News & Information

CCH® UNEMPLOYMENT INSURANCE — 05/23/17

GAO: Comprehensive strategic approach needed to enhance SSA's antifraud activities

The SSA's Disability Insurance (DI) and Supplemental Security Income (SSI) programs provide cash benefits to millions of Americans with disabilities who are unable to work. Collectively, payments from DI and SSI were about $200 billion in fiscal year 2015. Although the extent of fraud in these programs is unknown, recent high-profile cases have highlighted instances in which individuals fraudulently obtained millions of dollars in benefits. The Government Accountability Office (GAO) was asked to review the SSA's fraud risk management.

This report examines SSA's actions to manage fraud risks and the extent to which these actions align with leading practices for (1) establishing an organizational culture and structure conducive to fraud risk management; (2) identifying, assessing, and addressing fraud risks; and (3) monitoring and evaluating its antifraud activities. The GAO reviewed SSA documents, such as training materials and operational guidance; and interviewed SSA officials at the agency's headquarters, its three fraud examination units, and selected state disability determination offices chosen for their proximity to antifraud initiatives. The agency assessed those actions against leading practices identified in its Fraud Risk Framework.

What the GAO found

The SSA has taken steps to establish an organizational culture and structure conducive to fraud risk management in its disability programs, but its new antifraud office is still evolving. In recent years, the SSA has instituted mandatory antifraud training, established a centralized antifraud office to coordinate and oversee the agency's fraud risk management activities, and communicated the importance of antifraud efforts. These actions are generally consistent with the GAO's Fraud Risk Framework, a set of leading practices that can serve as a guide for program managers to use when developing antifraud efforts in a strategic way. However, the SSA's new antifraud office, the Office of Anti-Fraud Programs (OAFP), faced challenges establishing itself as the coordinating body for the agency's antifraud initiatives. For example, the OAFP has had multiple acting leaders, but the SSA recently appointed a permanent leader of OAFP to provide accountability for the agency's antifraud activities.

The SSA also has taken steps to identify and address fraud risks in its disability programs, but it has not yet comprehensively assessed these fraud risks or developed a strategic approach to help ensure its antifraud activities effectively mitigate those risks. Over the last year, the SSA gathered information about fraud risks, but these efforts generally have not been systematic and did not assess the likelihood, impact, or significance of all risks that were identified. In addition, the SSA has several prevention and detection activities in place to address known fraud risks in its disability programs such as fraud examination units, which review disability claims to help detect fraud perpetrated by third parties. However, the agency has not developed and documented an overall antifraud strategy that aligns its antifraud activities to its fraud risks. Leading practices call for federal program managers to conduct a fraud risk assessment and develop a strategy to address identified fraud risks. Without conducting a fraud risk assessment that aligns with leading practices and developing an antifraud strategy, the SSA's disability programs may remain vulnerable to new fraud schemes, and the SSA will not be able to effectively prioritize its antifraud activities.

Although the SSA monitors its antifraud activities through the OAFP and its National Anti-Fraud Committee (NAFC), which serves as an advisory board to the OAFP, the agency does not have effective performance metrics to evaluate the effect of such activities. The OAFP has responsibility for monitoring the SSA's antifraud activities and establishing performance and outcome-oriented goals for them. It collects metrics to inform reports about its antifraud initiatives, and the NAFC receives regular updates about antifraud initiatives. However, the quality of the metrics varies across initiatives and some initiatives do not have metrics. Of the 17 initiatives listed in the SSA's 2015 report on antifraud initiatives, 10 had metrics that did not focus on outcomes, and four did not have any metrics. For example, the agency lacks a metric to help monitor the effectiveness of its fraud examination units. Leading practices in fraud risk management call for managers to monitor and evaluate antifraud initiatives with a focus on measuring outcomes. Without outcome-oriented performance metrics, the SSA may not be able to evaluate its antifraud activities, review progress, and determine whether changes are necessary.

What the GAO recommends

The GAO recommends that the SSA (1) conduct a comprehensive fraud risk assessment for its disability programs, (2) develop a corresponding antifraud strategy, (3) develop outcome-oriented metrics for antifraud activities, and (4) review progress and change activities as necessary. The SSA agreed with the GAO's recommendations.

For more information, contact Seto Bagdoyan at (202) 512-6722 or bagdoyans@gao.gov, or Cindy Brown Barnes at (202) 512-7215 or brownbarnesc@gao.gov (#GAO-17-228, April 2017).