1. The Importance of Accounting at the Social Security Administration
Peter D. Spencer
Deputy Commissioner for Budget, Finance, Quality, and Management
Chief Financial Officer
November 19, 2014

2. Presentation Objectives
Provide an overview of the agency and BFQM
Discuss how our operations tie into accounting
Review major challenges we face as accountants
Discuss initiatives to address challenges
Look into the future of Social Security

3. About the Social Security Administration
Social Security touches the lives of virtually every American, as our programs provide a safety net for millions of people:
In FY 2014, we paid over 63 million Americans $894 billion in benefits
We issued 16 million new and replacement cards
We handled more than 37 million calls on our 800 Number
We assisted over 40 million visitors to our field offices
Received 5 million applications for benefits
I know many of you here are from SSA, but I would like to give an overview of our agency to those who aren’t from SSA, or those who may be new to the agency.
[You may want to do a show of hands “Who is from SSA?”]
Social Security touches the lives of virtually every American – we administer programs that make up the largest social insurance system in the world:
In FY 2014, we paid over 63 million Americans $894 billion in benefits
We issued 16 million new and replacement cards
We handled more than 37 million calls on our 800 Number
We assisted over 40 million visitors to our field offices
Received 5 million applications for benefits

4. About the Social Security Administration
We need a vast network of facilities, technology, and skilled staff to serve the public:
The agency is led by Acting Commissioner Carolyn Colvin, who reports directly to the President
82,000 Federal and State employees
Nationwide network of 1,400 offices
International offices in hundreds of countries
Work with 54 States to make disability determinations

5. Budget, Finance, Quality, & Management
Budget policy, formulation, and execution
Accounting policy and operations
Acquisition and grants programs
Forms, publications, and printing program
Facilities and supply management
Environmental health and safety programs
Quality reviews and improvement
Security and emergency preparedness

6. Budget Information
On a given day, SSA is working on three fiscal years of budgets simultaneously
Our budgets are performanced-based/workload driven
Our budget and accounting processes are very closely linked
Information from accounting system is used as a baseline to develop following year’s budget

7. SSA’s Budget Account Structure
Program Budget
Covers benefit payments to individuals
Mandatory portion of the Federal budget
Administrative Budget
Covers the cost of accomplishing our mission
Discretionary spending
Must compete for scarce resources with other agencies

8. SSA’s Administrative Budget
In FY 2015, our administrative budget is expected to be 1.3% of benefit payments – a remarkable achievement!
Administrative Budget
$ Billion
SSA Program Budget
$947 Billion

9. Importance of Accounting
The Government is accountable for the use of its resources
Providing our financial report to our stakeholders enables them to:
Assess our accountability and stewardship of public resources
Determine whether our services improved or declined from the previous year
Evaluate whether we provided services efficiently and effectively
Financial information enables Congress and Government Managers to make political, social, and economic decisions
We use financial information as a tool to demonstrate funding needs to Congress for specific workloads

10. SSA’s Complex Accounting System
SSA has a unique accounting structure compared to other agencies:
General fund for Supplemental Security Income (SSI)
Trust funds for Social Security and Disability Insurance
Administrative expenses
Initially charged to one fund
Must allocate portions of administrative expenses to proper fund
Funded by the general fund and the OASI, DI, HI, and SMI trust funds

11. Accounting Cycle The accounting cycle covers:
Budgeting – Tracks authorized spending of public resources
Cost analysis – Determines the cost of producing public services
Performance measures– Link between outputs and outcomes, which provides a complete picture of how we are using our resources
Financial Accounting - Recording consequences of actual transactions and events
We report the outcome of these transactions and events in our Agency Financial Report

12. Transactions and Events
Some examples of transactions and events that affect our financial reports:
Benefit payments
Benefits due and payable
Payroll
Supplies and equipment
Leasing office space
Building maintenance
Security measures in field offices

13. Agency Financial Report
Provides information to the President, Congress, and the public to assess our stewardship over the financial resources entrusted to us
Includes annual audited financial statements required by the Chief Financial Officers Act and satisfies several other legislative reporting requirements:
the Federal Managers’ Financial Integrity Act management’s assurance
the Debt Collection Improvement Act
the Improper Payments reporting
Also includes performance discussion, auditor’s opinion and IG’s major management challenges
Available at

14. Agency Financial Report
Producing the report is a team effort
FY 2014 marks the 28th year that we published audited financial statements
21st year we received a clean audit opinion
Hoping to receive our 17th consecutive CEAR Award

15. Enhancing Financial Information
Social Security Online Accounting and Reporting System (SSOARS)
SSOARS Financial Information System Upgrade
Social Security Electronic Remittance System (SERS)
Improved Administrative Payments Technology

16. Numbers are Important But They Don’t Tell The Whole Story

17. Challenges we Face – Keep CFO Out of Trouble!

18. Challenges We Face – Audit Process
Financial Statement Audit
Constant communication with auditors
Address issues early in the process
Evolving compliance standards
Stay on top of emerging guidance
Active in shaping accounting requirements
Managing Multiple Audits
OIG, GAO, and Financial Management System Reviews
Stay involved from start to finish

19. Challenges We Face – Risk
Information Technology Risks
Maintain secure and reliable IT services
Address significant deficiency in information controls identified by auditors
Risk-Based Corrective Action Plans
Improper Payments Risk Assessment
Improper Payments Governance Board
Risk of beneficiaries receiving incorrect payments
Review of administrative payments
Reputation Risk

20. Challenges We Face – Data Quality
We must make data-driven decisions
Ensure reliable, accurate, and consistent data
Collaborate throughout agency
Comply with Open Government Initiatives
Office of Open Government
SAO for Federal Spending
Validate data on USASpending.gov with financial information

21. Challenges We Face – Benchmarking
President’s Management Agenda (PMA) Initiative
Establishes cost, quality and performance metrics for mission support functions
Acquisition
Financial Management
Real Property
Working with OMB and GSA on metrics
Agency missions and needs are different, so difficult to measure across the board

22. Challenges We Face – Fraud
Zero tolerance for fraud
Fraud is increasing
85 anti-fraud initiatives
Centralized anti-fraud unit
“To be the driving force behind the Social Security Administration’s anti-fraud efforts by sponsoring new initiatives, supporting component anti-fraud efforts, and ensuring agency vigilance at preventing, detecting, and investigating fraud.”
National Anti-Fraud Committee

23. National Anti Fraud Committee
NAFC was reestablished to oversee agency’s efforts and milestones in anti-fraud initiatives
The Inspector General O'Carroll and I co-chair
We report our progress on initiatives to Ways and Means Subcommittee on Social Security
NAFC conference held September 2014

24. National Anti Fraud Committee
Anti-Fraud initiatives include:
Increasing continuing disability reviews
Expand Cooperative Disability Units
Data analytics
Anti-Fraud training
NAFC conference September 2014
Anti-Fraud suggestions mailbox

25. Look into the Future More on-line services my Social Security
Vision 2025
Continue to operate with limited resources

26. Questions?