[Editor's note: This is the third of three installments examining the need for legal counsel and improved legislation for those needing help with disabilities–and against those who game the system. Part One is here; Part Two is here.]

The Government Accountability Office (GAO) released a disturbing report in late June that contends the Social Security Administration (SSA) may have made fraudulent or improper disability payments to thousands of individuals, including more than a thousand federal employees.

As reported Aug.4 in The Washington Post, the SSA disputes the audit:

“Almost 1,500 federal workers might have received improper or fraudulent Social Security payments in the past several years, according to a government audit disputed by the Social Security Administration.

Payroll records vs. benefits data link nearly 70,000 others

“Government Accountability Office investigators matched civilian federal payroll records with benefit data from the Social Security Disability Insurance program and the Supplemental Security Income program to yield their estimates.”

Beyond the 1,500 federal employees, the GAO audit (see the summary here) finds questions about “62,000 individuals [who] received or had renewed commercial driver’s licenses after SSA determined that the individuals met the federal requirements for full disability benefits” and another “7,900 individuals with registered transportation businesses who were receiving SSA disability benefits.”

A tiny fraction?

WP columnist Joe Davidson, writing a day later, at first tries to downplay the significance of the numbers, saying that 1,500 of the millions of federal employees represents a tiny fraction. That’s not “many out of a current federal workforce of 2 million” Davidson writes. “And even that comparison overstates the problem.

“Sen. Carl Levin (D-Mich.), chairman of the investigations panel under the Homeland Security and Governmental Affairs Committee, put the numbers in a more precise context.

” ‘GAO matched a database of Social Security disability recipients against federal payroll databases covering about 4.5 million persons who worked for government agencies for varying periods of time from October 2006 to December 2008,’ he said as he opened the hearing.

“Fifteen hundred out of 4.5 million ‘represents a very small percentage,’ he accurately noted, ‘only three-hundredths of 1 percent.’ ”

“If only all rates of fraud or improper activities were so low.”

Larger questions for endangered SSDI program

We catch his drift, but can’t co-sign for such a forgiving attitude. In the first place, it overlooks the nearly 70,000 other folks who may have received improper payments. More important, such forbearance downplays the threat to a disability program that is running out of funding.

Davidson does recover a sense of accountability, though, when he says, “Yet any improper activity is too much, particularly by federal workers who are trusted to safeguard tax dollars, not abuse them. And every penny of the $1.7 million that the GAO found in improper monthly payments to federal workers is too much.”

Let’s see– $1.7 million x 26 months … on my calculator, that comes to $44.2 million in possible overpayments. And, remember, that’s only for the 1,500 federal folks, for the period Oct. ’06 to Dec. ’08.

It gets worse. According to the WP article, nearly $11 billion is stake for a longer period:

“The SSA made $10.7 billion in overpayments to disability beneficiaries from 2004 to 2008, according to Senate aides. [Senator Tom Coburn (R-Okla.)] is especially concerned and familiar with fraudulent payments from his time as a practicing medical doctor and as part of his service on President Obama’s bipartisan debt commission, aides said. The Oklahoma Republican also is a fierce critic of the salaries and benefits earned by federal workers and other spending for government operations.”

Coburn and Senators Thomas R. Carper (D-Del.) and John McCain (R-Ariz.) requested the GAO audit, which was featured at the Aug. 4 subcommittee hearing,  “Social Security Disability Fraud: Case Studies in Federal Employees and Commercial Drivers Licenses.”

Another $3 billion

Other incidents of overpayment have been found, too. For example, this is not the GAO’s first probe of the SSDI or SSI systems. According to the printed version of Coburn’s opening statement for the hearing, a previous GAO investigation found “nearly $3 billion in overpayments from 1999 to 2003 in the DI program alone.”

Regardless the fractional amount overall, this is simply too much money to be wasted, period–and especially for a program in such dire straits, as we wrote here: “The Social Security Disability Insurance (SSDI) fund, however, is in trouble. And fixing it requires way more than Band-Aid legislation in the next few years. In short, the fund is financed mostly by a 1.8 per cent payroll tax and at current rates will be in serious trouble in only five years. And by 2018, a short three years later, it will be broke, according to a recent study by the Congressional Budget Office (CBO), which makes a brief available here.”

Here’s an excerpt from Coburn’s statement:

“We cannot afford to allow healthy people to waste our money. Nor can the Disability Insurance Trust Fund afford it. The Congressional Budget Office recently concluded that the Trust Fund will be exhausted by 2018.

“GAO’s investigation into fraud in the Social Security disability programs is not its first. In 1997, they designated the SSI program as “high risk” due to years of mismanagement and overpayments. GAO also previously identified nearly $3 billion in overpayments from 1999 to 2003 in the DI program alone. In today’s report, GAO found $10.7 billion more in overpayments from fiscal years 2004 to 2008.

“In response to these numbers, SSA’s disappointing reply was that ‘overpayments are unavoidable.’ This is unacceptable. It is also in direct contradiction with the President’s mandate that overpayments in government programs be eliminated.”

SSA Commissioner objects

SSA Commissioner Michael J. Astrue vigorously disagreed with the GAO report, quoted in the WP piece, calling the report ” ‘fatally and hopelessly flawed,’ and said auditors improperly compared payroll data with SSA data.”

In his printed statement for the hearing, Astrue said:

“Of the 20 cases that GAO reviewed, GAO investigated only one problematic CDL case and only one problematic case involving a commercial vehicle company. GAO did not conclusively prove fraud in any of these 20 cases and has referred only 5 of these cases to our Office of the Inspector General (OIG).

“We do not intend to minimize the importance of the issues raised in this investigation, and we take our stewardship responsibilities very seriously. Nevertheless, the results apply to only these 20 non-representative cases, and after reviewing these 20 cases, we found that we had already detected overpayments for half and believe that we would have identified the remaining cases through subsequent enforcement activities if earnings were reported on the W-2 or as self-employment income to the IRS.”

Gregory Kutz, managing director of GAO’s Forensic Audits and Special Investigation division acknowledges the preliminary nature of the findings. From the main report itself:

“Thousands of federal employees, commercial drivers, and owners of commercial vehicle companies received Social Security disability benefits during fiscal year 2008, though we could not determine the extent to which beneficiaries improperly or fraudulently received payments. Because further investigation is required to determine whether these individuals are entitled to receive payments, our analysis provides only an indicator of potentially improper or fraudulent activity.”

Curiously, one of the disputed cases was for an employee who works for the SSA, and SSA officials had no idea until informed by the GAO. According to the WP story, “And in an ironic twist, a Social Security Administration worker from Arizona received $11,000 in overpayments after she was hired by the agency in 2007/ The SSA did not have information about her disability in her files, the GAO said.”

Stay tuned–these questions aren’t going away anytime soon.

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