July 10, 2012

More than a million dead people are still listed as being alive on Social Security’s master list, according to an inspector general’s audit released this week that found the agency still recorded hundreds of people as having earned wages — even after they’d been dead for more than a year.

Sen. Tom Coburn, Congress‘ chief waste-watcher, said the failure to keep the file accurate costs taxpayers at least $120 million a year in bad payments, and said it’s “embarrassing” that the agency hasn’t figured out a way to keep it up-to-date.

The Death Master File list serves as the basis for a number of other agencies and programs, including E-Verify, which allows businesses to check to see if job applicants are legal.

The auditors said 23 dead people’s names were run through E-Verify. Those names were likely illegal immigrants who had obtained someone else’s information to try to fool the authorities into granting them permission to work — and in this case, the employers were wrongly told the applicants were eligible to work.

“It is inexcusable the federal government can’t determine whether a recipient of federal taxpayer money is alive or dead,” said Mr. Coburn, Oklahoma Republican. “That is embarrassing, especially when SSA is overseeing retirement and disability programs that are going bankrupt. Congress needs to hold SSA accountable for their breathtaking incompetence.”

Social Security agreed with the inspector general’s criticisms and the agency promised to try to find a way to improve checking for dead beneficiaries — if it has enough funding to do so.

The agency had the deaths properly recorded in its own beneficiaries list but not in the Death Master File, the auditors said.

The auditors looked at a sample of 50 dead beneficiaries whose names were still on the list and found that in most cases the people hadn’t updated with a married name or had used a nickname at some point.

But for some, all of the information matched and it appears in a portion of those cases Social Security employees actually deleted death dates.

Mr. Coburn had earlier tried to push Social Security to better manage its procedures. But in a letter to the senator, Social Security Commissioner Michael J. Astrue said it is tough to figure out if someone’s alive.

“Absent a report of death, it is extremely expensive and may even be impossible to determine if a person is alive or dead, particularly if the person died many years ago,” he told Mr. Coburn in a letter.

The agency generally relies on reports from relatives and funeral homes to be notified of deaths.

After a series of reports on federal benefits such as farm payments going to dead people, President Obama in 2010 ordered that before any funds be released, agencies across the government check the Death Master File.

If the file is wrong, it means the government could be paying out money it shouldn’t be spending.

In addition to E-Verify, the Death Master File is used by the Defense Department, the Office of Personnel Management, the Veterans Affairs Department and Medicare.