the applicant did not provide sufficient evidence to justify
the car's cost; in other instances, however, purchases of similarly
expensive vehicles were approved or less justification was provided
for purchases. 

SSA is also missing opportunities to more efficiently administer the
SSI program and to prevent or more quickly detect overpayments to
recipients.\19 Millions of dollars could be saved, according to our
estimates, if SSA field offices had and used direct online access to
computerized state income information during initial and subsequent
assessments of eligibility.  Although SSA has begun to develop and
expand online access in several field offices, it has not
aggressively sought to use this technology to reduce benefit
overpayments. 

SSA acknowledges that it needs to do more to prevent and detect
fraud, waste, and abuse.  It has several initiatives under way to
accomplish this, and we will be monitoring these efforts.  In
addition, the new SSA Inspector General's Office, created when SSA
gained independence from HHS, is increasing its emphasis on fraud and
abuse. 


--------------------
\17 Supplemental Security Income:  Disability Program Vulnerable to
Applicant Fraud When Middlemen Are Used (GAO/HEHS-95-116, Aug.  31,
1995). 

\18 Supplemental Security Income:  SSA Efforts Fall Short in
Correcting Erroneous Payments to Prisoners (GAO/HEHS-96-152, Aug. 
30, 1996). 

\19 Supplemental Security Income:  Administrative and Program Savings
Possible by Directly Accessing State Data (GAO/HEHS-96-163, Aug.  29,
1996). 


   SSA FACES DIFFICULT CHALLENGES
   IN PREPARING FOR FUTURE
   WORKLOADS
------------------------------------------------------------ Letter :7

While SSA is grappling with policy and program challenges, it will
also need to meet customer expectations in the face of growing
workloads and reduced resources.  SSA expects to redesign inefficient
work processes and modernize its information systems to increase
productivity, knowing that its customer service will deteriorate to
unacceptable levels if it continues to conduct business as in the
past.  In addition, it faces the urgent need to complete year 2000
software conversion to avoid major service disruption at the turn of
the century.  SSA will also need to effectively manage its workforce
and consider what service delivery structure will work best in the
future. 


      SSA MUST MANAGE GROWING
      WORKLOADS WITH REDUCED
      RESOURCES
---------------------------------------------------------- Letter :7.1

The need to effectively balance public service needs with costs will
become even more important in the future.  As the baby boom
generation ages, more and more people will be applying for and
receiving SSA program benefits.  In addition to increasing retirement
and disability caseloads, SSA's other workloads will grow because of
the following increasing responsibilities: 

  -- SSA's workloads over the next few years will increase
     substantially as a result of recent congressional efforts to
     overhaul the nation's welfare system.  The Congress has made
     changes that eliminate disability benefits for drug addicts and
     alcoholics, restrict noncitizens' SSI benefit eligibility, and
     tighten the SSI eligibility criteria for disabled children.  SSA
     will have to manage the large influx of appeals and
     reapplications that is expected following the changes in benefit
     eligibility.  SSA has already received appeals for more than
     half of the over 200,000 drug addicts and alcoholics who were
     notified in June 1996 that their benefits would be terminated,
     according to SSA officials.\20

These workloads will also have an impact on SSA's capacity to meet
other workload challenges. 

  -- SSA must meet a legislative requirement that most workers be
     mailed annual statements of their earnings and estimated
     retirement benefits,\21 called Personal Earnings and Benefit
     Estimate Statements.  The creation and mailing of these annual
     statements to all workers aged 60 and older, begun in 1995, must
     be expanded to those aged 25 and older--about 123 million
     individuals--by the year 2000.  We recently recommended that
     these statements be improved to more effectively communicate
     important information to the public; improving these statements
     could result in fewer inquiries about them, reducing the impact
     on SSA workloads.\22

  -- SSA has not fully met legislative requirements to periodically
     review the status of disabled beneficiaries to ensure that those
     who are no longer disabled are removed from the rolls.  About
     4.3 million DI and SSI beneficiaries were due or overdue for
     continuing disability reviews in fiscal year 1996.\23 SSA now
     has plans to review the status of more than 8 million
     beneficiaries in the next 7 years.  To accomplish this, SSA
     would have to conduct about twice as many reviews as it has
     conducted over the past 20 years combined. 

SSA knows that it must meet these increasing demands in an era of
federal downsizing and spending reductions.  In early 1996, SSA
estimated that it would need the equivalent of about 76,000
work-years to handle its workloads by the end of the century if it
conducted business as usual.  It expected to handle this work with
fewer work-years than it has today.  SSA is in the process of
revising these estimates. 


--------------------
\20 Legislation was enacted in March 1996 that eliminated drug and
alcohol abuse as a basis, or a material contributing factor, for
receiving disability benefits.  Individuals who received benefit
termination notices were given the option to reapply but could remain
eligible for SSI or DI on the basis of another disabling condition. 

\21 Under the legislation, SSA must provide individuals aged 50 and
over estimates of their potential monthly retirement benefits,
beginning no later than Oct.  1, 1999. 

\22 SSA Benefit Statements:  Well Received by the Public but
Difficult to Comprehend (GAO/HEHS-97-19, Dec.  5, 1996). 

\23 Social Security Disability:  Alternatives Would Boost
Cost-Effectiveness of Continuing Disability Reviews (GAO/HEHS-97-2,
Oct.  16, 1996). 


      TECHNOLOGY CRITICAL TO SSA'S
      FUTURE SUCCESS
---------------------------------------------------------- Letter :7.2

To handle increasing workloads and improve public service, SSA has
begun to redesign inefficient work processes and develop supporting
modernized information systems.  SSA is in the process of a
multiyear, multibillion dollar systems modernization effort expected
to support new ways of doing business and improve productivity. 
SSA's Automation Investment Fund of $1.1 billion supports its 5-year
plan, from fiscal years 1994 to 1998, of moving from reliance on
computer terminals linked to mainframe computers in its Baltimore
headquarters to a nationwide network of personal computers.  The new
network is expected to improve productivity and customer service in
field offices and teleservice centers and allow for further
technology enhancements. 

Although this new computer network environment may yield productivity
improvements, it poses significant challenges for SSA.  The
usefulness of new computer systems will depend on the software
developed for them.  Software development has been identified by many
experts as one of the most risky and costly aspects of systems
development.  To mitigate the risk of failing to deliver high-quality
software on time and within budget, SSA must have a disciplined and
consistent process for developing software.  SSA has already
experienced problems, however, in developing its first major software
application for use in its new network.  These problems include (1)
using programmers with insufficient experience, (2) using software
development tools that have not performed effectively, and (3)
developing initial schedules that were too optimistic.  We have
reported that these problems have collectively contributed to a delay
of over 2 years in implementing this new software.  Although SSA has
begun to take steps to better position itself to successfully develop
and maintain its software, it faces many challenges as it works to
develop software in its new computer network environment. 


      YEAR 2000:  CONVERTING
      SOFTWARE TOP PRIORITY TO
      AVOID BENEFITS DISRUPTION
---------------------------------------------------------- Letter :7.3

SSA faces another systems challenge--one of the highest
priority--that affects not only its new network but computer programs
that exist for both its mainframe and personal computers.  Most
computer software in use today is limited to two-digit date fields,
such as "97" for 1997.  Consequently, at the turn of the century,
computer software will be unable to distinguish between 1900 and 2000
because both would be designated "00." By the end of this century,
SSA must review all of its computer software--about 30 million lines
of computer code--and make the changes needed to ensure that its
systems can handle the first change to a new century since the
computer age began. 

This year 2000 software conversion must be completed to avoid major
service disruption, such as erroneous payments or failure to process
benefits, at the turn of the century.  Errors in SSA programs could
also cause difficulties in determining who is eligible for retirement
benefits.  For example, an individual born in 1920 could be seen as
being 20 years old--not 80--and therefore ineligible for benefits. 
Similarly, someone born in 1980 could be seen as 80 years old--not
20--and therefore entitled to receive Social Security benefits. 

Beginning work on this problem in 1989, SSA has reviewed and
corrected about 50 percent of the computer code that must be checked,
according to its Deputy Commissioner for Systems.  To complete the
job, SSA estimates that it will take about 350 work-years.  Agency
officials reported that the amount of resources dedicated to the year
2000 effort could impact staff availability for lower priority
projects and SSA's ability to tackle new systems development work. 


      DEVELOPING A TRAINED AND
      FLEXIBLE WORKFORCE IS
      ESSENTIAL
---------------------------------------------------------- Letter :7.4

SSA recognizes that to maximize the effectiveness of its reengineered
work processes and investments in technology, it must invest in
ongoing employee training and career development.  Ultimately, SSA
envisions a less specialized workforce with a broader range of
technical skills that can be flexibly used in areas of greatest need. 
In addition, SSA has taken steps to reduce its number of supervisors,
as part of the administration's efforts to eliminate unnecessary
bureaucracy by working with fewer supervisory layers.  To manage
these changes, SSA is training some of its headquarters employees in
the concepts and techniques of teamwork.  To manage with fewer
supervisors in its field operations, SSA also plans to work with its
unions to test a number of team concepts. 

Complicating SSA's efforts is its aging workforce:  51 percent of
SSA's senior executives and 35 percent of its mid-level managers are
eligible to retire over the next 5 years.  In the last 2 fiscal
years, SSA has lost two of its seven Deputy Commissioners to
retirement.\24 SSA has acknowledged the importance of having skilled
managers to prepare for the demands of heavier workloads, new
technology, and expected changes in its employee and client base. 
However, it has been nearly 5 years since SSA has conducted an
executive-level management development program.  SSA also has not
selected candidates for its mid-level management development program
since 1993.  The agency recognizes the need for management
development programs but has not yet scheduled future programs. 


--------------------
\24 SSA currently has seven Deputy Commissioners who oversee the
following functions:  operations; systems; finance, assessment, and
management; programs and policy; communications; human resources; and
legislation and congressional affairs. 


      DIFFICULT RESTRUCTURING
      DECISIONS LIE AHEAD
---------------------------------------------------------- Letter :7.5

Although SSA has begun to discuss its use of improved technology and
a more flexible workforce to conduct its business in new ways in the
future, it has maintained its traditional service delivery structure,
including 1,300 field offices.  Given the significant changes facing
SSA, it has not adequately considered whether its current service
delivery structure is really what is needed for the future. 

According to SSA officials, the agency has not developed specific
plans for restructuring its organization and redeploying staff in
response to demographic and workforce changes and shifting customer
expectations.  As noted earlier, the demand for SSA's 800-number
telephone service continues to grow, and SSA's surveys show that
callers prefer to use the telephone for more and more of their
business.  Customer feedback also indicates that customers would like
to complete their business in a single contact.  Over time, SSA will
likely need to restructure how it does business to cost-effectively
meet changing customer preferences; this may ultimately involve
office closures.  Issues of where, how, and by whom work will be done
entail sensitive human resources issues and may have negative impacts
on local communities; to resolve these, SSA will need to work closely
with its unions, employee groups, and the Congress. 

To improve its 800-number service, for example, SSA has many
initiatives under way, which we are reviewing.  SSA currently has 37
teleservice centers.  Studies indicate that this is far too many
teleservice centers to operate SSA's 800-number system in the most
cost-effective way.  A 1990 report from HHS' Inspector General, for
example, indicates that SSA could operate more efficiently and
cost-effectively with one-third the number of centers it currently
has.  SSA has studied this issue but has not developed specific plans
for reducing the number of teleservice centers. 


   OBSERVATIONS ON LEADERSHIP
   NEEDED TO MANAGE CHALLENGES
------------------------------------------------------------ Letter :8

As the 21st century approaches, SSA faces dramatic challenges: 
funding future retirement benefits, rethinking disability processes
and programs, combating fraud and abuse, and restructuring how work
is performed and services are delivered.  How SSA performs in these
areas can have a powerful effect on its success in fulfilling its
mission and on the public's confidence in this agency and the federal
government. 

To help SSA meet these challenges, the Congress took steps through
the independence legislation to build public confidence in and
strengthen the agency.  The independence legislation provides that
SSA's Commissioner be appointed by the President with the advice and
consent of the Senate for a fixed 6-year term, with removal from
office by the President only for a finding of neglect of duty or
malfeasance in office.  As the Congress was considering the
legislation, we testified that a fixed term of several years for the
Commissioner would help stabilize and strengthen SSA's leadership. 
We continue to support the need for a fixed term.  The legislation
also calls for a fixed 6-year term for a Deputy Commissioner, also to
be appointed by the President with the Senate's advice and consent. 

The Commissioner and Deputy Commissioner head the leadership team
needed to address the agency's existing problems and manage its
future challenges.  SSA's efforts to maintain an effective cadre of
leaders are complicated by the impending retirement of many of its
executives and managers and by the absence of a Commissioner and
Deputy Commissioner with the stability of fixed terms.  This
leadership must be in place for SSA to progress on the four fronts we
have highlighted. 

First, SSA must step up to its role as the nation's expert on Social
Security issues; it is uniquely positioned to inform the public
policy debate on the future financing and structure of Social
Security. 

Second, SSA must redesign the disability claims process and place
greater emphasis on return to work in its disability programs.  To
increase the redesign project's likelihood of success, SSA needs to
focus on those initiatives most crucial to producing significant
measurable reductions in claims-processing time and administrative
cost.  SSA also needs to place greater emphasis on return to work by
changing both the design and administration of the disability
programs. 

Third, SSA must better protect taxpayer dollars.  As the
administrator of the nation's largest cash welfare program, SSA must
ensure program integrity in SSI.  Reports of fraud and abuse trigger
public perceptions that SSA is not making cost-effective and
efficient use of taxpayer dollars. 

Finally, SSA must manage technology investments and its workforce and
make difficult decisions about handling increasing workloads with
reduced resources.  It must also continue to focus on and closely
manage its year 2000 conversion to help ensure that SSA will move
into the 21st century with systems that function correctly. 
Moreover, as SSA prepares to meet greater demands and changes in its
employee and client base, it may have to make difficult workforce
decisions to better respond to customer needs.  For example, SSA may
need to close offices and move its workers to different locations to
better meet growing demand.  In an environment of shrinking budgets
and increased expectations for government agency performance,
ensuring that agency decisions are based on comprehensive planning
and sound analyses will be even more essential. 

SSA's success in meeting these challenges is critical.  The agency is
all important, touching the lives of almost all Americans.  How it
meets its challenges as it moves into the next century can make a
significant difference in the well-being of America's vulnerable
populations--the aged, disabled, and poor--and in how the public
feels about its government. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

In commenting on a draft of this report, SSA discussed the
accomplishments of Commissioner Chater during her tenure and stated
that many challenges remain.  The agency also made technical comments
on our report, which we incorporated where appropriate.  See appendix
II for a copy of the agency's comment letter. 


---------------------------------------------------------- Letter :9.1

We are sending copies of this report to the Commissioner of the
Social Security Administration and other interested parties.  Copies
also will be available to others on request.  If you or your staff
have any questions concerning this report, please call me on (202)
512-7215 or Cynthia M.  Fagnoni, Assistant Director, at (202)
512-7202.  Other major contributors to this report include Gale C. 
Harris and Valerie A.  Rogers. 

Jane L.  Ross
Director, Income Security Issues


SSA'S GOALS AND PERFORMANCE
MEASURES, FISCAL YEAR 1997
=========================================================== Appendix I

                                                                             Fiscal year
Goal                 Performance measure                                     1997 target
-------------------  ------------------------------------------------------  ------------
Rebuild public confidence
-----------------------------------------------------------------------------------------
                     Percent of public "very well informed" or "fairly well  62 percent
                     informed" about Social Security

                     Number of personal earnings and benefit estimate        14,000,000
                     statements issued upon request and automatically


Provide world-class service
-----------------------------------------------------------------------------------------
Overall              Percent of people who rate SSA service as "courteous"   90 percent
                     or "very courteous"
                                                                             82 percent
                     Percent of people who rate SSA service as "good" or
                     "very good"

Enumeration          Percent of Social Security numbers issued within 5      97 percent
                     calendar days after receipt of needed information

Earnings             Percent of earnings items posted correctly              98.8 percent

OASI/SSI aged        Percent of OASI claims paid when due or within 15 days  83 percent
claims               from effective filing date

                     An OASI initial payment accuracy rate                   95.2
                                                                             percent
                     An SSI initial payment accuracy rate
                                                                             94 percent

OASI/SSI/DI claims   Percent of DI claims decided within 6 months after      55 percent
                     onset or within 60 days after the effective filing
                     date, whichever is later
                                                                             30 percent
                     Percent of SSI disability claims decided within 60
                     days of filing                                          2,415,000

                     Number of DI and SSI initial disability claims          97 percent
                     processed
                                                                             15 percent
                     Percent of Disability Determination Service decisional
                     accuracy                                                650,000

                     Percent of hearings decisions made and notices sent
                     within 120 days of filing

                     Number of hearings processed

Postentitlement      Percent of budgeted continuing disability reviews       100 percent
                     (CDR) processed to completion

                     Number of CDRs processed                                864,000

Face-to-face         Percent of people with an appointment who have waiting  84 percent
service              times of 10 minutes or less in a field office

                     Percent of people without an appointment who have       72.7 percent
                     waiting times of 30 minutes or less in a field office

800-number           Percent of callers who reach 800 number within 5        95 percent
telephone service    minutes
                                                                             97.2 percent
                     Percent of calls handled accurately

Mail                 Percent of people who find SSA mail "easy" or "very     75 percent
                     easy" to understand


Provide supportive environment for employees
-----------------------------------------------------------------------------------------
                     Percent of direct service employees with intelligent    Yet to be
                     workstations connected to a local area network          determined

                     Number of underrepresented equal opportunity groups     Six of six
                     that came closer to parity with civilian labor force
-----------------------------------------------------------------------------------------
Source:  Social Security Administration Business Plan:  Fiscal Years
1997-2001, SSA, Pub.  No.  01-008 (Apr.  1996). 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE SOCIAL SECURITY
ADMINISTRATION
=========================================================== Appendix I



(See figure in printed edition.)




RELATED GAO PRODUCTS
========================================================= Appendix III

SSA Disability Redesign:  Focus Needed on Initiatives Most Crucial to
Reducing Costs and Time (GAO/HEHS-97-20, Dec.  20, 1996). 

SSA Benefit Statements:  Well Received by the Public but Difficult to
Comprehend (GAO/HEHS-97-19, Dec.  5, 1996). 

Social Security Disability:  Alternatives Would Boost
Cost-Effectiveness of Continuing Disability Reviews (GAO/HEHS-97-2,
Oct.  16, 1996). 

Supplemental Security Income:  SSA Efforts Fall Short in Correcting
Erroneous Payments to Prisoners (GAO/HEHS-96-152, Aug.  30, 1996). 

Supplemental Security Income:  Administrative and Program Savings
Possible by Directly Accessing State Data (GAO/HEHS-96-163, Aug.  29,
1996). 

Social Security Administration:  Effective Leadership Needed to Meet
Daunting Challenges (GAO/T-OCG-96-7, July 25, 1996 and
GAO/HEHS-96-196, Sept.  12, 1996). 

SSA Disability:  Program Redesign Necessary to Encourage Return to
Work (GAO/HEHS-96-62, Apr.  24, 1996). 

PASS Program:  SSA Work Incentive for Disabled Beneficiaries Poorly
Managed (GAO/HEHS-96-51, Feb.  28, 1996). 

Deficit Reduction:  Opportunities to Address Long-Standing Government
Performance Issues (GAO/T-OCG-95-6, Sept.  13, 1995). 

Supplemental Security Income:  Disability Program Vulnerable to
Applicant Fraud When Middlemen Are Used (GAO/HEHS-95-116, Aug.  31,
1995). 

Social Security Administration:  Leadership Challenges Accompany
Transition to an Independent Agency (GAO/HEHS-95-59, Feb.  15, 1995). 

Social Security Administration:  Major Changes in SSA's Business
Processes Are Imperative (GAO/T-AIMD-94-106, Apr.  14, 1994). 


*** End of document. ***