December 4, 2021

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Social Security and Medicare: Improving the Timeliness of Trust Fund Reports

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<div>What GAO Found Treasury took some steps to improve its management of the schedule for developing the Social Security and Medicare Trustees reports but the boards of trustees did not meet the statutory deadline of April 1 for the reports due in 2020 and 2021. In 2019, GAO issued two recommendations to try to improve the timeliness of the reports. Consistent with GAO's first recommendation in 2019, Treasury developed schedules for preparing the annual reports that included the planned and actual dates for meeting intermediate goals and the statutory deadline of April 1. Other than tracking the planned and actual dates of each reporting cycle, however, Treasury has not told GAO about any other steps it took to better manage the schedule, as GAO recommended. Therefore the recommendation has not been fully implemented. GAO also recommended that Treasury inform Congress of reporting delays. Treasury reported that the working group—agency officials involved in the preparation of the reports— established a policy in December 2020 to notify Congress if the trustees anticipate issuing the reports after the April 1 statutory deadline. The policy states that the chairperson will "assess the need to notify Congress of the reports' timing." The policy does not specify how they would make that assessment, nor does it mention including the reasons for the delay. A Treasury official stated that they did not interpret our recommendation to mean that the policy itself had to address communicating the reasons for delayed reports—only that those reasons be included in the information communicated to Congress. This policy does not fully address GAO's recommendation because it implies that notifying Congress should be discretionary and does not call for any explanation of the delays and updated timeframes. The policy should serve as a prompt for subsequent working groups to provide timely updates and address all of the information we recommended communicating to Congress. There are potential actions Treasury, in consultation with the boards of trustees, could take to help address GAO's prior recommendations. For example, Treasury, in its role as chairperson of the boards, could prioritize meeting the statutory deadline, review progress in developing the reports, obtain buy-in on timeliness goals from key officials, learn from past reporting cycles, and strengthen the policy to inform Congress of delays. In addition, the boards of trustees could amend their bylaws to state explicitly the goal of meeting the April 1 statutory deadline, and require that Congress be informed of report issuance delays, the reasons for delays, and the updated issuance date estimates. Finally, if Congress does not believe sufficient progress has been made to address GAO's recommendations, it could codify GAO's 2019 recommendations to Treasury with explicit requirements for reporting and communication. In commenting on a draft of this report, Treasury emphasized the unique circumstance and challenge that the COVID-19 pandemic presented to completing the modeling underlying the Trustees reports. They explained that the working group made a deliberate decision to take additional time to prepare the reports in order to accurately incorporate the effects of the pandemic and that this was necessary in order to ensure a high-quality report. Why GAO Did This Study Boards of trustees manage the trust funds that largely provide funding for benefits paid under the Social Security and Medicare programs. The Social Security Act requires the trustees to report on the trust funds' financial status to Congress each year by April 1. In 2019, GAO reported that the trustees issued the reports after this statutory deadline in 17 of the 25 years from 1995 to 2019, and were more than 2 months late in 6 years from 2010 to 2019. GAO's report recommended two actions to the Secretary of the Treasury, in their capacity as the chairperson of the boards. The first recommendation was that Treasury work with the other trustees, in consultation with the chief actuaries of Social Security and the Center for Medicare & Medicaid Services, to improve the management of the report development schedules in order to provide the Trustees reports to Congress by the April 1 statutory deadline. The second recommended that Treasury work with other trustees to establish a policy to inform congressional committees of jurisdiction when the reports are expected to miss this deadline; we recommended that this outreach include the factors contributing to the delay and the updated expected dates. Treasury concurred with these recommendations. GAO was asked about additional actions to better ensure the timely issuance of the Trustees reports, including considering changes to the trustees' bylaws and Congressional action. This report (1) describes Treasury's progress in addressing GAO's 2019 recommendations, and (2) offers potential actions, consistent with GAO's recommendations, that could help ensure timely completion of the Trustees reports. GAO reviewed the 2019 report, relevant documentation from the reporting cycles for the 2020 and 2021 Trustees reports, and information Treasury provided about actions it has taken to implement GAO's recommendations from the 2019 report. For more information, contact Elizabeth Curda at (202) 512-7215 or curdae@gao.gov.</div>

What GAO Found

Treasury took some steps to improve its management of the schedule for developing the Social Security and Medicare Trustees reports but the boards of trustees did not meet the statutory deadline of April 1 for the reports due in 2020 and 2021. In 2019, GAO issued two recommendations to try to improve the timeliness of the reports. Consistent with GAO’s first recommendation in 2019, Treasury developed schedules for preparing the annual reports that included the planned and actual dates for meeting intermediate goals and the statutory deadline of April 1. Other than tracking the planned and actual dates of each reporting cycle, however, Treasury has not told GAO about any other steps it took to better manage the schedule, as GAO recommended. Therefore the recommendation has not been fully implemented.

GAO also recommended that Treasury inform Congress of reporting delays. Treasury reported that the working group—agency officials involved in the preparation of the reports— established a policy in December 2020 to notify Congress if the trustees anticipate issuing the reports after the April 1 statutory deadline. The policy states that the chairperson will “assess the need to notify Congress of the reports’ timing.” The policy does not specify how they would make that assessment, nor does it mention including the reasons for the delay. A Treasury official stated that they did not interpret our recommendation to mean that the policy itself had to address communicating the reasons for delayed reports—only that those reasons be included in the information communicated to Congress. This policy does not fully address GAO’s recommendation because it implies that notifying Congress should be discretionary and does not call for any explanation of the delays and updated timeframes. The policy should serve as a prompt for subsequent working groups to provide timely updates and address all of the information we recommended communicating to Congress.

There are potential actions Treasury, in consultation with the boards of trustees, could take to help address GAO’s prior recommendations. For example, Treasury, in its role as chairperson of the boards, could prioritize meeting the statutory deadline, review progress in developing the reports, obtain buy-in on timeliness goals from key officials, learn from past reporting cycles, and strengthen the policy to inform Congress of delays. In addition, the boards of trustees could amend their bylaws to state explicitly the goal of meeting the April 1 statutory deadline, and require that Congress be informed of report issuance delays, the reasons for delays, and the updated issuance date estimates. Finally, if Congress does not believe sufficient progress has been made to address GAO’s recommendations, it could codify GAO’s 2019 recommendations to Treasury with explicit requirements for reporting and communication.

In commenting on a draft of this report, Treasury emphasized the unique circumstance and challenge that the COVID-19 pandemic presented to completing the modeling underlying the Trustees reports. They explained that the working group made a deliberate decision to take additional time to prepare the reports in order to accurately incorporate the effects of the pandemic and that this was necessary in order to ensure a high-quality report.

Why GAO Did This Study

Boards of trustees manage the trust funds that largely provide funding for benefits paid under the Social Security and Medicare programs. The Social Security Act requires the trustees to report on the trust funds’ financial status to Congress each year by April 1. In 2019, GAO reported that the trustees issued the reports after this statutory deadline in 17 of the 25 years from 1995 to 2019, and were more than 2 months late in 6 years from 2010 to 2019. GAO’s report recommended two actions to the Secretary of the Treasury, in their capacity as the chairperson of the boards.

The first recommendation was that Treasury work with the other trustees, in consultation with the chief actuaries of Social Security and the Center for Medicare & Medicaid Services, to improve the management of the report development schedules in order to provide the Trustees reports to Congress by the April 1 statutory deadline. The second recommended that Treasury work with other trustees to establish a policy to inform congressional committees of jurisdiction when the reports are expected to miss this deadline; we recommended that this outreach include the factors contributing to the delay and the updated expected dates. Treasury concurred with these recommendations.

GAO was asked about additional actions to better ensure the timely issuance of the Trustees reports, including considering changes to the trustees’ bylaws and Congressional action. This report (1) describes Treasury’s progress in addressing GAO’s 2019 recommendations, and (2) offers potential actions, consistent with GAO’s recommendations, that could help ensure timely completion of the Trustees reports. GAO reviewed the 2019 report, relevant documentation from the reporting cycles for the 2020 and 2021 Trustees reports, and information Treasury provided about actions it has taken to implement GAO’s recommendations from the 2019 report.

For more information, contact Elizabeth Curda at (202) 512-7215 or curdae@gao.gov.

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