said we can't help you today. and i said, why not? and she said, because information we have reports you as deceased. and i demanded to know who was reporting the information. and also where it was coming from, into supposedly what date i died. they absolutely refused to tell me anything. by law and under fcra i thought i was entitled to that information. however, the bank refused to give it to me, and later when i found out check systems was the one that supplied that information. they still refused to provide me with anything. so april of 2010 is when i actually found out i was in the file. >> is that when you went to the social security administration? >> again issue had already been. >> several times. >> yes sir. >> and they told you repeatedly you're okay. >> each time. >> but it was clear you were not okay as every time you turned out you were being given

inaccurate information, even though you were going into the office. >> correct. >> thank you. >> miss rivers, thank you for your testimony. i think every member of this committee offers an apology and certainly our commitment we'll work with the people in the agencies to try and create law create legislation that will prevent this from happening to another american. so, thank you again for your testimony. you're dismissed. thank you. our next witness will be sean bruin. he joins us today from the social security administration where he serves as a senior adviser for audit in the office of budget finance quality. mr. bruin. >> thank you chairman johnson, members of the committee. thank you for inviting me to discuss steps to strengthen the integrity of federal payments. i am senior advicer to the deputy commissioner for budget finance quality and management at the social security

administration. my remarks will focus on our collection of death information-its accuracy, and how we share it with other agencies. we collect death information to timely stop paying social security beneficiaries who have died and to begin paying benefits to survivors. each year we post about 2.8 million death reports, primarily from family members, funeral homes and states. this information serves us well preventing around $50 million in improper payments each month. over the years we have significantly improved our death information collection process, and this information is highly accurate. of the millions of reports we receive annually, less than one half of one percent are subsequently corrected. still, we continually strive to improve the accuracy of our records. since 2002 we have worked with states to increase the use of electronic death registration. or edr.

edr automatic mates the death reporting process by enabling states to verify the name and social security number of a deceased individual against our records before they issue a death certificate or transmit a report of death to us. thus death information reported to through edr is the most accurate possible. currently, 37 states the city of new york, and the district of columbia, provide death reports to us through edr. war also currently carrying out a major multi year redesign of the death information system to make it more efficient and reliable. accurate information is important not only for the administration of our programs but because we share the information with other agencies and with the public. as a result of a lawsuit brought against us under the freedom of information act we must share death information we collect and maintain from nonstate sources. we do so by distributing information through the

department of commerce. in sharing this public file subscribers are informed and have been informed for many years, that ssa does not have a death record for all persons that we cannot guarantee the voracity of the file and that the absence of a particular person is not proof that person is alive. the department of commerce is authorized to share nonstate death information on an immediate basis with entities that have a legitimate business purpose or a fraud prevention interest for such information. however, under the bipartisan budget act of 2013 the public may only access nonstate death information that is at least three years old. congress put this restriction into place to ensure that fraudsters could not use a decease person's personally identifiable information to seek fraudulent tax refund. we're limited in our ability to

share step information specifically under the social security act we may share state death information with agencies administering federally funded benefits. thus we share all of our death information, including state records, with the center ford medicare and medicaid services the department of defense, and the internal revenue service, among others. treasuries do not pay portal is an important part of the administration residents efforts to fight improper payments and allow federal agencies to carry out a review of available databases with relevant information on eligible. however, under current law, we can provide state department information to the department of treasury for purposes of do not pay. to remedy this the fiscal year 2016 presidents budget includes a legislative proposal that would that are us to -- authorize us to share all death information we maintain with do not pay.

we note that s614 introduced by rank ranking member carper co-sportily chairman johnson, also aims to address the gap well would be happy to provide technical assistance to the committee on its bill. we also ask congress to sport the department of health and human services request for fund to increase participation in edr. because death reports collected through edr are highly accurate we believe that universal adoption of edr would be the single most effective step in ensuring our death records are of the highest quality. additionally, i would hope that you will support the robust package of program integrity related legislative proposals, proposals that will help detect prevent and recover improper payments, including in the president's fiscal year 2016 budget proposal. finally, would like to recognize the work of our office of inspector general, most recently

an audit in which they looked at death information in decades old records. we're pleased they found no fraud in either the social security program or nye federal program. we have agreed with 28 of the 31 recommendations that the oig has made in this area over the past few years, us a explain any written statement these recommendations have led to an enhancements in our systems. thank you for the opportunity to appear before you today to discuss this very important issue. i would be happy to answer any questions you may have. >> thank you mr. brune. our next witness is patrick o'carol, jr., inspector general for the social security administration since 2004. mr. o'carroll has 26 yours of service for the united states secret service. mr. peril. >> good afternoon, chairman johnson, ranking member carper and members of the committee. thank you for the opportunity to par tis mitt inning this discussion. my office investigates hundreds of social security misuse every

year but recently one incident out from the rest. a man opened two bank accounts with social security numbers that belongs to people northern 1886 and 199 -- 1893. we can safely assume these people who today would be 129 and 122 years of age, are deceased. however, according to ssas databases of social security number holders these people are alive ssa does not have dates of person for eperson or holder records. our audit fors found out these two record were anything but unique. re reported 6.5 million people whose social security records indicate they are over 112 years old do not have a date of death on the social security number record. without a date of death on the database these people do not appear on the agency's death master file. i should note that none of these

aged number holders are improperly receiving social security benefits and overpayments are not occurring. but these inaccuracies create a significant void in death data available to the public. re recommend that ssa update the records and update the discrepancies. the odd disis relevant to the discussion on improper payments because benefit paying aeg agencies like hhs and irs and other public and private entities use the death master file to verify deaths and ensure payment accuracy. additionally, as the committee node, the improper payment and elimination and recovery and improvement act of 2012 included a do not pay provision which requires federal agencies to review lists of deceased or ineligible individuals before making payments. the death master file is one of those lists. to identify and prevent its open and other agencies improper payments ssa -- must obtain and

maintain accurate records. there are less than one thousand indicates each in month in which a living individual is mistakenly included on the death master file. ssa said it moves quickly to correct the situation when errors occur. this agency reports it is not found conclusive evidence of past data misuse. however, we remain concerned because these errors can lead to premature benefit termination and social security underpayments, and cause financial hardship and desstress to those affected. i have addressed in my recent action -- and will delay the public release of death data through the death master file wimp believe the actions could mitigate some issue is just mentioned. ssa must accurately process the death reports it receives to terminate payments to deceased beneficiaries and avoid overpayments. in several audits we estimated

ssa has paid millions of dollars to by-riz after their deaths. based on our audit work and recommendations, ssa now matches and corroborate payment records with number holder records every month, and age exchanges data with hhs to identify deceased beneficiaries based on their enrollment but non-usage of medicare. these initiatives have improved ssas ability to process benefit terminations due death, recover overpayments, and refer allegations of deceased payee fraud to our office. last year we investigated over 600 people for deceased payee fraud. these are cases of individuals who conceal someone's death to ill illegally collect social security benefits. criminal convictions of 150 people and $5 million in officers, restitutions and projected savings in one example, a woman collected her mother's social security and federal civil service benefit

ford 35 years after her mother died. ssa identified the case through the medicare nonutallization project. last year the woman pled guilty to government theft and was sentenced to 18 months of house arrest. the was ordered to repay $350,000 to the ssa and opm. this is a high investigative priority. cases of deceased payee fraud can lead to significant government recoveries and savings and federal prosecution efforts helped deter others from committing this crime. before i conclude i want to acknowledge our audit fors and a littles outstanding work has garnered national media attention. we're meeseed our evers are making an impact in promoting overdue discussion on these issues but i speak for my entire staff when i say we don't do this work to make news headlines. we do this work to ensure the integrity of ssa's program and promote public confidence in social security and the federal government. this and is always will be our

sole mission wimp'll continue to work with ssa and your committee to address the issues discussed today. thank you again for the invitation to testify and i'll be happy to answer any questions. >> thank you, mr. o'carol. our next witness is the current controller of the office of management and budget. mr. madder held various position ted irs from 1971 to 2003 and then ten years in private sect for before returning to government service. >> thank you mr. chairman, and distinguished members of the committee for inviting me today to discuss the federal government's ongoing efforts to prevent, reduce and recapture improper payments. i appreciate the opportunity to provide an update on this important topic. our partnership with the congress consultation with gao, and the important support of the ig community over the years has been vital to our efforts. addressing improper payments asia central component of this

administration's effort to eliminate waste, fraud and abuse. when the president took office in 2009 the improper payment rate was 5.2% an all-able to high. since then the administration working together with the congress has made progress by strength 'king the accountability and transparency through annual reviews by inspector generals and expanded requirements for high priority program such as requirement to report supplemental measures and program information on payment accuracy.gov. as a result of this effort in 2013 we reported an improper rate of 3.53%. during fiscal year '14 we experienced an improper payment rate increase in major programs, including medicaid, fee for service, earned income tax credit and medicaid. and unemployment insurance. over the same period other major programs experienced improper payment rate decreases

including medicare part c supplemental nutrition and assistance program and public housing rental assistance. as a net these changes resulted in a government-wide improper payment rate of 4.02% or 125 billion. notwithstanding this, agencies recovered roughly $20 billion in overpayments through payment recapture audits and other methods in 2014. while progress has been made over the years, the time has come for a more aggressive strategy to reduce levels of improper payments than we are currently seeing. that is why the administration has proposed to make a significant investment in activities to ensure that taxpayer dollars are spent correctly by expanding oversight activities in the largest benefit programs and increasing investments. over the years the administration has worked with the congress on legislation regarding this topic, and these

laws have provide evidence agencies withnew tools and techniques to prevent, reduce and recover improper payments. the president's fy16 budget provides the opportunity to build on this congressional support and administration activities to reduce improper payments. there's compelling evidence that investments in administrative resources can significantly decrease the rate of improper payments and recoup many times their initial investment. examples of proposals in the fy16 budget include a robust package of medicaid and medicare program integrity proposals strategic re-investments in the irs, a robust package of social security program integrity proposals, a proposal to expand the department of labor's initiative to conduct re-employment and eligibility assessments and re-employment services and improving further the accuracy of the death master

file by sharing across multiple agencies. in addition, -- and this began long before we knew what the improper payment was was going to be for the fiscal year -- the office of management and budget issued an appendix to its circular on internal controls entitiled "requirements for effective estimation and remediation of improper payments." and agencies were instructorred to re-examine improper payment strategies on a number of fronts governmentwide. these new guidelines were issued in october of 2014, and provide strategies for agencies inspector generals to key on improper payments. in addition to these government wide initiatives on february 26 of 2015, the director of omb sent letters to agency aids for dol, hhs ssa and treasury that have the largest priority

programs. this direction requires the early implementation of the appendix c requirements that it just mentioned, by april 30th april 30th of this year. the direction further requires that each agency conduct the following analysis and present it to onb. one, provide a comprehensive corrective action plan for each program in question. 2, review categories for reporting improper payments and, three, provide analysis linking agency efforts in establishing internal controls to the internal controls they have for improper payments. under this administration we have focused on the issue creased use of technology in data to address improper payments. the use of data analytics provides insight into the methods and improving the performance and decisionmaking capability. examples of agency's current using data analytics to prevent

improper payments include the cms' fraud prevention system dols integrity center for excellence. improper payments remains a high priority to this administration. although progress has been made, much more remains to be done and we need your help. we look forward to working with the congress to pass the president's '16 budget and we expect additional progress as we execute against our new improper payments guidance during this fiscal year. thank you for giving me the opportunity to testify. i look forward to your questions. >> thank you mr. mader. our knicks with is miss davis, from the government aptable office. >> chairman johnson, members of the committee. thank you for the opportunity to be here today to discuss improper payments and the use of death data to prevent payments to deceased individuals flint. fiscal year 2014, federal

agencies estimated that improper payments totaled $124.7 billion. this represents a significant increase of almost $19 billion from the fiscal year 2013 estimate. the increase can be attributed primarily to increased error rates in three major programs. medicare fee for service, medicaid and the earned income tax credit. these three programs accounted for about 65 percent of the 2014 estimate. nevertheless improper payments are a government-wide problem. the 124.7 billion estimate was attributable to 124 programs across 22 agencies. 12 programs had estimates exceeding $1 billion. one large program temporary assistant to needy families outlays of more than $16 billion, did not report an estimate citing statutory limbses. >> say that again please.

>> that tanf, with outlays of more than $16 billion, did not report an estimate citing statutory limitations. in the financial report of the united states government for 2014 gao reported the issue of improper payments as a material weakness in internal control because the federal government is unable to determine the full extent to which improper payments occur and reason -- reasonably assure that appropriate actions are taken to reduce them. i inspectors general are required to report annually on their agency's compliance and criteria and improper payment legislation in december 2014 we reported that ten agencies did now comply with the criteria for 2013 as reported by their inspectors general. the two moats common areas of thon compliance were publishing and meeting improper payment targets and reporting error rates below 10 thursday there are number of strategied that agencies can employ to reduce improper payments including

analyzing the root causes of improper payments in order to design and implement effective preventive controls. one major root cause for improper payments is insufficient documentation. for example, hhs reported this as a primary root cause of improper payments for home health claims in fee for service programs. ...

maintaining death reports could result in untimely or erroneous death data. for example we reported november 2013 that ssa did not independently verify death reports for all social security beneficiaries or any non- beneficiaries before including them in

death records. when death date is not verified there is increased risk that such data will be inaccurate or incomplete resulting in other federal benefit paying agencies using data to make improper payments. we identified errors with death data finding instances of records with the day of death preceded the date of birth and records showing recorded a subject between 150 and 195 years of age. we recommended a risk assessment be conducted always to address, and the feasibility and cost effectiveness of doing so. our report noted that ssa electorate and guidelines for determining agency eligibility to access the folder file. we recommended they develop and publicize guidance to more systematically determine access eligibility endless better inform

agencies as to when they might be eligible for access to more complete death data. because death data can be a useful tool in data matching to prevent improper payments, the human efforts are needed to help minimize the risk posed by an accurate and in complete death data and ensure agencies receive appropriate access to the data. as a final.we would like to emphasize it is critical actions are taken to reduce improper payments. considerable opportunities for agencies, auditors, and other members of the accountability community to work together with congress ensuring that taxpayer dollars are adequately safeguarded and used for their intended purposes. chairman johnson this completes my prepared statement. we are happy we are happy to answer any questions. >> thank you. i would.out the fact the director geo education workforce and security team

in might assist in asking questions. prior to coming here today did you take a look at the ms. miss rivers case to find out what the status is with her current status? >> sen. the senator, the news media did not share the case with us beforehand. i did know she was testifying today. i did a look at the specifics of her case. it would it would be unwise to discuss that an open forum. >> fair enough. how many people are you aware of our in mysteries position? >> fewer than 9,000 per year have that circumstance happened to them. usually, senator we learn of the occurrence by the individual reporting directly to us. we advise the individual that we can correct that if they visit our office.

as ms. miss rivers identified, we requested in individual brings several proofs of it is the with them including state issued forms of identity from a birth certificate a birth certificate if they have one so that we can correct the record and when the individual user office we issue them a letter indicating that there was an error in that it has been connected. >> the name may be moved from the master file but the effects continue to linger can you describe what happens? >> sure. the social security administration shares the public death masterfile committed does not include state data. still around 84 million records with the department of commerce. commercial entities commercial entities can procure that the record, that database from the department of commerce. it is widely used across

that only government but the commercial sector as well. the department of commerce requires parties they receive that information to subscribe to updates but sometimes i would suspect i would suspect all entities who have looked at a death masterfile have not looked at the most current death masterfile. how often are commercial entities required to update those files? >> it depends upon the contractual arrangement that an entity has with the department of commerce. >> can you just kind of describe how someone on death masterfile how identity thefts can create fraud with those names? i can understand the masterfile is published in people can quickly try and claim a tax refund with the

social security number which is why information can be held for three years, how else is that fraud committed? >> well, i think our inspector general might be in a better position. >> one of the ways we are finding of the fraudsters are doing it is the more they will do is go to one record that is out there for they're, for example a state record listing all of the deceased people and then go and take a look at one of the death masterfile and see if a person is alive in one record and dead in the other and then what they will do is claim to be that person and go after the benefits. that is one method. as we know in other cases they adopt the name and information of the person and then file for credit. >> have we considered is there a law to prevent them from doing this? why don't we purge?

>> let me 1st say, senator, that the records in the death masterfile we procured largely from the states. the the primary reporters are state bureaus of vital statistics for the individual family members doctors, the database contains over 100 million records. it has been in existence since we began approximately 80 years ago. the record-keeping processes, as you might imagine have evolved over 80 years our current program policy requires evidence of that. the risk and just doing a blanket update or change in data is that it is highly likely that we would create another scenario just like mrs. rivers because in the ig report they identified in

a group a group of 6.5 million that there were living individuals. that is because often times individuals who are are on the record lists under a number command they are connected in our databases but the way we connect to them in years past is not as accurate as it is right now. it is possible a while the primary number holder may be deceased there are records links that are not that are records of individuals that are not deceased. the primary reason we cannot do that is because we want to prevent any inadvertent additions to the bmf of individuals who are still alive. >> we are talking about how many people over 112? >> 6.5 million, chairman. >> right. this is where we want to put in the date of death

basically. how many people are living today that are over 112? >> well, one of the records we have is that one of the databases that will show them as deceased and then in another databases will show them alive. 1.4 million. we have not really set a number in terms of the actual living. we go on the fact that we use the estimate, sort of similar to mr. brown of about 1000 per month living people are, you know report that they are alive on the death masterfile. >> but again those would be much younger people. why don't we just purchased the numb i didn't or list on the the number i didn't a death date of death for people over 150. let's have some sort of protection for somebody that just might -- we are talking

about 6.5 million records. 6.4999. why don't we do that? >> you are correct. one correct. one of our recommendations is, just as you are saying with purging, one of the thoughts is that ssa could make a notation on each of those files and make it kind of like a person that a person that you had to get a replacement social security card. let's say you are a battered spouse need to get a new social security number for security reasons. they put a record on your record, a notation, has been command it shows that that record has to social security numbers. numbers. we are recommending that they put a record like that on all the people over 112 years of age so that one

would reflect as deceased but also, if accidentally someone who had a birth date of 1957 and was keyed in as 1857 when they realize that they were losing benefits this is an -- listed as deceased it would be easy for them to repair. >> can the social security administration do that themselves? do you need congress to pass a law? >> sen. johnson, we are currently in the analysis phase. the audit was issued approximately ten days ago. the good news is they look at this topic.

so i think it i think it was a house member who propose that we start requiring agencies to note what improper payments are and secondly begin reporting them. 2,032,042,005 there is an increase in the number of improper payments that i did not feel good about. the number just kept going up. somebody finally said, your

just getting them reported. still not convinced. along around 2010 we reached a time where we fixed most line share agencies were reporting proper payments. we added a requirement. we wanted agencies to record the proper payment and report them. we also want them to stop making improper payments. we want them to to the extent they can recover monies cannot recover monies. if someone report last year, $20 million that's a pretty good amount of private money. and next up is to say that we came up with the administration and do not pay which is part of the

2012 legislation. last congress we tried to go further beyond that. that sort of thing. did not get through the house because of objections of a subcommittee within the ways and means committee. committee. we will take another run at it. i was stunned when i saw the improper payments number for 2014 because we saw number of years were that number was going down. it pops up by $20 billion in 2014. given us a very good a very good to do list. i mentioned this the chairman. i won't go through it all. the complies with public integrity and involve spending money at the irs. a lot of people who do work

on the earned income tax credit filings. two thirds or three fourths of the people who help people file for eit c are not cpas, may may be very good people, but they are not really regulated by the treasury or have the kind of credentials we might hope. drill down on that. i want you to drill down for us on the ie tc the credentials of the folks who are helping most people file and what the problem is and what we should do. >> thank you. >> it's a lot of money. >> it's a lot of money. it is important to step back and remember the earned income tax credit program was passed and the president reagan. >> the best antipoverty program in the country.

>> last year actually 26 million american families benefiting from benefited from the program. it is one that over the decades has proven its value command i think, sen., you touched on and actually this davis touched on it, too it, too, it is a program that has a high degree of complexity and that it is really based upon claim dependent children and a certain income level. and with you know with separations, divorce is establishing the custodial parent and making that determination, verifying the income when you're making that credit as to the complexity of the program. he touched on an area the administration has been asking for help and to last couple of years. well over 50 percent of these 26 million eit c payments are actually done

by third-party providers who are not cpas are enrolled agents, individuals who are authorized to actually represent uri in front of the internal revenue service they are just they are just preparers. having dealt with this issue for a number of years i am struck by the fact that as a society we seem to register, regulate, license yet we don't want to regulate individuals who actually have a partnership with the irs in administering the tax administration and it's important credit in a fair way, fair to the taxpayers and to the government. i think in the pres.'s president's budget he once again asks for a series of initiatives, whether it be resources or some assistance in regulating and licensing these preparers. >> just say to my colleagues, i invite there

attention to your testimony. i think we start on pages two and three, but proposals in the 2016 budget. you give you give us five or six really good ideas. a really good to do list command i hope that you take it serious. i plan to. let me start with you. one thing, if you do nothing else do this. >> the 1st step is to look at cleaning up the data in the file. there is a lot of noise in the file. millions of reports annually, less annually, less than one half of 1 percent are corrected. that gives me a concern that

this is being brushed off. we no there are issues and problems. it problems. it is easy to say when your not looking at large blocks of cases. if you're not verify reports from family members reports from people funeral directors, verify reports from folks are not beneficiaries your not verify reports are some pieces of the data does not match the record. that is a significant potential amount of non- matches you might have to correct down the road. to see our report, you cannot fix the reports if you don't know about it. we have it. we have to look at the integrity, clean it up whether it is a look back or perspective 12 there is a lot of noise in the file that needs to be taken care of before it can be a much better program integrity tool. >> senator. >> thank you. thank you for being here.

let me make a quick comment. it has been an ongoing issue social security disability. i have dealt with it for quite a while. i have a letter that is still outstanding with ssa dealing with the notice of proposed rulemaking from february of last year. just getting a full record medical records that must be submitted. submitted. i won't bring that up today but it is outstanding. i won't try to ask you a question directly, but we are still waiting. let me ask a question. the social security administration the right place to manage the death masterfile? it seems like that is kind of growing up organically as a place that will gather. is that the right spot? >> we believe that social security is the organization

that is best suited. as my two colleagues social security have justified they are receiving the information both directly from families, funeral homes, states but what we have is a a process and a system that needs to be expanded as both gentlemen testified, we don't testified, we don't have a state that has access to use the electronic system which clearly improve the quality of the data. there are a lot of fixes that we talked about today that need to be put in place. >> fixable in that current structure. >> i believe so. >> the social security administration, do they feel like this is part of there mission? obviously being shared with multiple agencies, multiple entities are looking to the

social security administration to get that information. >> it is important to understand that we need the death information to administer our programs. the use because it is consolidated across multiple reporting sources and is, in fact, very reliable it has grown in value over time. records are being used for purposes they were never intended for when they were actually collected decades ago. date of birth and date of death from several decades ago, no one envisions today that it would be available electronically to multiple parties outside of the agency. as i indicated -- >> is there something that the agency sells? >> we provide the information. >> is there a cost? >> we are reimbursed for cost's. >> does that come back? >> commerce. >> can the states charge us

to get that information? and confirm that it is a match. we also get it more timely. >> give me an approximate cost. >> cost. >> $3 a record. for those that send the information it is under a dollar. >> what do they do to then

verify? is it $2? >> it is an unverified report. >> once processed it goes on we are paying to get the records, sewing them to commerce, sewing him to and to agencies and other private individuals to recoup the cost. once we go to the verification how much does it cost to verify someone is an unverified name? >> it is not a discrete unit a discrete unit cost. >> is there an average cost? >> we usually have a technician a technician contact a family member and confirm the death.

>> 180,000 180,000 individuals died while receiving individual -- disability payments. obviously they are already in social security disability process. e-verify requests and more command more than 90 voter registrations in that group that were already dead. help me understand this process. as you see at this.we have verified records from states being verified and they come in to me if we have six nap million over 112 years old old with individuals on social security disability. >> senator, that is our biggest concern. we take a look when we did our audit there were 13 people in the united states.

by the time we finished there were 109. 35 people over 112 the whole world. 112 the whole world. all of those numbers of their command someone takes those numbers and start misusing them and that is my biggest concern is when that information gets out someone can impersonate the right person, vote. >> names that have never been submitted by a state or been verified by ssa? >> most of the 112 are from years ago back in the 70s. >> what about disability. >> we are finding people that are listed as deceased and getting benefits. the record that we are talking about today is one

file at ssa. the other file is the master when someone calls when someone calls and says there is a deceased person to immediately stop the benefits are going out it is put right on the payment record. were it goes over it gets confusing when you are talking auxiliaries and things like that. it does not list as being deceased. >> the opening bank accounts, voting, all of these different things that you found as you went through this process : people that have died or are numbers still being used? when they think they are alive. they might even try to get social security benefits. >> i yield back.

>> thank you for your testimony and you raise a lot of interesting issues here today. as i mentioned, after testified, this is not an unusual situation given the fact we had a marine veteran that was highlighted in the media for his trials and tribulations with units of the fact that he was improperly list is being deceased a couple times to the.of losing his veterans affairs benefits, the treasury department shut down his bank account amazed credit score was ruined as well when he was trying to purchase a house and it took them several months to you through the process. process. and so this is an anguishing issue for many folks. you mentioned about 9,000 individuals. >> correct. >> my question is, how do they get -- of those what is

usually the event triggering them getting on that list? >> two primary events. >> a reporter. >> correct. we get reports from family members, doctors, the postal service, the treasury. >> a report from a report from the postal service, not a death certificate. >> that is an unverified report. >> you would not just say let's put them on the death list. >> correct. we would suspend benefits. >> an individual to visit one of our offices provide

evidence of their identity. we can do that through his scheduled appointment so that the individual does not have to wait, and usually it takes an hour or two to complete. >> but the problem is that even if that is done in the information is not proactively communicated to the commercial vendors, others, vendors, others, banks, others that might want this information. is there a way to do that proactively? otherwise we are just relying upon the service to go back and constantly check the list and often times an individual does not know that they are on this list. there is seemingly no explanation and yet no proactive measures on the part of the social security administration to say, we made a mistake.

>> correct. the measure that we take, sen., is to share the updated file the following week with the department of commerce. the mistake is corrected. a subsequent week it would be identified as not being on the death master file share with the department of commerce. you asked specifically about the commercial entities. we believe that there would be value. >> going to the other fascinating part of this hearing, the six and a half million people in your testimony you said that these folks are not receiving social security payments. there is no data in terms of date of death. at some at some time these individuals probably receive social security checks and then stopped.

why does not that trigger something? if not getting picking up your mail is enough to get you on the list was stopped them from once they stopped receiving social security checks we can probably assume they are no longer alive. >> the interesting part is many of these were back in the 1970s when people were coming in and say a person who was not getting benefits at the time, family member a widow, jump jump jump dependent site that is where a lot of these records were created. the person did not have the benefit, benefit, was not a record which is the crux of a lot of these things. old records with little ways of having the ability to get some. >> because they never were receiving a check to begin with. >> right. >> is that why it is the 112 your figure? >> well, we get word from a

a financial institution that the two accounts were set up our auditors looked and figured out the highest age of record where we came up with 112th. >> the same kind of numbers? >> it is interesting on that one. what they had been doing is that when a person reached 100 years of age seven to they would reach out to verify that the person is there. we were getting fairly get good information, probably saving about 8 million per year. then we decided, and i mentioned in my testimony, it makes more sense to take a look at someone not using medicare.

and we had to thing is going, age and the fact that they were not seeing a dr. four or five times better results than we were getting just by using the age limit on it. but everybody is aware of that and we keep taking a look. we have had different projects. >> and where are we? >> we have been using three years. it seems fairly good. it has been so successful that they are doing an audit and taking a look at medicaid. >> thank you so much. >> last year during a hearing a hearing on this subject i learned that we were selling the risks to

other government agencies which is hard for me to wrap my arms around. we were told that this is required by law. >> law. >> that is correct, senator. we are required to seek reimbursement. >> let's assume that we could do something legislatively. would you see would you see any reason why we cannot put a secure website of? we have hundreds of millions of dollars going out the door and they are trying to budget paying you for information. information. all of this is being gathered in the public domain. it seems bizarre to me that we are not focusing on a priority of a priority of a policy that would make information available to others easily.

>> we would agree and in our testimony we supported the goal of the ranking member's bill in the presence of budgets to make the fold death file available which provides the complete set of records to all federal agencies for all federal payments. >> it would be great. here is the other thing that gets me. you get data in. you are putting you are putting it in the system and selling it without verification. >> that is correct. we do not verify records for not beneficiaries. >> you get a record and put it in the system for another agency to buy, but buy, but because it is not a necessary recipient you are not going?

>> it is marked as unverified. >> maybe the ig would know or gal would know call are these other agencies going and verifying? >> no. there is no additional verification. the verification. the agencies pay for a data set, an annual set plus monthly or weekly updates. they get information that they believed to be true and correct and there is no additional verification. >> i would add that i clearly articulated that the intent of the file is for social security purposes. it is aggregated across jurisdictions and his comprehensive for the most part.

it does not include every record. we cannot confirm the veracity of the file and a shared verify it if they are going to use it for business purposes. >> what if they want to pay you to verify? can you just verify them all and charge them for it? >> we believe we're verifying records that we should be for the program purpose. >> the law would have to be changed. >> correct. >> daniels is no. >> i don't believe so. they have a pecking order. reports reports from states are deemed most accurate pre- verified and are deemed to need of verification. there are reports from family members and funeral directors that are believed to be highly accurate. i do not think that is a law

>> that is agency policy. >> just one -- >> have you figured out what it would cost you to verify? >> i would have to get back to you for the record. >> with that not make sense? >> this boils down to a fiscal law question. the agency is not permitted to spend trust fund dollars. >> i just got word for a minute.

>> this is an agency that the vast majority of information they are distributing is easily available online. have you given some thought as to your alternative distribution method? >> we have not because at present we serve as the data clearinghouse. >> and the money goes into a revolving fund which keeps them in existence. this existence. this is an agency that has outgrown its usefulness and purpose. i am determined i am determined and think most of my colleagues share the determination.

i think you should begin pricing out. maybe you could maybe you could use that money to verify the other agencies. >> understood. >> thank you. >> we will be supportive of that effort. >> we agree with my colleague on this. so this. so i wanted to ask to understand this information sharing piece, in order for you to share information it sounds to me because of the limitations put on what you can do with regard to the trust fund we're going to need legislative action to have a broader information sharing. >> the response i provided to the senator was relative prepare to have verifying records.

>> as i understand it we are were also as we look at this challenge we are facing in terms of the dmf list we are not sharing among states. do we share do states share with us -- i no they are sharing in terms of vital records, but do we share with states will we no? >> we do. we share with those states who have a responsibility for a responsibility for administering federally funded benefits. >> of any kind? >> yes. >> one of the things that just seems as i look at this thing we are not communicating amongst each other and then there is also the amount of money at stake here a lot of us talk about

wanting to address sequester. we could do it if we got improper payments to a much more reduced level these resources we are talking about this is big money. and so i am looking at this thinking how do we also that only share information with each other what steps do we need to take to verify and further? a lot of publicly available information we're leaving on the table. i would love to get there impression. isn't they're some publicly available information? >> that is correct. we did not it a few years ago.

we were looking at we saw how many records were suspended. and then we found that 57 were deceased. probably one 3rd had the information in their records and it was just a question of cleaning up. we were able to get death certificates from the state. databases were available. third-party databases are useful. >> third-party information and when i here mr. o'carroll's example what they are doing in submitting

the vital statistics command does not have the same kind of accuracy. do you need do you need legislative proposals to be able to consult third-party information? also what is also, what is it that we need to do from the states perspective. the vital records office would not have submitted that. >> the data set just mentioned, the 58 number holders those recommendations were sensed the agency last friday. the best thing that we can

do in my opinion level funding will go a long way. many of the files are in jurisdictions not looking electronic death registrations. funding them to move to electronic. electronic death registrations verifies against social security before the death certificate is issued but for a report of death is made. this is a lot of money being left on the table that could be used for real things.

why haven't we made it a bigger priority? the inspector general mr. o'carroll. i would love to hear why this isn't a bigger priority. this is a huge issue. >> agreed. we are in a unique a unique position. we represent the council of inspector general's as liaison. there has been a lot more emphasis on identifying improper payments, curbing improper payments. making all of the government agencies compare this information. they won't be sending out a salary check.

the only other one data matching between agencies is handicapped in so many different ways. one person on benefit for one agency and should not be for another. match data to find people also getting disability benefits. but in the know that they have improved. it is that type of data matching that would be extremely useful. >> my time is up.

>> it is a lot change and there is a bill out there that is included. >> if you are ready. >> thank you. thank you for your testimony. i do appreciate it. i don't think anyone disagrees. i would like to ask if you would please my we will read this quote that came from the management. this was in response to their findings and recommendations. the recommendations we will create a a significant manual and labor intensive workload and provide no benefit to the administration of our program.

i think we have talked about this. any data they have provided to the government and the public has to be accurate. none of them are getting benefits. if there is the attention put on it by congress that resources are needed that is important.

there are so many other different benefits in the government, plus what we are looking at with voter registration and drivers licenses, every thing else and this is the only thing out there to refute it. >> i agree and think that it is a good start. we do know that now we need to move forward and correct the deficiencies. there are so many improper payments not to mention some of the issues that have been brought up with those not receiving payments. we also have fraudulent voter registrations, illegal use of numbers for employment or for government assistance. i do believe that you have delivered around 70 recommendations to the social security administration over the past number of years. can you please tell us how many of those have been implemented over the years?

>> over the 70 that we have recommended, well, recommended, well, 1st there are two steps. the 1st is an agreement. a 93 percent agreement level fifty 50 have been enacted. in fairness, on some of them we have made maybe four or five audits with a lot of different recommendations. we bring it to there attention. >> with these recommendations and any others coming out, come can any of you really given overall cost estimate? any of those parameters that

might be necessary to make sure the corrections regimented. >> the recommendations from we are committed to making those changes within our appropriation. we have volume to your value in following the advice given. given. i wanted to close by underscoring the fact the six and a half million all records that were looked at identified zero improper payments. less than 1 percent of our benefit overpayments are resulting from death.

processes have improved tremendously over the years. the last decade processes have grown substantially more robust. more accurate information, more timely and 50 million benefit dollars from overpayment. six and a half million numbers that exist out there. even though they may not be drawing benefits on those numbers command is still an issue whether it is voter registration or some other fraudulent use of a number. that is a concern. >> correct. we have committed to look at those numbers -- records

before the end of the fiscal year to do a full analysis of what can be used from those records. >> very good. if you were a lawmaker will bomb maker for a day what would your recommendation be? >> send all states to use electronic death reporting. the adoption rate has been steady. we only have 37 states and to jurisdictions. jurisdictions. we need all states, all jurisdictions in every state using electronic reporting. the most effective and accurate report that we receive. >> i appreciate that. thank you. >> can you say that again.

i want to back if i could. what would it be? you are the only one i got to pick up. that is good. let me ask before we finish this one thing. i want to come back to the question of your testimony. a series of items and ideas that are contained in the presence 2016 budget. would you step through those for us again?

a series of program integrity initiatives. their program integrity initiatives across command i think they have demonstrated in a pilot a pilot program with the states. recognizing that unemployment insurance is a lot granted the state. they've demonstrated block granting as the key to creative analytics. again in 16 again in 16 we have asked for continued funding of those initiatives. there are about a half a dozen that we mentioned.

if we can get through the full master file. that's the one. the other is and i strongly believe in order to save money we need to set. i believe that i think the ministration strongly believes that we will see benefits and driving not only the rate but the total amount of improper payments down if we are allowed to make those kind of enhancements. >> any comments on what we just heard? >> i believe funding would

be the 1st best at. prospectively giving all would be the way to go. >> in terms of the timing, timing, i seem to recall five months. ..

>> anyone else want to give us a killer idea, maybe something that has already been mentioned once or twice? maybe not? >> i think the improper payment act do not pay hold agencies accountable. when you are measuring that it's going to hold them accountable to make it a priority. i also think electronic verification at the state level i think it has proven that those death reports are highly accurate and moving in that

direction. i would agree with mr. brune that's prudent and it would allow them to look at other verification processes that perhaps moves resources to those other areas and i go again to verification of family members and funeral homes. we look at some data of 82 corrections in 2012 and 13 and we pulled a small case sample 46 cases. 35% of those cases, those folks were in fact alive but -- >> what%? >> 35% of the 45 pieces we looked at. they were erroneously placed in the file. when you look to the source of those reports it was family members and those are typically regarded as being highly accurate and not something -- subject to verification. the free up resources they don't have to focus on the states who are verified electronically. perhaps you can look at these

other policies and use additional bear vacations. >> ms. davis we have a picked on you very much. if i could look at it that higher level at the overall improper payments estimate this past year which was up almost $125 million there were drivers and those drivers or medicare service, medicaid and the earned income tax credit program. when you look at those individually medicare service was almost $10 billion medicaid a little over 3 billion the earned income tax over 3 billion as well. if you look at those and you have 65% of your entire estimates of improper payments what is a concern is that these programs particularly health care programs are growing. for example hhs has some estimated or predicted that over the next three years the

medicare and medicaid programs are going to expand program outlays by 8% over the next three years so if you take that and you compared or analyze it against their rate increases you know there are some concerns again to be a lip -- little bit more specific the rate for the fee-for-service program is 10.1% last year and it's now 12.7%. medicaid also wants up the whole percentage point. the earned income tax credit over the past five years has been running 25% and last year was over 24 now to 227 so if you look at these programs and the facts the error rates in these programs are increasing and compound that with the possibility that program outlays are going to increase it's going to be difficult to get a handle on this overall improper

payments. >> not only is there ranking member -- to this issue but is also a good sprinter. i really want to explore the edr's and the differences between the states and the data that comes from those. i don't know who is the best person to talk to about that. mr. o'carroll? do you have stats in terms of the information coming from states with the edr versus those that do not have edr? >> yes we do and there is really two dimensions both of which i think are important to us and a value in the conversation about improper payments. one dimension is timeliness of reporting and within the edr arena we average a report within five days of the date of death and within 24 hours when the

state becomes aware of it. that's very timely. >> again those are in the exact form that you want the men. it totally matches your database? >> correct and for the record i could provide you what amount those inquiries do not match when they send us a name and an ssa combination. what doesn't match before they report i want to make sure that i mention that process is that the first step before anything is sent to us is an ssa match. if that occurs we will get the rest of the information. if it doesn't occur it goes back to the reporter in order to doublecheck to make sure they have the correct information and that they did not miss key something. >> the states of him have edr are you getting those from their offices of vital statistics or is that where you're getting things from financial institutions and all of the other?

>> all of the other in we could get multiple reports senator even in an edr state and it's important to recognize that in those states that have adopted electronic registration every jurisdiction within the state does not use it equally. so some jurisdictions and counties or municipalities may be add 100% utilization and others may have a low rate so there is much more work to be done. part of that i think is a reflection of the fact that at the local level these records were maintained in different formats and the quality of that data varies. >> so you don't have the localities within the state some kind of central data center and then have those electronic records forwarded to social security? do you are getting these from multiple sources in the state? >> it's up to the state how they send us information. usually it does come from the state bureau of vital statistics

but how those entities are organized at the state level varies. >> the 37 states you get that from they come from a centralized vital statistics office in the state? they'd may be getting information from multiple sources but they accumulate it and there's just one contact for social security? within those 37 states? >> that's generally true that's generally true but it can vary depending on the state. >> so what has been a hangup in the 13 other states? is a resistance? is abundant? do they fund their death records or registries themselves? >> i would say funding is definitely part of the equation. i think that some states recognize that they have more work to do that the state of their records would require a lot of effort in order to get them, to get the records to a point where they could send it to us reliably in the electronic

mechanism that we request. >> i'm all for states rights but this may be something that we maybe need to work on. ms. davis i did want to just talk about exactly how we calculate the total number of improper payments and also verified my staff in 90% of those are overpayments correct? is it about that or what is your information in terms of overpayments versus underpayments because we talk about improper improper. what makes? >> we have not been recent work to determine the actual mix. i will say the majority are overpayments and there are a number of items of course better classified as improper payments because there is insufficient documentation. >> the calculation of the $124.7 billion, that's all through statistical sampling

correct? >> correct. let me qualify that statement. statistical but the omb can improve -- approved an alternate methodology. >> i would like to go through the panel and if there is a point you want to make one point relatively brief to close off the hearing and i will start with you mr. bertoni. >> to the extent that the d at some point will be made the full file i think you are running out of time. every day as more states come out the electronic system there will be fewer records than there. that file is going to come less accurate so that's going to happen it should be in current or tandem with increasing the data in general. >> thank you. mr. brune. >> senator we are committed to maintaining accurate data. we depend on the states to report that information.

we think fully funding the electronic death registration is the first step to that. we also support the ranking member's bill and would be happy to provide technical assistance on that bill. >> appreciate that. mr. o'carroll. >> we ask for exemption to the computer protection privacy act but it should go to the igs and the parent agency so is an example when we do an audit we can find if there's an issue. if one a.g. -- agency is making payments and other agencies in making payments begin out the parent agencies make those matches. >> thank you. mr. mader. >> supporting the integrity measures of the current budget. >> i appreciate these brief statements. ms. davis. >> the improper payments legislation requires inspectors generals to perform annual compliance with the criterion by pierre and there are a number of

issues that are identified over the last several years implementing the recommendations that are made by these inspectors general would go further in helping to reduce improper payments. >> i want to thank all the witnesses for your thoughtful testimony, your thoughtful answers. ms. rivers thank you for sharing your story and again this committee is dedicated to making sure it's not just hearing the something comes out of this so we want to work closely with all the departments so we can prevent the types of situations that ms. rivers has had to deal with. the hearing record will remain open for 15 days until march 31 of 5:00 p.m. for submissions of statements and questions for the record. this hearing is adjourned.