Stellar Service

hen Judith Burgess retired from a Big Six accounting firm, one of her first actions was to stop at the nearest Social Security Administration office to inquire about getting her benefits. Mildly worried that she would have to wait for hours in an uncomfortable office or would lack some information required by an apathetic bureaucrat, she was not looking forward to the visit.

It turned out better than she had expected. A receptionist advised her to make an appointment to meet with a claims representative the next week. When she returned, she was received promptly and professionally. The representative answered her questions to her satisfaction and handled her case efficiently. Her monthly checks began arriving on schedule.

Since then, Social Security has notified Burgess that her benefits should have been larger and has paid her the retroactive amounts. She's a satisfied customer, particularly because she believes Social Security has her interests at heart. "I didn't have to go to them" to get the correct amount, she says with some amazement.

Burgess' experience is replicated often. This year 3 million Americans in their 60s will claim the benefits they're entitled to. Social Security pays out one-quarter of the federal budget to more than 50 million people each year. Without Social Security, half of America's aged population would be poor. President Clinton calls the agency's central program "one of the most important and ambitious undertakings in our nation's entire lifetime."

For many Americans, their only regular dealings with the federal government involve the Internal Revenue Service and Social Security. But for most people, dealing with SSA is distinctly different from dealing with IRS. Customer satisfaction surveys consistently produce high ratings for SSA. In 1998, 82 percent of the customers the agency surveyed rated SSA service as good, very good or excellent.

One set of customers is not so happy with SSA: the disabled people of all ages who receive $28 billion a year in Supplemental Security Income (SSI) benefits. These 6.3 million people include some of the most disadvantaged in America. Their advocates complain that they are treated with suspicion, subjected to months of delay after applying for benefits, given less than subsistence money, and victimized by obscure and complex regulations.

Congress and the General Accounting Office, meanwhile, have labeled the SSI program one of the most wasteful in government. Client fraud and poor management are costing taxpayers billions of unwarranted dollars, they say.

Calling SSI one of his top priorities, Commissioner Kenneth S. Apfel has launched a four-pronged effort to strengthen its management. He aims to improve payment accuracy, eliminate a backlog of disability reviews (which assure that recipients still are eligible for benefits), combat fraud and improve debt collection. The program's deficiencies are difficult to overcome, though, because of SSI's complexity and the sheer amount of work that must be done. For example, about 7 million disability reviews for SSI recipients must be completed in the next four years to eliminate the backlog.

As long as SSA must verify the financial status of each recipient monthly and adjust benefits accordingly, administration of the SSI program will be a headache. And along with other analysts, Apfel notes that running SSI calls for a culture shift in an agency whose employees for the most part don't have to worry about checking clients' bank accounts or looking for signs of malingering. But Apfel seems determined not to give up on his drive to restore its good name. He reminds audiences that SSI is a lifeline for the poorest people and says he believes "program integrity" is needed to keep SSI healthy.

Tops for 2000

SSI is one of the few trouble spots, however, in a generally bright management picture at SSA. Observers give the agency high marks for its stewardship and even leadership in important areas. For one, the agency generally has done a good job with its information systems.

SSA was one of the first agencies to recognize that the transition to the year 2000 would be difficult for information systems. The agency got on top of the problem early and has consistently received high marks from the congressional Y2K overseer, Rep. Stephen Horn, R-Calif. "Social Security has been ahead of the curve since the start," Horn says. "It began working on the problem in 1989, eight years before most departments and agencies began to awaken."

In December, President Clinton announced that the agency had passed its Y2K tests and would be ready for the century change.

There have been a few stumbles along the way to Y2K readiness. For example, SSA at first focused solely on its own systems and neglected to pay attention to the disability determination services (DDS) that the 50 states operate with SSA funding. These units evaluate disability claims and forward their findings electronically to SSA. Officials at SSA eventually realized this incoming data, along with the data the agency receives online from 4,800 other sources within and outside government, could potentially corrupt the agency's files, no matter how careful SSA had been to clean up its own programs. Despite the belated start, the DDS fixes were expected to be complete by the end of last year. Although some other data sources may not be ready on time, SSA officials now seem confident the agency will be prepared to accept the incoming information and filter it as needed.

Some IT experts believe an organization's performance on year 2000 readiness is a sound indicator of the quality of its IT management. But GAO has taken SSA to task on a number of IT topics other than Y2K. For one, GAO repeatedly has told Congress that weaknesses in SSA's software development processes could threaten its multibillion-dollar systems modernization.

The agency is completing installation of its $1 billion Intelligent Workstation/Local Area Network (IWS/LAN) infrastructure, which will enable SSA to advance to a modern client-server environment. IWS/LAN consists of 56,500 PCs and 1,700 local networks that are replacing the "dumb" terminals used at 2,000 SSA and DDS offices. The new PCs are connected to the agency's old mainframe systems via a national network called SSANet; the latter are due to be replaced or updated in later phases of the modernization. The first IWS/LAN installations in late 1996 and early 1997 went slowly, but by now the agency and its contractor, Unisys Corp., have by all accounts developed a smooth technique for getting the new systems in place with minimal disruption. Training on the new systems gets high marks from the users and their managers. IWS/LAN installations are supposed to be completed by June.

The new systems improve productivity by automating some processes and speeding data retrieval, but they will be the platform for still more improvements in the way SSA gets its work done. The agency is trying to develop new paperless work processes and streamline its operations with information technology. However, one such effort, a redesign of disability claims processing, has been delayed by unforeseen problems that may delay further hardware upgrades, according to GAO. Prompted by the auditors, SSA is improving its software development processes.

The agency also is plugging some holes in its systems security. Although outsiders have not penetrated the core SSA systems, GAO and the inspector general have pointed out vulnerabilities, including inadequate controls over employee misuse of customer information. About two dozen SSA employees and contractors have been convicted of selling SSA data or otherwise misusing it in the last few years.

No. 1 in Customer Service

Meanwhile, on the customer service side, SSA's telephone service is regarded as one of the world's best, in both the public and private sectors. For some time, customers have been able to conduct much of their business with SSA by dialing 1-800-SSA-1213. Often they will need to submit documents, such as a birth certificate, but after talking with a claims representative on the telephone, they can mail the document to SSA. Until recently, those calling the toll-free number were given appointments for phone conversations with SSA representatives, but now representatives are available in some locations with no advance notice.

The agency also intends to offer more services through the Internet, although it stubbed its toe in its most visible effort to date. In 1997, SSA became one of the first federal agencies to offer more than general information over the World Wide Web when it delivered Personal Earnings and Benefits Estimates Statements (PEBES) online. It was forced to back off when critics said the agency could not be sure the account information about lifetime earnings and likely benefits was going only to the account-holders. Now SSA accepts requests for PEBES online but mails the statements to the homes of those requesting their statements. The agency is beginning to mail PEBES to workers over age 25, without waiting for a request.

Ironically, another retreat from electronic interaction with its customers has won SSA praise from organizations representing the old and the infirm. Under a 1996 law, all federal payments are supposed to be delivered via direct deposit into recipients' bank accounts, beginning in January 1999. Electronic payments are major cost-cutters for the agency and have advantages for many payees, but they pose difficulties for some SSA recipients. SSA led other agencies in pushing for a liberal interpretation of the requirement. Now if SSA does not get direct-deposit information from a recipient, it assumes the recipient has applied for a waiver, which is granted.

But SSA has signed up more than three-quarters of its 51 million beneficiaries for direct deposit, and behind the scenes, the agency is making more and more use of networks to exchange information with other agencies and businesses. For example, it receives telephone bills online and processes them for payment the same way. Employers still mail 5 million annual wage reports to SSA on paper, but the agency is taking steps to encourage more electronic filing. It also will offer employers instant Social Security number verification via PC and modem. The process can take two weeks now.

SSA matches data with many other agencies to detect fraud and improper payments. For example, it gets death records from states to ensure it pays no benefits to dead people. More such matches are key to Apfel's goal of reducing SSI fraud.

New HR Technology

The agency also is beefing up its internal systems. A human resources system upgrade will give employees HR information at their desktops. Employee training is another area where SSA will use the latest technology.

A contractor is developing a satellite network for training and employee communications. The agency also uses an intranet, a closed network that looks like the World Wide Web, for internal communications. Executives put a premium on keeping employees informed because of SSA's far-flung nature. It has 1,348 field offices nationwide, some of them with one or two employees.

Human resources management is largely decentralized, with hiring done by the larger field offices and many responsibilities assigned to the 10 regional personnel offices. On the other hand, the nationwide contract with the American Federation of Government Employees is a unifying force. AFGE represents about 50,000 of the agency's 65,000 employees. It came under attack from the House Ways and Means subcommittee on Social Security last year during three days of hearings that revealed SSA has done little to police the use of official time--time spent by agency employees on AFGE business, rather than SSA work. SSA promised to do better.

AFGE also made headlines late in 1997 when it won about $25 million in back pay for SSA employees. The union persuaded the Federal Labor Relations Authority that SSA had failed to comply with earlier findings on underpayment for overtime. However, relations between AFGE and SSA are by no means the worst in government, according to union officials, agency field managers and others. Since the two organizations formed a partnership council to work out differences, union grievances about agency actions have diminished noticeably.

The prominence of AFGE and the partnership activities have prompted some grousing among SSA's middle managers, who are bearing the brunt of downsizing. Some say the technology is not yet giving them much help in handling the additional workloads they're taking on as their ranks are diminished.

However, technology is proving useful for SSA's financial managers. Aggressive use of automated data matches and electronic funds transfers are among the reasons the agency generally gets high marks in this area. In a hearing last March, Rep. Horn cited SSA as a model for other agencies, and the agency has won awards for innovation in financial management. The agency has been producing audited financial statements for 11 years, longer than most other agencies, and its accounts get passing grades from the auditors.

Smooth Audits

In the past, the IG had audited the agency, but an independent accounting firm, PricewaterhouseCoopers, did the 1997 and 1998 audits. Inspector General David C. Williams says the audits took relatively little time and went smoothly because the books are well-maintained and accounting and management systems are centralized. Although the auditors found SSA's finances in order, they did recommend improvements in information security, disaster preparation and separation of duties to improve controls over transaction processing.

The agency has a managerial cost accounting system, the Cost Analysis System (CAS), that tracks administrative costs but not program outlays, such as benefits payments. CAS gets data from the agency's core accounting system, the Financial Accounting System (FACTS), but is separate from FACTS. A long-range modernization program will establish a single financial system architecture integrating CASE, FACTS and perhaps a dozen other systems.

Although the agency has a good picture of its likely caseload and expenditures in coming years, it has played only a small role in the ever more impassioned debates about the program's future. As many people know by now, the Social Security Trust Funds will be depleted around 2032 if changes are not made. At that time 1-in-5 Americans will be over 64. Meanwhile, younger workers tell pollsters they doubt Social Security will be around to support them when they retire.

Some analysts say relatively small changes now could assure the program's solvency for many years to come, but others want to correct the fundamental flaws in a system where fewer and fewer young workers are supporting a growing population of the elderly.

Since early 1997 GAO has been prodding SSA to beef up its policy and research capacities so it can become a leader in the deliberations over its future. SSA is expanding its policy shop--most notably by hiring GAO's Jane L. Ross, author of many of the reports urging the agency to do more policy analysis, as deputy SSA commissioner for policy. But Apfel and the other SSA executives have not become much more visible.

Some of their reluctance to stake out policy positions may be attributable to the waiting game being played by the White House. President Clinton has called the future of Social Security his top priority, but by year's end he had not staked out a position. At the same time, the agency's preference for focusing on operational issues rather than policy is long standing and may be rooted in its history. Until 1995, it was part of the Health and Human Services Department, and the parent agency did much of the heavy lifting when it came to policy.

Ducking Some Issues

The agency's mission statement gives another clue. Its emphasis is on administering programs, rather than buttressing the financial security of Americans. That emphasis allows the agency to stand out as a leader in administrative areas such as financial management, while ducking some of the structural and programmatic problems its executives and workers must grapple with sooner or later.

SSA's measurement systems likewise have been criticized by GAO and others as overly focused on outputs--speedy processing of disability claims, amount of overpayments collected, and the like--rather than outcomes--the effects SSA programs have on their beneficiaries and the nation as a whole.

SSA is tracking the percentage of callers whose calls to its 800 number are answered within 5 minutes, for example, and the percentage who get through on their first attempt. "Both of these goals monitor access to the agency only, not whether the agency actually provided the caller with the help needed," the House leadership reported in June.

SSA officials have agreed to shift their measurement focus more toward outcomes, but they say they aren't sure how best to measure such outcomes as equity in benefits programs. On the other hand, the agency is collecting more customer satisfaction information and has launched a multimillion-dollar policy research program based at two universities.

In the end, Social Security's emphasis on efficient administration and service delivery is what wins it high marks

The agency scores slightly lower on "Managing for Results" because of that same emphasis, which could be a handicap as the debate about the agency's future proceeds.

Management Grades