Millions of federal, state dollars go to dead Americans each month, audits show

April 26, 1991|By Gregory Spears | Gregory Spears,Knight-Ridder News Service

WASHINGTON -- You may not be able to take it with you, but that doesn't stop the federal government from sending millions of dollars a month to dead Americans, according to recent federal audits.

A computerized match-up of death records and benefit paymentsfound that 5,935 dead Americans were sent $4.3 million in one month by the Defense Department, the Labor Department, the Railroad Retirement Board and the Office of Personnel Management.

And it's not just the federal government's problem.

A separate General Accounting Office study, matching death data against welfare rolls in Maryland,Pennsylvania and the District of Columbia, turned up 3,000 state payments to dead people in a two-year period. The GAO didn't compute the cost of the erroneous payments, GAO auditor Bob Rosensteel said, because "state records are so messed up."

The GAO audit did not determine how much federal money was actually lost. But it said checks wrongly sent to dead people frequently cleared the bank because many beneficiaries had arranged for direct deposit before they died or people fraudulently forged their signatures.

In a sample of 156 cases involving the Defense and Labor departments, the railroad board and the Office of Personnel Management, the benefit payments did not stop in 70percent of the cases for one to six years after the death of the beneficiary, said the GAO, Congress' investigative arm.

"Several federal agencies erroneously pay millions of dollars to deceased beneficiaries because they lack a timely, effective way to detect unreported deaths and curtail payments," the GAO concluded in a report sent to Capitol Hill in February.

The Social Security Administration already collects death information from the states, which are required by law to record death certificates. But the information is not widely shared, nor is it used quickly enough to weed out the dead from benefit rolls, according to the GAO.

Social Security says it cannot share most of its death data withother agencies because 30 states won't allow it. The states can make money by selling the same information to others. Social Security pays states 21 cents a name and expects to spend $500,000 this year for 2.4 million death certificates.

At the GAO's urging, the House Ways and Means Committee has assembled a working group to study the issue and decide how Social Security's Master Death File, as it is called, could be shared quickly with all branches of government, a congressional staff member said yesterday.

But to a watchdog citizens group, the solution seems obvious. "This doesn't seem to be a very difficult problem to solve. It's just simply a question of the right hand knowingwhat the left hand is doing," said Bill Pierce, spokesman for the non-profit National Taxpayers Union, a 200,000-member organization in Washington.

The money can usually be recovered if the government discovers its mistake quickly. But Mr. Rosensteel, the GAO auditor, said, "When it gets over about a year old, the likelihood of Uncle Sam collecting is very small."

Sixty percent of the time, the erroneous payments to an individual exceed $10,000, according to a sampling of the cases uncovered by the GAO.

Another GAO study uncovered an additional $475,000 in payments by the Department of Veterans Affairs to 1,212 dead people.

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