SSA OIG employees turn limited budget into 20-to-1 return on investment

Wednesday - 8/13/2014, 4:26am EDT

Sean McCalley reports.

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By Sean McCalley
Federal News Radio

Some of New York's finest are behind bars for their involvement in a criminal ring to defraud the Social Security Administration. A group of 106 people, many of them New York City firefighters and police officers, pocketed $23.2 million in fraudulent disability claims from the SSA.

Four of them created a legitimate-looking paper trail to try to dupe the agency, including two doctors, an attorney and a disability consultant. Despite their efforts, federal law enforcement rounded up the entire group.

The people responsible for catching these types of criminals — and recovering all the money they steal from SSA — are employees of the agency's Office of Inspector General. But investigations involving high-profile crime rings and fraud schemes are just part of how the OIG patches the leaks in SSA's financial systems.

In part two of Federal News Radio's special report, Rainmakers and Money Savers, we take an inside look at how much money is brought into the federal coffers due to the work of a specific group of federal employees.

Three-pronged approach

Patrick O'Carroll, SSA's Inspector General, said the goal for his employees (about 550 serving across the country) is an 8-to-1 return on investment for all the money Congress appropriates his office every year. The average return currently sits at about 20-to-1 — roughly three times more than the goal.

"We're overseeing an agency that's paying well over $1 billion a day to the American public," O'Carroll said. "Because of that, every dollar that we can save is usually going to be [in] large numbers."

To illustrate that sense of scale, consider this: For all of fiscal 2013, SSA paid more than $850 billion in benefits. That money was split between more than 62 million beneficiaries every month. Just by themselves, SSA's disability programs awarded 15 million people about $175 billion in benefits last year.

O'Carroll said a strong ROI is dependent on three areas the OIG specializes in: Investigations, audits and lawsuits. Certain specialties bring in more money than others, but all three play an important role in the mission of safeguarding — and refilling — SSA's trust fund.

Auditing power

SSA OIG auditors look for strange patterns in the agency's financial data to find waste, fraud and abuse. From a strictly financial sense, audits are the agency's most valuable tool.

During the six months between October 2013 and March 2014, SSA OIG issued 33 audits. From those 33 audits, the IG found $521 million in questionable costs made by the Social Security Administration. The IG also redirected $6 million in waste and duplication to needy programs at SSA, according to its latest semi-annual report to Congress.

But before the auditing team starts investigating SSA's financial system, it has to dream up new ways to detect waste, fraud and abuse.

"We do a lot of brainstorming," said Judy Oliveira, director of the OIG's Boston Audit Division. "One audit idea will lead to something else."

For example, Oliveira said an SSA employee tipped her off to people using multiple Social Security numbers (SSNs) to claim multiple benefits. She scanned the agency's data to see if it issued any benefit checks to multiple, random SSNs listed under a single address.

"But what if the person was a little smarter and had a different mailing address?" Oliveira said. Taking the original tip and turning it into a larger investigation, Oliveira's auditing team found about 200 people using multiple SSNs. The agency overpaid them by $3 million.

Audits bring back the most money because they have a cumulative effect on SSA's financial systems. O'Carroll said the combination of a retrospective approach (fixing existing problems) and a prospective approach (recommending ways to prevent problems) build upon each other and have huge effects on SSA's financial bottom line.

Investigative units

SSA OIG has 10 field divisions responsible for monitoring the agency's work in about 60 different cities. The fraud ring uncovered in New York was under the legal jurisdiction of its New York field office, which is responsible for the New York region and the commonwealth of Puerto Rico.

Ed Ryan is the special agent in charge of the New York Field Division. He and his fellow agents serve as the "boots on the ground" for the OIG during criminal investigations. Ryan said the field divisions have to decide whether cost of planning, labor, and legal expenses will be worth an investigation.