Appendix 5 - Management Challenges

In order to meet the performance goals established for FY 2001, SSA must address and strive to resolve the management challenges identified both externally and internally. The management challenges listed below are those identified by the General Accounting Office and SSA's Inspector General as the most serious management challenges facing our Agency. In all cases, SSA has formulated specific action plans to address these challenges and plans to make significant progress toward meeting them. In addition, we have adopted specific and measurable performance targets that demonstrate our commitment to resolving these problems. For some problems, numeric outcome or output goals will be used. For others, measurable milestones of initiatives that are tracked at executive level to ensure success are appropriate and will be used.

1. Strengthening SSI Program Management

In October 1998, SSA issued a comprehensive plan for improving management of the SSI program, "Management of the Supplemental Security Income Program: Today and in the Future". The plan addresses four areas in which the SSI program can be better managed: improving overall payment accuracy, increasing continuing disability reviews (CDRs), expanding our efforts to combat program fraud, and improving debt collections. In each area, we set aggressive but achievable goals, assuming receipt of adequate resources, to improve our management of the program.

We have always been committed to administering the SSI program as efficiently and accurately as possible. However, we believe we can improve our administration of the SSI program in ways that will further increase accuracy and reduce erroneous payments. Our goal is to increase the accuracy rate to 96 percent by FY 2002 through the following management improvements and legislative provisions:

• Electronic Information Exchange--We have expanded electronic information exchanges significantly over the years. These matches have proven very successful. By FY 2002, we estimate that they will prevent about $230 million in overpayments each year.

• Processing CDRs--SSA is committed to ensuring that only those individuals who meet program eligibility requirements come on to the rolls and that only those who continue to be disabled remain on the rolls. Our plan calls for processing CDRs to ensure program integrity, to rebuild public confidence in our programs, and to carry out congressional mandates. We expect to complete 1.8 million periodic review CDRs in FY 2000, and 1.7 million in FY 2001 as called for by our 7-year plan. Over the course of our 7-year plan, on average, we expect to realize lifetime program savings of about $6 for every $1 in administrative cost.

• Processing Additional Non-Disability Redeterminations -- Redeterminations are periodic reviews of SSI beneficiaries' non-medical eligibility that focus on income and resource factors affecting eligibility and payment amounts. These reviews are the most effective tools available to SSA for improving the accuracy of SSI payments. Our FY 2001 budget request includes resources to enable SSA to continue to conduct a significant number of redeterminations over 2 million per year in FYs 2000 and FY 2001. These redeterminations could result in an estimated annual reduction in overpayments of $260 million (as measured by the SSI quality assurance review system) by FY 2002.

• Legislation--On December 14, 1999, the President signed into law the Foster Care Independence Act of 1999, Public Law 106-169. The law includes provisions which give SSA valuable tools to further our efforts. Three of the provisions will improve SSA's ability to gather information that is material to an individual's eligibility or correct amount of assistance. The improvements will enable us to identify unreported changes earlier to prevent or reduce overpayments.

  Another provision allows SSA to improve efforts to collect SSI overpayments by extending to the SSI program all the debt collection authorities currently available under the OASDI programs.

  Two other provisions strengthen program policies that, prior to enactment, allowed individuals to qualify for benefits by disposing of resources for less than fair market value, and by transferring assets to a trust.

  Another provision authorizes SSA to impose sanctions on individuals who furnish information material to eligibility or payment amount that the individual knew was inaccurate, providing a deterrent to those who mislead SSA in their attempt to claim benefits.

The FY 2001 APP contains measures for each of the five strategic objectives addressed in the SSI management plan, and describes the specific means and strategies that are being employed. We also include a separate section in the plan that displays in one place all the performance goals related to SSI program management (pp. 90-91).

2. Long-term Challenges of the Social Security Program

We participate in thousands of activities across the country aimed at informing the public about the Social Security program and the need for the public to understand the Social Security program of today to help shape the Social Security program of tomorrow.

In addition, we have briefed Members of Congress about the long-term challenges and have been providing technical assistance to congressional staff in connection with development of legislative proposals to enhance the program.

Since its establishment in 1998, our new Office of Policy has been preparing analyses of long-term proposals to support our efforts to keep Social Security on a firm financial footing for decades to come.

The APP acknowledges our key role in participating in the development of proposals to strengthen and enhance the solvency of OASDI programs and commits SSA, in FY 2001, to continue to prepare analyses on the distributional and fiscal effects of solvency proposals developed by the Administration, Congress, and other policymakers (pp. 26-28).

3. Systems Security and Controls

Last year the public accounting firm of PricewaterhouseCoopers (PWC) reported that SSA had made "noteworthy" progress in strengthening controls to protect information and in improving and fully testing our plan for continuity of operations. They also reported that SSA had improved significantly in the area of software development and change control procedures to the extent that this area was no longer a reportable condition. SSA intends to continue treating systems security as a high priority.

While SSA has a strong program to combat fraud, waste and abuse, there is potential for deliberate acts of deception in any benefits program. The FY 2001 APP contains a specific performance objective to aggressively deter, identify and resolve fraud, with numeric performance goals for FY 2001. Among the supporting means and strategies discussed is a comprehensive anti-fraud plan jointly developed and overseen by SSA and the OIG. The anti-fraud plan includes activities to prevent and detect fraud, such as revising the integrity review process to better identify fraud prone situations and better focus security audits, and increasing systems controls for certain automated transactions sensitive to fraud (pp. 67-70, Appendix 3, pp. 4-5).

4. Fraud Risk

Because the public rightfully expects us to be vigilant stewards of its tax dollars, SSA has a policy of zero tolerance toward fraud and abuse in our programs. In a broad sense, virtually all Agency efforts encompassed by SSA's program management goal constitute elements of SSA's strategy to combat fraud. The effort associated with this goal encompass approximately $1.7 billion of SSA's FY 2001 administrative budget. They include the Inspector General's budget, continuing disability reviews, SSI non-disability redeterminations, representative payee costs, annual earnings postings and records maintenance, and debt collection efforts. A strong OIG, working together with SSA employees, is the most effective means we have to control fraud and abuse in the programs we administer.

To strengthen the OIG's capacity to accomplish its mission, SSA has continued to increase the resources available to the OIG, more than doubling its investigative staff.

Our FY 2001 budget supports increased attention by both the OIG and Social Security offices across the country for deterring fraudulent activities and identifying and bringing to justice those who commit fraud, whether members of the public or employees. SSA's targeted anti-fraud activities include:

• Enhancing on-line access to State records;

• Continuing residency verifications for SSI applicants and recipients in our border offices;

• Establishing additional State Disability Determination Service (DDS) fraud investigation units to detect and prevent fraud at the initial disability decision;

• Improving systems security measures;

• Improving operations to identify and terminate payment to incarcerated SSI recipients; and

• Implementing new automated data matches with external parties.

SSA has also made an extensive effort to combat identity fraud, including establishing an Enumeration Verification System which provides a mechanism for employers to match employee names and Social Security Numbers (SSNs) with SSA's records; establishing a Disallowed Application File to track applications for SSN cards submitted with "suspect" or "fraudulent" documentation, and working closely, as permitted by law, with the Immigration and Naturalization Service and the State Department to assure the identity and lawful alien status of individuals.

OIG has dedicated additional resources to combat identity theft; staff are currently participating in identity theft task forces and OIG pilots are under way in two cities to assess the impact of identity fraud and to develop an appropriate response.

We specifically discuss our actions to address SSI fraud/high risk under item 1 above.

5. Addressing Urgent Year 2000 Computing Challenge

SSA has been at the forefront of government-wide efforts to ensure that our systems are Year-2000 compliant. Our benefit payment system is 100 percent Year-2000 compliant. SSA worked closely with the Treasury Department, Federal Reserve, and the Postal Service to ensure that the Social Security and SSI benefit payments due in January 2000 were paid on time. Since October 1998, our payments have been made with Year-2000 compliant systems at both SSA and Treasury.

In the event that some banks were not able to credit direct deposit payments, SSA worked with FMS and the Federal Reserve to develop a Benefit Payment Contingency Plan, which provided alternate ways of getting payments to Social Security beneficiaries. In dire need situations, SSA field offices were able to issue third-party payments immediately.

All of SSA's mission-critical systems are Year-2000 compliant. The automated systems for 50 State Disability Determination Services (DDSs) are Year-2000 compliant. In addition, all of our data exchanges with all our trading partners are Year-2000 compliant.

All our local contingency plans assured that January 2000 payments would be issued on time, that our systems would function smoothly, and that we would deliver all our services to the American public.

As a final risk mitigation strategy, SSA published its Y2K Day One Strategy. This strategy comprised the comprehensive set of actions that were to be executed during the last days of 1999 and the first days of 2000. It included the activities leading up to the critical century rollover date, such as identification of key personnel involved, preparation of facilities checklists, procedures for manual processing of certain key workloads in the event the automated systems would be unavailable, training, etc. Implementation of the strategy ensured, to the extent possible, that SSA's facilities and systems were fully operational on the first business day of the new century. That is, service to the public and our trading partners continued without interruption due to the change of century date.

6. Program Complexity

SSA has grappled with the complexity of the SSI program since it was first implemented and has made numerous efforts to simplify it. Legislative, regulatory and judicial actions designed to improve the program's ability to provide benefits in an equitable and cost-effective manner have increased program complexity. Congress, the General Accounting Office, the Social Security Advisory Board and others, as well as the Agency, acknowledge program complexity as an important challenge to administering the program effectively. The Office of Policy serves as a focal point for research, evaluation and policy development that will help enable policy makers to make informed choices in this area.

Our FY 2001 APP contains goals to maintain or improve payment accuracy in both the SSI and OASDI programs and to analyze complex SSI policies to determine opportunities for improvement. The Agency is also working to strengthen SSA employees' understanding of SSI program rules (pp. 71-72), Appendix 3, pp. 52, 57).

7. GPRA Commitments

SSA is committed both to the concepts of GPRA and to improving our ability to manage for results in improved customer service, as well as strengthening the integrity of our programs. Our FY 2001 APP is a useful management tool for SSA and is a primary means of communicating overall direction and specific agency performance targets to our employees. Our current FY 2001 commitments reflect what we believe can be accomplished at the resource levels appropriated in FY 2000 and contained in our budget request for FY 2001.

The FY 2001 APP contains a specific performance objective to position the Agency's resources and processes to meet emerging workloads. This section highlights SSA's current activity to create a service delivery vision that looks past our current 5-year planning horizon. This vision will be used to determine the actions we need to pursue to adequately prepare for the future. Our next GPRA strategic plan will outline the objectives, measures, and initiatives we will manage to through FY 2005 to manage effectively in this critical area. The APP also commits us to updating an SSA workforce transition plan in FY 2001, which will support our ability to serve our customers into the future (pp. 73, 83-84).

In addition to including a detailed definition of each of the plan's performance measures and the data source used to measure performance, the plan includes a separate section detailing how performance measurement is being verified, validated, and reported (pp. 88-89).

8. Employee Performance and Productivity

SSA recognizes that a highly skilled and high-performing workforce is the key to achieving our strategic goals and objectives and that ultimately, the measure of our employees' performance is expressed in the performance of the Agency. Our FY 2001 APP goals related to employees and our enabling means and strategies, therefore, focus on providing our employees with the tools and training, physical environment, and culture that support their contribution to achieving SSA's mission, and on developing and implementing plans to position our resources to meet emerging workloads (pp. 75-84).

9. Process Redesign

The FY 2001 APP reflects our current strategy to improve the disability adjudication process by creating a decisionmaking process that reduces fragmentation and duplication, produces greater consistency and coordination at all adjudicative levels and takes better advantage of new technology. By taking these steps, SSA is striving to ensure that the correct disability decision is made and that benefits are awarded as early in the process as possible. Specific initiatives such as modifications to the disability claims process, process unification, and hearings process improvements are described, and a schedule for specific milestones through the next two years is provided.

We commit to specific levels of disability and hearings payment accuracy and processing time through FY 2001. We introduce a productivity measure for the hearings process and two new DDS accuracy measures. We discuss our intention to improve other performance through FY 2005, including DDS denial accuracy, and productivity which will enable DDSs to handle increased receipts (pp.50-55, Appendix 3, pp. 31-32).

10. Annual Wage Reporting

SSA has made many improvements in the earnings process over the years that have contributed to improvements in accurate and timely posting of wages to individuals' records. A remaining problem is the volume of wages posted to the Earnings Suspense File because SSA is unable to match the report to a valid name/social security number. The FY 2001 APP describes SSA's ongoing initiative to reduce the size of SSA's suspense file, which is key to our efforts to maintain and improve earnings accuracy and, as a result, OASI payment accuracy. The APP also commits the Agency to achieving specific, numeric goals for earnings accuracy and OASI payment accuracy in FY 2001 (pp. 58-59, 66, Appendix 3, p. 10).

11. Service to the Public

In spite of the current and future challenges, SSA is committed to delivering world-class, customer-responsive service, not only in terms of timeliness and quality of the outputs we produce, but also as measured by the satisfaction of our customers. Throughout the FY 2001 APP, we commit ourselves to specific levels of accuracy and timeliness in processing our workloads, and to specific enhancements in the range of services provided.

Our FY 2001 APP includes initiatives to improve efficiencies through efforts such as electronic payment services, automating SSA's claims processes, improved telephone service, and expanded electronic service delivery. We are also committed to creating a supportive work environment for employees by providing the necessary tools and training, providing a physical environment that promotes the health and well-being of our employees, and creating, updating, and implementing a plan for transitioning from the workforce of today to the workforce of the future.

We also commit to continuing to solicit input from our customers about their preferences and about where improvement in service is needed. As is evident in the plan, we are using this information to develop and implement specific initiatives to improve our customer service and are putting processes in place which will enhance our ability to continue to be customer-responsive (pp. 45-46, Appendix 3, pp. 41-55).

We are committed to supporting the efforts of Social Security beneficiaries with disabilities to return to work or work for the first time. For several years, SSA has embarked on a comprehensive employment strategy that seeks to provide beneficiaries with the economic supports to enter the workforce, greater access to rehabilitation and other employment services and the flexibility to choose service providers, and improved customer service. In FY 2000, SSA will begin implementation of Public Law 106-170, "The Ticket to Work and Work Incentives Improvement Act of 1999." This legislation addresses some of the most significant barriers to employment of people with disabilities and is expected to increase the number of beneficiaries who successfully transition to work (pp. 32-34, Appendix 3, pp. 17-19).