Social Security Announces Cost Cutting Initiative Following Audit

The SSA previously identified more than $800 million in cost savings for fiscal year 2025.

A woman stands outside a Social Security Administration building in Burbank, Calif., on Nov. 5, 2020. Valerie Macon/AFP via Getty Images

The Social Security Administration (SSA) on March 19 announced a plan to reduce costs and enhance security measures following stakeholder feedback and a recent audit by the Government Accountability Office (GAO).

The SSA said in a statement that a “phased approach will be adopted to reduce operating costs by up to approximately 40 percent going forward.”

The savings measure will focus on the Electronic Consent Based Social Security Number Verification (eCBSV) service, which will be streamlined for better “addressing the needs of customers, including the financial industry and various governmental bodies.”

Annual fees charged to participating entities related to the service will be reduced by approximately 25 percent, said the agency.

The eCBSV system is a fee-based social security number (SSN) verification service that allows establishments such as financial institutions to check whether the name, date of birth, and SSN provided by a person match the SSA’s records.

GAO published a report in September 2024 highlighting the agency’s failure to recover the costs of investments made in the service.

The Social Security Administration spent $62 million to develop eCBSV, with a 2018 law requiring that the agency recoup these costs from users, according to the report.

“However, low participation and other challenges have made it hard for SSA to recover costs—and SSA still needs to recover about $37 million,” GAO said. “SSA has not met its projections for fee collections due to lower-than-expected industry participation.”

In the recent statement, the Social Security Administration said the GAO report highlighted areas of improvement for eCBSV, “including cost estimation, user participation, and service limitations.”

“In response, SSA has committed to implementing several recommendations to enhance the service’s effectiveness in combating synthetic identity fraud.”

Service enhancement efforts include improving the “no-match results” provided by eCBSV when verifying identities and expanding the user base, among other measures.

According to the Social Security Administration, the new policies are aimed at ensuring the “continued viability” of eCBSV.

“By reducing costs and improving our processes, we aim to provide a more accessible and efficient tool for financial institutions and other entities,” said Lee Dudek, acting commissioner of Social Security.

Cost Issues, Savings Measures

According to the GAO report, the Social Security Administration must collect roughly $14 million per year to meet its goal of recovering all costs incurred in the eCBSV program by the end of fiscal year 2027.

The report questioned SSA’s ability to meet this goal without boosting its user base or raising fees.

An analysis by GAO of subscription data through December 2023 showed that the service “has not significantly increased users since enrollment opened in FY 2022.” Moreover, after the SSA raised fees charged to users in July 2023, fee collection declined.

“SSA officials told GAO they did not plan to take significant steps to increase use of the service. Industry participants GAO interviewed cited several factors limiting their use, such as difficult-to-interpret verification results.”

“SSA also had not established performance measures and goals for the service’s use and benefit,” the report said.

GAO recommended that the Social Security Administration take steps such as implementing appropriate control over IT investments, developing strategies to expand the use of eCBSV, and updating cost estimate guidance.

In comments at the time, the SSA agreed with all recommendations made by the GAO report, saying the agency “will evaluate our processes and policies to determine where we can make the changes outlined in the recommendations.”

Under the Trump administration, the SSA has taken various actions to cut costs and save funds.

Earlier this month, the Social Security Administration said it identified more than $800 million in cost savings for fiscal year 2025.

The savings were identified in areas such as “payroll, information technology, contracts and grants, and space savings (i.e., real property), and other savings through new, common-sense approaches to printing, travel, and purchase card policies,” the agency said.

Last month, the agency announced “significant workforce reductions” after President Donald Trump signed a Feb. 11 executive order directing agency heads to cut staff.

“By eliminating waste, bloat, and insularity, my administration will empower American families, workers, taxpayers, and our system of government itself,” the order said.