Report Number: 04-98-001-03-315
Date Issued: March 2, 1998
MEMORANDUM FOR: RAYMOND
J. UHALDE
Acting Assistant Secretary
for Employment and Training
/ s /
FROM:
JOHN J. GETEK
Assistant Inspector General
for Audit
SUBJECT:
Verification of Social Security Numbers Could Prevent
Unemployment Insurance Payments to Illegal Aliens
Final Audit Report No. 04-98-001-03-315
The attached subject final report is submitted for your resolution
action. We request a response to this report within 60 days.
If you have any questions concerning this report, please contact Robert Wallace, Regional Inspector General for Audit, in Atlanta at (404) 562-2341.
Attachment
INTRODUCTION AND PRINCIPAL CRITERIA 4
OBJECTIVES, SCOPE AND METHODOLOGY 6
CHAPTER I - VERIFICATION OF SOCIAL SECURITY
NUMBERS
WOULD COMPLEMENT EXISTING METHODS OF PREVENTING
IMPROPER UI PAYMENTS
7
Weaknesses Limit the SAVE
Program's Effectiveness in
Verifying UI Claimants'
Status
7
Validation of SSNs Would
Prevent Many Illegal Aliens
From Receiving UI Benefits
9
Use of SSN Data Should
Allow Discrepancies to be
Resolved Before UI Benefits
are Paid
10
CHAPTER II - RECENT INITIATIVES INCREASE THE
NEED
FOR EFFECTIVE UI CLAIMS SCREENING PROCEDURES
11
Some States' Claims Procedures Are More Vulnerable to Abuse 11
Improved Procedures Promise Both Efficiency and Protection 12
ETA'S RESPONSE TO THE DRAFT REPORT 14
EXHIBITS:
EXHIBIT 1- APPROACH USED TO DETERMINE INVALID UI CLAIMS
EXHIBIT 2- CLAIM FILE REVIEWS AND CLAIMANT FOLLOWUP
APPENDICES:
APPENDIX A - SSA DEATH MASTER FILE
APPENDIX B - INCIDENTS OF EMPLOYEES' WAGES REPORTED
UNDER UNISSUED SSNs
APPENDIX C - ETA'S COMPLETE RESPONSE TO THE DRAFT
REPORT
ASVI - Alien Status Verification Index
BPC - Benefit Payment Control
INS - Immigration and Naturalization Service
IRCA - The Immigration Reform and Control Act of 1986
IRS - Internal Revenue Service
OA - Office of Audit
OI - Office of Investigations
OIG - Office of Inspector General
SAVE - Systematic Alien Verification for Entitlements
SESA - State Employment Security Agencies
SSA - Social Security Administration
SSN - Social Security Number
UI - Unemployment Insurance
UIS - Unemployment Insurance Service
USDOL - United
States Department of Labor
Aliens who are not authorized to work in the U.S. are not eligible for unemployment insurance (UI) benefits. Yet, illegal aliens are paid millions of dollars in UI benefits because they are not identified by State Employment Security Agencies' (SESAs') claims review procedures.
Although The Immigration Reform and Control Act of 1986 (IRCA) requires the SESAs to use the Immigration and Naturalization Service's (INS) Systematic Alien Verification for Entitlements (SAVE) system to check the validity of documentation provided by aliens who apply for UI benefits, its effectiveness is limited. We found that screening UI claimants' Social Security Numbers (SSNs) was an effective means of identifying illegal aliens who had filed for UI benefits. If coupled with existing INS screening, validation of SSNs would prevent many of the abuses that now occur.
Through use of computer programs in the States of Florida, Georgia, North Carolina, and Texas, we identified some 2,927 claims totaling $3,206,675 which were paid to individuals who filed for UI benefits under (SSNs) that had either not been issued or were issued to individuals who had died before the UI claims were filed. The periods we examined depended upon the availability of data in each state, but generally consisted of the 8 most recent quarters of claims paid for the period that ended September 30, 1996.
Moreover, a substantial portion of claims were filed by illegal aliens. We selected a judgmental sample of the claimants in the states we visited and were able to obtain adequate evidence of the legal status of 241. We found 54 percent (129) of the claimants were illegal aliens who had improperly received UI benefits of $200,291. Many of the claimants we interviewed admitted using counterfeit identification to obtain employment.
Although we did not design our audit to allow projection of the sample
results nationwide, we believe screening of UI claimants' SSNs would prevent
millions of dollars in UI benefits from being misspent annually. Federal
requirements establish that each individual provide his or her SSN to the
SESA, as a condition of eligibility for UI benefits. Thus, benefits may
not have to be paid to claimants who indicate they are U.S. citizens, but
have provided an invalid SSN, until discrepancies can be resolved.
We recommend the Assistant Secretary for Employment and Training:
1. assist the states in developing and implementing means of screening UI claimants for valid SSNs;
2. seek legislative changes to the IRCA's
provisions that would allow states to resolve differences
prior to payment of benefits,
in instances where the SAVE system's primary verification
procedures indicate a material
discrepancy;
3. ensure that states establish procedures to delay
or defer paying benefits to individuals without
valid SSNs; and
4. ensure that Florida, Georgia, North Carolina and
Texas investigate and establish
overpayments, where appropriate,
on claims we concluded were paid to illegal aliens.
ETA'S RESPONSE
The Employment and Training Administration (ETA) responded to our draft report on January 7, 1998, the full text of which is included as Appendix C of this report. ETA indicated that significant improvements could be made in areas that our audit report addressed. Initiatives currently being considered includes on-line verification of SSNs and employer feedback from the National Directory of New Hires. ETA is preparing a UI directive that will deny payments to alien claimants who do not have reasonable evidence of satisfactory immigration status.
ETA disagreed with our recommendation that benefits should not be paid to individuals without valid SSNs. According to ETA, the burden of policing the social security system does not reside with the SESAs. ETA believes that the directive it is issuing will enable SESAs to deny or delay payments to illegal alien claimants. ETA will distribute the Office of Inspector General (OIG) report and study the initiatives to determine if a more comprehensive approach would be effective. ETA agreed with our recommendation that the four states we audited should investigate and establish overpayments where appropriate.
We are encouraged by and support ETA's initiatives to assist SESAs in developing means to validate claimants' SSNs. On-line verification of SSNs would be especially timely and efficient, allowing immediate feedback and querying of claimants for additional information and explanation of SSN discrepancies. Using the National Directory of New Hires to inform employers of SSN discrepancies would also be a good tool to improve the accuracy of wage reports, and ultimately, UI claims. Verification of claimants' SSNs is especially important for telephone claims or partial claims in states with procedures similar to North Carolina where employers submit information to generate claims.
We reviewed the UI directive ETA is issuing and voiced our concerns that illegal aliens with invalid SSNs could be paid benefits if they provided fraudulent documentation that appeared to be "reasonable evidence." We continue to recommend that legislative authority be sought to delay benefits whenever the SAVE system primary verification show major discrepancies.
However, we are disappointed with ETA's position regarding our recommendation that payments be delayed or deferred for those individuals using invalid SSNs. Requiring and verifying that each UI claimant uses his or her assigned SSN is not policing the social security system. SSN verification helps to ensure the integrity of the UI system by preventing illegal aliens and other ineligible persons from using false identification to receive benefits. SSN verification also enables SESAs to comply with the Deficit Reduction Act of 1984 which requires that UI claimants provide their SSNs in order to receive benefits. We continue to recommend that benefits be delayed or deferred to individuals without valid SSNs.
The OIG's Office of Audit (OA) began a survey of the Florida UI program in February 1996. The survey was initiated as a result of a fictitious employer case in Florida. The OIG's Office of Investigations (OI) arrested an individual on March 6, 1996, for fraudulently obtaining UI benefits. The individual established 9 fictitious employers in 36 states and obtained benefits for 15 false claimants by using 48 SSNs. Most of the SSNs were fabricated and losses totaled about $100,000.
We attempted to determine if additional fabricated SSNs could be identified. We performed limited audit work in Florida to develop a methodology to identify the extent that invalid SSNs existed, why they were being used, and whether methods adopted by the SESA effectively detected overpayments. We also applied this methodology in limited scope audit work in Georgia, North Carolina and Texas.
We did not find evidence of additional fictitious employer schemes. Instead, we found many instances of illegal aliens who had received UI benefits. These individuals used SSNs that had not been assigned by the Social Security Administration (SSA). Wages were reported by employers for these SSNs, which then became the basis for filing UI claims.
The Social Security Act requires that each state establish a system for paying unemployment benefits to qualified individuals who become unemployed through no fault of their own. The UI program is a joint Federal-State partnership; however, each state administers its UI program in accordance with state laws. ETA's Unemployment Insurance Service (UIS) provides general guidance and assistance to the states in their administration of the UI program.
States levy UI taxes on employers. States collect these taxes and deposit them in their account in the UI Trust Fund. Funds are withdrawn as needed to pay benefits to eligible claimants, in accordance with state laws. The Federal Unemployment Tax is levied on employers to pay the cost of administering the UI program.
The IRCA requires that employers obtain and review certain documents that establish new employees' identities and document their eligibility to work in the U.S.
Form I-9 (Employment Eligibility Verification). INS's Form I-9 is completed to evidence the employer's review of documents. One acceptable document is a Social Security card.
Aliens authorized to work in the U.S. are eligible for UI benefits, provided other state requirements applicable to all claimants are met. Applicants must declare, in writing, whether or not they are U.S. citizens, nationals, or aliens. The IRCA also requires verification of immigration status of aliens who apply for benefits under certain Federally-funded programs, including unemployment compensation. Thus, the SESAs must verify that aliens have a legal work status when they apply for UI benefits.
Aliens must provide UI claim takers with their Alien Registration Numbers or other evidence of current immigration status. Each Alien Registration Number is unique and is issued to only one person.
The SAVE Program - The IRCA also mandates that certain agencies which administer Federally-funded programs use the SAVE program to verify the status of aliens at the time they apply for benefits. SAVE is maintained by an INS contractor and relies upon data in the INS Alien Status Verification Index (ASVI). SAVE is used for initial verification of the documentation supplied by aliens. Claim takers enter data on aliens who apply for UI benefits into the SAVE for verification. This automated process is known as "primary verification."
The SESAs are required to complete "secondary verification" when directed by a message during the automated comparisons done during primary verification or if the claim taker's review of an alien's documentation indicates a material discrepancy. Secondary verification is a more extensive validation procedure. Under this process, the SESAs must submit all available information on the alien to the INS for manual review and comparison with information in its files. From the data, INS makes a decision regarding the claimant's immigration status.
Our audit was conducted in accordance with Government Auditing Standards issued by the Comptroller General of the United States. We conducted a limited scope audit and did not design our samples and related audit procedures to project the results statistically.
Using data supplied by the SSA, we identified the population of claimants who received benefits while using unissued or deceased persons' SSNs. We selected samples from this population and completed a review of files maintained by the SESAs, as well as claimant interviews, to determine eligibility for unemployment benefits. We also reviewed the SESAs' procedures and controls for preventing payments to ineligible claimants. A more detailed discussion of our procedures, titled "Approach Used to Determine Invalid UI Claims," is included in Exhibit 1 of this report.
We began our survey work in Florida in February 1996, in conjunction with a fictitious employer case initiated by our OI. Fieldwork involving this audit began in July 1996 and continued through July 1997. We issued a "Statement of Tentative Findings" to each state and considered their responses in preparing this report.
Although the IRCA requires the SESAs use an INS program (SAVE) to check the validity of documentation provided by aliens who apply for UI benefits, its effectiveness is limited. We found that screening UI claimants' SSNs was an effective means of identifying illegal aliens who had filed for UI benefits. If coupled with existing INS screening, validation of SSNs would prevent many of the abuses that now occur.
UI claimants are required to declare whether they are U.S. citizens or aliens, at the time they apply for benefits. Claimants who indicate they are aliens must provide the SESA with documentation of their status.
The SAVE program allows the SESAs to query information maintained in INS data bases and determine if documentation supplied by alien UI claimants is genuine. However, if a claimant states that he or she is a U.S. citizen, the SESAs must accept the claimant's declaration. Consequently, aliens who declare themselves citizens avoid INS screening through the SAVE program.
Even when questionable documentation is detected, an alien may receive UI benefits for extended periods of time. The IRCA mandates "presumptive eligibility." Section 121(a)(4) of the IRCA provides an alien must be paid benefits until the INS determines he or she is in the country illegally:
(ii) may not delay, deny, reduce, or terminate the individual's eligibility for benefits under the program on the basis of the individual's immigration status until such a reasonable opportunity has been provided; and
(ii) pending such verification, the State may not delay, deny, reduce or terminate the individual's eligibility for benefits under the program on the basis of the individual's immigration status, and
(iii) the State shall not be liable for the consequences of any action, delay, or failure of the Service to conduct such verification. . . .
We also found problems with administration of the SAVE system. In some circumstances, illegal aliens were paid benefits under additional claims over a period of years and the aliens' documents were not identified as counterfeit until the most recent claims were filed. The SESAs established overpayments on only the most recent claim.
In reviewing UI claims, we identified hundreds of instances in which
multiple claimants used the same alien registration numbers to obtain UI
benefits. The claims are suspect because the INS assigns a unique registration
number to each alien.
Review of UI claim files in the states we visited indicates that validation of claimants' SSNs is an effective tool in identifying illegal aliens and preventing them from receiving UI benefits.
We developed a computer program and applied it to the four states' UI
claim files.2 The program enabled us to identify
UI claims with associated SSNs that had not been issued at the time individuals
had filed for UI benefits. We limited our review to UI claims that had
been paid.3
|
||
STATE | NUMBER OF CLAIMS | BENEFITS PAID |
Florida | 289 | $515,268 |
North Carolina | 1,635 | $719,433 |
Georgia | 170 | $165,447 |
Texas | 248 | $652,632 |
Total | 2,342 | $2,052,780 |
3 The files are composed of all claims filed, although many were not paid because claimants were found ineligible before they were paid benefits. Appendix B contains data on the incidence of unissued SSNs identified in the employer wage history files of each state we visited.
We selected a judgmental sample of 452 of the 2,342 claims, and were
able to reach conclusions regarding claimants' legal status on 241 of the
452 sampled claims. Overall, we found that 54 percent (129 of 241) of the
claimants whose status was confirmed were illegal aliens and that they
had improperly received UI benefits totaling $200,291. Our conclusions
were based upon a review of the claims files and followup procedures. (See
Exhibit 2.)
The
use of SSNs to identify discrepancies may have the added advantage of allowing
states to resolve discrepancies before UI benefits are paid claimants.
In contrast to the IRCA's provisions for aliens claiming a satisfactory
immigration status, we are not aware of any legal prohibition that would
prevent states from requiring claimants to provide valid SSNs before UI
benefits were paid. In fact, the Deficit Reduction Act of 1984 amended
the Social Security Act at 42 U.S.C., Section 1320b-7, as implemented
in the Department's regulations at 20 CFR 603.3, to provide a basis for
using SSNs to validate claimants' eligibility for benefits:
(b) If the state agency determines that a claimant has refused or failed to provide a Social Security Number, then that individual shall be ineligible to participate in the unemployment compensation program.
Many states either have adopted or are adopting new procedures that streamline the UI claims-taking process. The initiatives are being encouraged by ETA as ways to speed claims processing and cut administrative costs, by reducing the need for direct contact with claimants and intervention by SESA personnel.
The objectives of these new initiatives are laudable. However, claims
processing procedures that reduce claimant contacts contribute to larger
numbers of illegal aliens receiving UI benefits. States using such procedures
have an increased need for more effective claims screening methods.
For example, North Carolina's "partial claims" process requires employers, rather than employees, to initiate UI claims. A partial claim results when an employee is temporarily laid off and works less than 3 days during the week. Layoffs that do not last more than 4 weeks are considered temporary. North Carolina does not require these claimants to apply for UI benefits or attest to their citizenship. Instead, employers' payroll information is used to determine eligibility and the amount of benefits to be paid. Hence, workers who are temporarily laid off do not complete the more traditional procedure of visiting a local Job Service office. Rather, the employer is instructed to send employees who are not U.S. citizens to the nearest Job Service office for additional screening. We found this seldom happened.4
We found North Carolina had the highest number of claimants and the largest amount of benefits paid to claimants using unissued SSNs of any state in our review. (See page 9.) Of
We believe these improper claims would have been detected if claimants'
SSNs had been validated before benefits were paid. The data suggests that
verification procedures need to be strengthened in North Carolina and other
states that operate similar systems.
We share similar concerns for states that operate systems, such as telephone processing of claims, that reduce face-to-face contacts with claimants. One state we visited has recognized the need for new safeguards because of changes in its procedures. The initiatives promise both greater efficiency and better protection.
Texas recently redesigned its UI benefit payment system and is implementing telephone filing of claims. Texas is also implementing a system to verify new claimants' SSNs, and hopes to have the system operational within the next 3 months. Texas will use SSA's Enumeration Verification System (EVS) to verify that UI claimants are using their correct SSNs. Agencies that pay benefits can use this system to verify that individuals who apply for benefits are using their assigned SSNs. Selected information on all new claimants will be sent to the Texas Department of Human Resources for EVS validation. The EVS will provide automated matching of claimants' names, dates of birth and gender codes with information for corresponding SSNs on SSA's files. Exceptions will be screened by UI personnel prior to benefit payments.
The SSN verification system Texas is implementing will be more comprehensive and effective than our computer program. Our program only identified SSNs in ranges that have not been issued, because of Federal privacy restrictions we faced in obtaining SSA data. However, states have the capability of matching individual names and birth dates with SSNs because the data is available to certain governmental agencies that pay benefits.
Had the SSN verification system been in place, all the exceptions we found in our review could have been detected before states began benefit payments. Verification of SSNs would complement the SAVE validation system, rather than duplicate it. As previously discussed, claimants declaring themselves to be U.S. citizens are not screened for immigration legal status. Up-front verification of SSNs and identification of irregularities might also be a basis
Prevention of improper payments promises to be far more cost-efficient
and effective than detection and recovery after the claim has been paid.
Such after-the-fact efforts require expensive administrative procedures
to contact claimants, establish and adjudicate overpayments and attempt
recovery, often with little or no success.
Although some problems were noted in administration of the SAVE system, the states we visited generally did a creditable job of using the time-consuming and sometimes cumbersome process. However, procedures for controlling illegal aliens now available to the SESAs are somewhat reactive, as they often do not identify illegal aliens until after benefit payments have commenced. We believe a proactive approach that requires claimants to have valid SSNs prior to payment of benefits better ensures that benefits are paid only to eligible claimants.
We are not aware of any legal prohibition that would prevent states from requiring all claimants to have valid SSNs before benefits are paid. In fact, the Deficit Reduction Act of 1984 amended the Social Security Act at 42 U.S.C., Section 1320b-7, to prescribe that states shall require all applicants for benefits under certain programs, including unemployment compensation, to furnish their SSNs, and that the SSNs be used in the administration of the programs. We believe prudent program administration would include verifying that benefit recipients are using their assigned SSNs.
The cost of abuses must be weighed against the cost of designing and implementing new controls to counter abuses. While such a cost/benefit analysis was beyond the scope of this audit, validation of all new claimants' SSNs would detect many illegal aliens who escape the SAVE system's scrutiny. SSNs of all new claimants can be validated with the SSA prior to payment of benefits. SSA's EVS is designed for this purpose. Texas is currently working to establish this system, and hopes to have it operational within the next 3 months. This system might be used as a model for other states. Verification of claimants' SSNs might also have other useful applications, such as identification of fictitious employer schemes.
Verification of claimants' SSNs prior to payment of unemployment benefits is a means by which many improper payments to illegal aliens can be prevented. Prevention of improper payments rather than after-the-fact detection and recovery would contribute to more efficient UI claims administration. Therefore, we recommend the Assistant Secretary for Employment and Training:
assist the states in developing and implementing means of screening UI claimants for valid SSNs;
seek legislative changes to the IRCA's provisions that would allow states to resolve differences prior to payment of benefits, in instances where the SAVE system's primary verification procedures indicate a material discrepancy;
ensure that states establish procedures to delay or defer paying benefits to individuals without valid SSNs; and
ensure that Florida, Georgia, North Carolina and Texas investigate and
establish overpayments, where appropriate, on claims we concluded were
paid to illegal aliens.
ETA responded to our draft report on January 7, 1998, the full text of which is included as Appendix C to this report. ETA welcomes OIG's concern for the integrity of the UI program, and believes that significant improvements could be realized in areas that our audit addressed.
In conjunction with other Federal agencies, ETA indicates it is exploring the feasibility of developing a system to be used with the National Directory of New Hires. Such a system would provide feedback to employers regarding SSNs to improve the accuracy of reporting. ETA is also discussing another initiative with the SSA that could provide on-line verification of SSNs by the SESAs.
ETA has determined that legislative changes are not necessary to address the problem of paying benefits to alien claimants with material SAVE system discrepancies. A UI directive is being prepared that would deny payments to alien claimants without reasonable evidence of
ETA disagreed with our recommendation that benefits should not be paid
to individuals without valid SSNs. According to ETA, the burden of policing
the social security system does not reside with the SESAs. ETA believes
that the directive will enable SESAs to deny or delay payments to illegal
alien claimants. ETA will distribute the OIG report and study the initiatives
to determine if a more comprehensive approach would be effective. ETA agreed
with our recommendation that the four states we audited should investigate
and establish overpayments where appropriate.
We are encouraged by and support ETA's initiatives to assist SESAs in developing means to validate claimants' SSNs. On-line verification of SSNs would be especially timely and efficient, allowing immediate feedback and querying of claimants for additional information and explanation of SSN discrepancies. Using the National Directory of New Hires to inform employers of SSN discrepancies would also be a good tool to improve the accuracy of wage reports, and ultimately, UI claims. We emphasize that verification of claimants' SSNs is especially important for telephone claims, and partial claims in states with procedures similar to North Carolina where employers submit information to generate claims.
We reviewed the UI directive ETA is issuing and voiced our concerns that illegal aliens with invalid SSNs could be paid benefits if they provided fraudulent documentation that appeared to be "reasonable evidence." We continue to recommend that legislative authority be sought to delay benefits whenever the SAVE system primary verification show major discrepancies.
We are disappointed with ETA's position regarding our recommendation that payments be delayed or deferred for those individuals using invalid SSNs. We agree that SESAs should not be burdened with policing the social security system. However, verifying that each UI claimant is using his or her assigned SSN is not policing the social security system. SSN verification helps to ensure the integrity of the UI system by preventing illegal aliens and other ineligible persons from using false identification to receive benefits. SSN verification also enables SESAs to comply with the Deficit Reduction Act of 1984 which requires that UI claimants provide their SSNs in order to receive benefits. We continue to recommend that benefits be delayed or deferred to individuals without valid SSNs.
We met with staff of the USDOL, UIS, to determine their policies, positions, and guidelines regarding verifying claimants' legal status and eligibility for benefits. We also conferred with the INS to determine methodologies and procedures for validation of aliens' legal status. The SSA assisted us in determining methodologies to identify unissued SSNs. Finally, the SSA's OIG helped us determine the accuracy of our computer program that identified unissued SSNs.
We contacted the SSA to identify claimants using invalid SSNs, including SSNs assigned to other persons. Because of Federal matching restrictions, SSA was unable to provide this information to us. However, SSA does disseminate information on ranges of currently issued SSNs. This information is available to the general public on the SSA computer bulletin board and updated monthly. According to SSA, this information is used by financial institutions and credit reporting bureaus to authenticate the legitimacy of individuals applying for certain financial services, such as opening a bank checking account.
Using the current ranges of valid issued SSNs, we developed a computer edit program to identify "High-Group" SSNs which had not been issued at the time a UI claim was filed. The range we analyzed consisted of the first five digits of the SSNs. The first three digits of the SSN denote the state where the SSN application was filed. The middle two digits denote the group number within the State. The last four digits comprise the serial number. Our edit program is unable to identify individuals using another person's SSN, a deceased person's SSN, or unissued SSNs within ranges currently being issued.
The SSA provided us with a file of deceased persons' SSNs which we compared with the four states' UI claim files. The comparison is discussed in Appendix A of this report.
UI Claims Review. We selected a judgmental sample of 452 claims (19 percent) from among the 2,342 claims with invalid SSNs.5 Our sample of 452 consisted of:
We concluded that at least 80 illegal aliens using unissued SSNs had
improperly received benefits of $139,570. Our conclusions were based on
INS' SAVE information that showed many claimants were using other aliens'
registration numbers or counterfeit identification.
6 Each claimant is asked to identify his or her status as a citizen or alien. No further verification is completed on those that state they are U.S. citizens. Those claimants who state they are not U.S. citizens are asked to provide Alien Registration Numbers. The alien numbers and other data are entered into the SAVE system to validate the aliens' immigration status.
In other instances, we found no evidence that secondary verification had been performed, although it was required because of discrepancies identified through primary verification procedures. Therefore, discrepancies on several claims were not resolved by the states and the benefits were paid.
We also found instances where illegal aliens had previously filed claims and received benefits. However, the states had established an overpayment only on the current claim.
Documentation submitted by the claimant was counterfeit, in all instances we reviewed, where the primary verification identified a material discrepancy in the claimant's name or birth date and secondary verification was completed.
Claimant Followup. From the 452 claimants in our sample, we judgmentally selected 136 claimants for followup. Claims selected were the most recent and the most material. The purpose of the followup was to determine if the claimants were U.S. citizens or legal aliens, and thus eligible for unemployment compensation benefits.
In a joint effort with the states' benefit payment control units, we interviewed as many of the claimants as we could locate and who were willing to talk with us. In some instances, where we were unable to interview the claimant, information was obtained from employers and interviews with relatives and neighbors. We concluded from our followup that 49 of 84 claimants were illegal aliens and had received benefits of $60,721. The results of our followup sample, in each state, are shown in the following table.
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State |
Unemployment Insurance Claimants |
Benefits Paid
|
|||
Selected
for Followup |
Evidence
Sufficient for Determination |
Number of
Determinations Found Illegal |
Percent of Determinations Found Illegal | ||
Florida | 31 | 17 | 13 | 76% | $ 8,563 |
Georgia | 27 | 17 | 1 | 6% | 615 |
North Carolina | 49 | 32 | 30 | 94% | 36,018 |
Texas | 29 | 18 | 5 | 28% | 15,525 |
Totals | 136 | 84 | 49 | 58% | $60,721 |
Only 11 of the 49 claimants who we concluded were in the U.S. illegally
acknowledged being an alien when they filed an unemployment claim. The
SAVE system primary and secondary verifications are performed only when
the claimant declares himself to be an alien. Thus, illegal aliens can
avoid scrutiny by simply saying they are U.S. citizens. Under current legal
interpretations, UI claim takers cannot pursue verification of U.S. citizenship
whenever claimants declare themselves to be U.S. citizens even if claim
takers have concerns. Legal restrictions make the UI system vulnerable
to paying benefits to ineligible individuals. Consequently, alternative
procedures should be used, such as verifying the legitimacy of claimants'
SSNs, to curtail improper benefit payments.
Overall, the states had already established overpayments of $41,306
on 44 of the claimants whom we concluded were illegal. Some of the overpayments
were established for other reasons, such as failure to report earnings.
We obtained the SSA Death Master File of approximately 53 million records
and compared the SSNs of deceased persons with SSNs on the four states'
UI claim files. Our criterion was to identify UI claims filed using deceased
persons' SSNs after their reported date of death. We further limited our
review to only those claims that resulted in benefits being paid. Many
claims are never paid because claimants are found ineligible for various
reasons, such as inadequate base period earnings. We identified 585 claims
filed under deceased persons' SSNs with $1,153,895 benefits paid as shown
in the following table.
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STATE | NUMBER OF CLAIMS | BENEFITS PAID |
Florida | 152 | $322,332 |
North Carolina | 162 | $126,574 |
Georgia | 99 | $146,276 |
Texas | 172 | $558,713 |
Total | 585 | $1,153,895 |
Only in North Carolina did the State's BPC Unit detect a significant problem with claimants using deceased persons' SSNs. North Carolina found that 6 (43 percent) of the 14 sampled claimants were illegal aliens, and that overpayments totaling $4,922 should be established.
In many instances, the Georgia and Texas BPC units found that the SSN exceptions occurred due to administrative errors by SSA, or claimants unknowingly using wrong SSNs. However, Georgia is investigating an instance where it appears that a claimant received benefits under a deceased person's SSN while working under a different SSN. We provided the death file listings to the state BPC units for further review as they deemed appropriate. The death file match may be appropriate for use by states with partial claims processing methods similar to that used by North Carolina.
The SSA EVS match would have detected the North Carolina illegal aliens using deceased persons' SSNs, because the names on the two files would not match. However, if the illegal aliens had assumed the deceased persons' names, EVS would not detect the discrepancy.
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|
|
|
Florida | 12.5 | 143,000 |
Georgia | 7.6 | 157,000 |
North Carolina | 6.6 | 73,000 |
Texas | 15.0 | 263,000 |
Total | 41.7 | 636,000 |
Many of these exceptions are undoubtedly caused by inadvertent administrative
errors and other legitimate reasons. Workers using unissued SSNs are not
of immediate concern of SESAs, and may more appropriately relate to enforcement
of immigration laws. Also, only a small percentage of employees ever file
unemployment claims. However, from this pool of SSN exceptions, many UI
claims will be filed eventually by illegal aliens.