- The Washington Times - Wednesday, April 30, 2008

The Social Security Administration is paying out more than $100 million a year to people getting benefits overseas despite rules that say recipients cannot live outside of the United States, a new government audit has found.

The report by the SSA’s Office of Inspector General says the agency relies on people to “self-report” absences from the United States, but estimated that as many as 40,000 recipients in foreign countries were overpaid more than $225 million from 2005 to 2007.

“Despite SSA’s efforts to identify residency violations, we estimate a substantial number of violations have not been detected, resulting in millions of dollars in overpayments,” Inspector General Patrick O’Carroll Jr. concluded.

The yearlong SSA investigation examined a random sample of 250, out of more than 1 million foreign-born U.S. residents getting Social Security payments through direct deposit from March 2005 to February 2007.

According to the report, 10 were overpaid tens of thousands of dollars because of undetected absences from the U.S. When the findings are spread across the entire 1 million sample of foreign-born U.S. citizens, the losses to the SSA total an estimated $100.5 million per year, according to the audit.

John Johnston, an SSA spokesman, declined yesterday to comment on the audit. But he referred to a written response to the audit sent to the inspector general by SSA chief of staff David V. Foster. In his letter, Mr. Foster said identifying recipients ineligible owing to residency violations is “a difficult but necessary task in the effective stewardship of our program.”

The problem isn’t a new one.

In 2003, the General Accounting Office, since renamed the Government Accountability Office (GAO), estimated that SSA paid out $118 million between 1997 and 2001 to recipients who were violating residency rules.

The GAO concluded that the SSA “relies heavily on self-reported information from recipients to determine domestic residency, often without independently verifying such information.”

Mr. O’Carroll’s office issued a similar finding in his report, which was finalized last week: “The agency relies considerably on individuals self-reporting their absences from the United States. However, because reporting such events may result in ineligibility, there is not incentive for recipients to report them to SSA.”

Mr. Foster said the SSA plans to complete an analysis by June on whether it can launch an automated system to track down SSA payments to recipients in foreign countries.

The audit by Mr. O’Carroll’s office noted that the SSA has taken “proactive steps” to detect residency violations, including agreements with state Medicaid investigators to conduct home visits for Social Security recipients and reviewing SSA checks to see if they were endorsed by foreign banks.

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