SSA trust fund reimbursement may be at risk due to outdated systems, audit says

System for assessing SSA reimbursements for administrative support needs to be updated

The Social Security Administration’s system for assessing the administrative costs of the four trust funds it oversees could be risking errors because it has not been updated, according to a new audit.

The SSA provides support for trust funds covering insurance for retirement and survivors, disability insurance, and Medicare Parts A and B. The Cost Analysis System began operating in 1976 to estimate reimbursements due from each trust fund to cover SSA’s administrative costs.

Although the cost analysis system has been operating on stable, legacy information systems and most customers indicate they are satisfied, there are potential vulnerabilities and gaps that should be fixed, according to the April 20 audit by Grant Thornton LLP.

The cost methodology has not been updated to reflect changes in business processes, system technology, federal accounting standards or increased complexity in the workloads.

Related stories:

SSA exposed SSNs, names and birth dates for 36,000 people

OIG: SSA needs better oversight of VoIP

For example, the current cost allocation methods may not be fully accounting for costs at field offices and program services centers that handle disability determinations, the report said.

Also, the SSA may be putting its continuity of operations at risk because of “incomplete, outdated and/or unclear Cost Analysis System documentation and insufficient workforce planning,” the report said.

In addition, the SSA has not implemented changes to the cost allocation methodology that were recommended in 1997 based on recommendations from Pricewaterhouse Coopers LLP, the report added. Although some modernization of the cost analysis information system is underway, with a current plan to fully replace the mainframe with an Oracle-based system by 2013, those improvements do not address the recommendations of the Pricewaterhouse study, the audit stated.

The audit concluded that the cost analysis method needs to be improved to remain operating satisfactorily. “We concluded that the SSA Cost Analysis System is viable for calculating administrative costs if the risks identified during this audit are addressed,” the audit stated.

Grant Thornton recommended updates to the cost allocation methodology along with the administrative instructions manual. The audit also said the cost analysis methodology needs to be clearly documented, and a staffing plan needs to be developed to ensure continuity of operations and protect against loss of knowledge through attrition.

SSA officials did not comment on the report, saying that they were awaiting the results of additional audits being performed on the trust fund cost reimbursement methodologies.


About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.


  • Defense
    Ryan D. McCarthy being sworn in as Army Secretary Oct. 10, 2019. (Photo credit: Sgt. Dana Clarke/U.S. Army)

    Army wants to spend nearly $1B on cloud, data by 2025

    Army Secretary Ryan McCarthy said lack of funding or a potential delay in the JEDI cloud bid "strikes to the heart of our concern."

  • Congress
    Rep. Jim Langevin (D-R.I.) at the Hack the Capitol conference Sept. 20, 2018

    Jim Langevin's view from the Hill

    As chairman of of the Intelligence and Emerging Threats and Capabilities subcommittee of the House Armed Services Committe and a member of the House Homeland Security Committee, Rhode Island Democrat Jim Langevin is one of the most influential voices on cybersecurity in Congress.

Stay Connected


Sign up for our newsletter.

I agree to this site's Privacy Policy.