A new audit recommends that SSA verify the beneficiaries’ status and take appropriate action to terminate benefits or remove erroneous death information from the electronic file created for anyone who's ever applied for a Social Security card.

(CNSNews.com) - The Social Security Administration is doing a better job of cutting off payments to dead beneficiaries, but the problem isn't solved.

According to a May 24 report from the Office of the Inspector General of the Social Security Administration, 678 beneficiaries who were verified as deceased as of April 2017 received approximately $20 million in improper payments for 9 to 206 months after their dates of death were recorded on the Numident. (Numident is an acronym for "Numerical Identification System," the Social Security Administration's computer database file on everyone who has applied for a Social Security number.)

The audit concluded that the Social Security Administration will issue another $6 million in improper payments over the next 12 months if the problem is not corrected.

Most of the improper payments stem from ineffective system controls, where death reports were recorded on the Numident but not on the beneficiaries' payment records.



(When death information appears on a beneficiary’s Numident record, but no corresponding death data appear on the beneficiary’s payment record, the system produces a Numident Death Alert, which SSA field office staff is supposed to investigate.)

The audit provides several examples, including:

--"A beneficiary died in June 2009." Three months later, in "September 2009, SSA recorded her date of death and death certificate number on the Numident. However, SSA did not record the death information on her payment record and therefore continued issuing monthly benefit payments. In June 2013, SSA systems issued a Numident Death Alert, but SSA did not determine the validity of the beneficiary’s continued payments." Auditors referred the case to its Office of Investigations, "which obtained a New York death certificate and opened a criminal investigation. SSA issued more than $148,000 in improper payments before it terminated the payments in June 2017."

--"A beneficiary died in September 2010. In November 2010, SSA verified and recorded the date of death on his Numident record," but not on the payment record -- the same situation as the previous example. "In June 2013, SSA systems issued a Numident Death Alert" but continued paying the beneficiary. The auditors "obtained the beneficiary's obituary notice and referred" the case for criminal investigation. "SSA issued more than $133,000 in improper payments before it terminated the payments in May 2017."

--In May 2013, SSA recorded the date of death and death certificate number on the Numident of a woman who died in the previous month. However, once again, "SSA did not record the death entry on her payment record." "In June 2013, SSA systems issued a Numident Death Alert, but SSA" did not look into the continued payments. "In May 2017, auditors "obtained the beneficiary’s obituary notice. "SSA issued over $73,000 in payments after this beneficiary’s death."

In addition to the 678 verifiably deceased people improperly receiving benefit payments, another 603 beneficiaries had a death date listed on their Numident, but the death certificate number was not listed, meaning these deaths were never verified.

"Prior audit work indicated many of the 603 individuals may have been alive, and death entries recorded on the Numident may have been erroneous," the audit said. "Action is required in these cases to terminate improper payments or remove the erroneous death entries from the Numident."

The latest report noted that the situation is improving:

"In a 2009 audit, we determined SSA issued approximately $40 million in improper payments to more than 6,000 beneficiaries although it had received notification they were deceased. In a 2013 audit, we determined SSA had issued about $31 million in improper payments to 2,475 beneficiaries although it had received notification they were deceased," the report said.

The audit recommended that SSA verify the beneficiaries’ status and take appropriate action to terminate benefits or remove erroneous death information from the Numident. It also said SSA should look into system enhancements to prevent these errors.

"In the interim, we recommended SSA periodically identify and review these instances to prevent improper payments."

Section 205(r) of the Social Security Act requires that the Social Security Administration (SSA) match states’ death records against SSA payment records to identify and prevent erroneous payments after death. In addition to receiving death information from the states, SSA receives and processes death reports from a variety of other sources, such as the beneficiaries' friends and relatives, funeral homes, financial institutions, and other government agencies.