By Esther Carey
Special to Federal News Radio

Dead people cannot work, earn wages or get benefits. But, due in part to faulty recording processes by the Social Security Administration, that is exactly what’s happening according to a recent SSA Inspector General report.

The IG found SSA did not transfer death information for approximately 1.2 million people from an internal records system to its Numident database, a master file of information on each individual issued a social security number. SSA uses the Numident database to generate the Death Master File and help with the E-Verify process. A variety of agencies and private sector companies use both to ensure they have correct information when confirming people’s identities.

Of the 50 cases randomly selected for review by the IG, SSA failed to transfer the death information for all 50 to the Numident.

“Based on our sample results, we expect the death information for most, if not all, of these 1.2 million deceased beneficiaries was not on the Numident,” said the IG report released Monday.

Four benefit-paying agencies depend on the Death Master File to confirm a person is eligible to receive federal funds including the departments of Defense and Veterans Affairs, the Office of Personnel Management and the Railroad Retirement Board. A June 2010 memo from President Barack Obama ordered agencies to check the DMF, among other federal databases, before awarding federal funds to recipients. The effort is part of the administration’s goal to cut down on waste, fraud and abuse.

SSA also provides the DMF to the Centers for Medicare and Medicaid Services, the Government Accountability Office and the Internal Revenue Service.

“Federal and private entities that rely solely on the DMF to detect deaths would not know these individuals were deceased,” according to the IG report. “Our review confirmed that as many as 1.2 million deceased beneficiaries are not on the Numident and therefore not on the DMF. This missing death information could result in erroneous payments made by Federal benefit-paying agencies that rely on the DMF to detect inaccurate or unreported deaths. The missing death information will also hinder private industry and State and local governments’ ability to identify and prevent identity fraud.”

The Department of Commerce’s National Technical Information Service also sells DMF data to public and private customers like banks, universities and insurance companies.

The E-Verify system, which employers use to determine a person’s eligibility to work in the United States, also relies on information contained in the Numident. The IG report identified 23 instances between January 2010 and June 2011 in which E-Verify relayed the wrong information to employers due to inaccurate information on the Numident.

“It is inexcusable the federal government can’t determine whether a recipient of federal taxpayer money is alive or dead,” said Sen. Tom Coburn (R-Okla.) in a press release. “The importance of the Death Master File cannot be overstated. Failing to maintain this file costs taxpayers at least $120 million every year. Those are dollars we borrow here and overseas to pay dead people. 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.”

Coburn took part in an effort in March to make it possible for agencies to verify with the SSA that the holder of a social security number was still alive.

In 44 of the 50 sample cases, the IG said differences between identifying information such as SSN, name, date of birth and gender caused discrepancies between SSA’s internal system and the Numident. The other six cases did match and should have been recorded.

The report recommended SSA analyze its approach to recording deaths and develop a system to periodically compare internal records with Numident for differences. SSA agreed with both recommendations, although the agency’s response indicated completion would depend on its budget.

“In fiscal year 2013, resources permitting, we plan to begin rewriting our Death, Alert and Control and Update System,” Dean Landis, SSA’s deputy chief of staff wrote in a memo to the IG. “This project will evaluate the death reporting process to identify enhancements to ensure we post death information correctly on our master records, and determine how to correct discrepancies in death data between our master records efficiently.”

SSA also encouraged more states to begin utilizing Electronic Death Registration, an easier and more error-free system for communicating death reports to the agency. Since 2002, 32 states have added this capability.

Esther Carey is an intern at Federal News Radio.

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