Social Security Representative Payee Audit Checklist

Representative payees are individuals authorized by law to manage Social Security and SSI payments on behalf of beneficiaries. SSA monitors these representatives through regular audits and other activities.

All payees must maintain records that demonstrate how they spent or saved the funds received for their clients, with individual accounts for each beneficiary and using an effective system that makes information easily understandable.

1. Review the Beneficiary’s Financial Statements
SSA requires that you keep accurate records and report on how you spent and saved each beneficiary’s money, the ideal method being direct deposit into their bank account – safe, economical, convenient and providing a permanent record.

Nearly eight million recipients of Social Security and SSI benefits require assistance managing their funds. When we determine that an individual cannot manage their own finances independently, we select a representative payee on their behalf – in most cases family members take precedence but community sources and organizations may also provide help for some individuals who do not qualify.

Collective accounts may be opened, with individual beneficiaries having a clear ownership stake in each. When you no longer serve as payee or they pass away, any funds saved must be returned to SSA immediately.

2. Review the Beneficiary’s Accounting Ledger
SSA monitors the activities of organizational Rep Payees by conducting on-site reviews at participating State institutions and reviewing their accounting records. In addition, all Rep Payees must save their records for two years so that they are available for inspection upon request.

SSA assigns Rep Payees for people deemed incapable of managing their money due to age or physical or mental impairment. No Rep Payee should be selected based on convenience or personal preferences; if a beneficiary shows signs of improvement and could handle their own finances more freely themselves, notify SSA immediately and submit an annual accounting report detailing the dispersal of Social Security and SSI funds received for each beneficiary on your behalf.

3. Review the Beneficiary’s Bank Accounts
SSA will review your accounting records to make sure that our funds are being spent and saved efficiently for each beneficiary. Our examination includes:

As representative payee, we recommend opening individual savings or checking accounts for each beneficiary you serve as representative payee for. We refer to these collective accounts as fiduciary accounts and we require them to accurately reflect deposits, withdrawals, expenditures and interest earned for each of their beneficiaries.

Representative Payees are appointed by us to manage the funds of Social Security and SSI beneficiaries who are incapable of managing their own finances. You should use funds allocated to you to meet current needs while saving any excess for future purposes.

4. Review the Beneficiary’s Investment Accounts
Many recipients of Social Security benefits require someone else to manage their finances for them and require individual or organizational payees as more Baby Boomers near retirement age. We have seen an increased need for payees.

To protect against fraud, we require all Social Security Administration-approved payees to account for how beneficiary funds have been utilized. We conduct on-site reviews of individual and organizational payees. Furthermore, we interview beneficiaries, third parties, and representatives.

When using collective accounts, make sure the names clearly depict each beneficiary’s share and that fees are separated from the overall account balance. Avoid mixing funds and set clear procedures for recording deposits, withdrawals and interest earned for each beneficiary – these records must be available upon request from SSA and/or their beneficiary.

5. Review the Beneficiary’s Other Financial Accounts
As beneficiaries can have various financial accounts such as savings, checking and investment accounts in their names, it is vital for a payee to maintain accurate records regarding these accounts and use only enough of their funds to meet beneficiary needs. Furthermore, fees or any commingling should be avoided in any form.

More than 8 million Social Security and SSI beneficiaries require assistance managing their finances as they cannot do it themselves. To meet this need, Social Security Administration selects individuals or organizations as representative payees who use any money received to meet current maintenance costs while saving any excess for future needs of beneficiaries. When no longer serving as representative payee, conserved balances as well as any cash holdings must be returned back to Social Security Administration.