Social Security agency must shape up to avoid being overwhelmed, GAO says

WASHINGTON — WASHINGTON -- The burgeoning backlog of disability benefits claims will become the Social Security Administration's largest workload in the next six years, a time when the agency faces other new demands on its employees and the prospect of substantial staff turnover, according to a wide-ranging congressional investigation.

The General Accounting Office report paints a picture of an agency that must modernize and overcome serious management shortcomings if it is to avoid being overwhelmed by the demands of an aging baby boom generation and an increasingly onerous workload.


"If SSA is unable to successfully modernize its operations, it risks significant deterioration of its future ability to service the public," says the draft of a report that is expected to be released in its final form today.

The report will be the subject of testimony today at a House Ways and Means subcommittee hearing that marks Shirley Sears Chater's first Capitol Hill appearance since she was sworn in as Social Security commissioner 10 days ago.


The massive federal agency headquartered in Woodlawn has been reeling from the loss of 20 percent of its work force during the Reagan administration. A subsequent surge in claims for disability benefits has left the agency unable to keep up and prompted it to virtually abandon its reviews of the disability rolls to weed out ineligible recipients.

The agency currently has a backlog of 700,000 new applications for disability payments and a further backlog of a million beneficiaries who should be reviewed to see if they still are eligible. About 6 million of the 45 million people who receive monthly checks from the Social Security Administration get disability payments.

Disability claims are up 18 percent this year after rising 23 percent last year, and are expected to continue increasing. There is a lot of speculation about, but little understanding of, the reasons for the soaring caseload.

Because it is so labor intensive, the processing of disability claims now consumes 40 percent of the agency's $4.8 billion operating budget, and will consume more than half that budget in the near future, according to Phil Gambino, a spokesman. The agency pays about $1 billion a year to state agencies that handle much of the claims processing work.

In addition to the mounting disability claims, the Social Security Administration faces the requirement to send, beginning on a phased basis in 1995, annual earnings and benefits-estimate statements to the tens of millions of workers who pay Social Security taxes each year, a job that will require thousands of additional workers.

The General Accounting Office said it found substantial improvements at the Social Security Administration since it reviewed its opera tions six years ago. But it said the agency has a long way to go to prepare for the daunting workload increase it will face beginning early in the next century.

The GAO found:

* That the agency is unable to control overpayments to beneficiaries or to collect adequately on the $3.6 billion debt that it is owed, chiefly by those beneficiaries. "Despite spending more than $7 million in systems design and development, SSA still does not have the needed automated system to control and account for its overpayments," the report said.


* The agency began to move ahead on a major computer system redesign that could cost $5 billion to $10 billion -- and avert the need for 17,000 additional employees -- before it had developed a plan for delivering its services, thus risking the development of a computer system that would not meet its needs.

* A quarter of the agency's roughly 65,000 employees will be eligible for retirement by 2000 and three-quarters of its managers will be eligible to retire in the next 10 years. Despite the prospect of significant staff turnover, agency employees complained of inadequate training, the report said.

In its response, the Social Security Administration agreed with many of the GAO conclusions, though Lawrence H. Thompson, acting commissioner until Ms. Chater was sworn in, told the GAO in September that the agency was acting on many of the areas cited by the GAO.

Mr. Gambino said Ms. Chater believes the agency "must re-engineer" its current method of conducting business.

The "re-engineering" will begin with the disability claims, the agency's most pressing problem, he said.