James Eli Shiffer, the Star Tribune’s watchdog and data editor, digs into data and documents to uncover the news. Reach him at 612-673-4116, james.shiffer@startribune.com or follow him on Twitter at @jameselishiffer. Tell us what to investigate. Send your story tips to whistleblower@startribune.com.

Feds terminate organization that handled finances of vulnerable adults

Posted by: James Eli Shiffer Updated: September 4, 2014 - 4:25 PM

More than 8 million Americans who receive Social Security payments do not handle their own money. About half of them are minor children, whose parents typically manage their SSI payments. The rest suffer from Alzheimer's, mental illness, addiction or some other incapacitating condition that prompts the government to appoint a third party to collect the checks and pay bills. Those entrusted with that job are called "representative payees," or rep payees for short.

It's an enormous, $72 billion program that has received little public scrutiny, despite the potential for fraud and exploitation of vulnerable people, and here's one reason why: The amount of public information about rep payees is minuscule.

This spring, Social Security terminated a Minneapolis organization, the J.T. Kitt Society, from its rep payee program. First authorized as a rep payee in 1995, J.T. Kitt was allowed to charge recipients a government-capped monthly fee, typically $40, in exchange for collecting their benefits and paying their rent, utilities and other essential bills.

"We had some questions regarding their business plan and their bonding plans," said Carmen Moreno, a spokeswoman for the Social Security Administration. It was not about misuse of benefits, she said. Social Security sent J.T. Kitt a letter in April notifying it of the termination, but asked the organization to stay on for an additional month to make the transition easier for its 370 recipients.

Moreno described the termination as a "rare occasion" that reflected Social Security's oversight of its rep payees. The action wasn't announced anywhere that I could find. In fact, there are no public lists of current rep payees, or terminated rep payees, or even those 364 rep payees who have been convicted of crimes related to fraud and abuse since 2013 (I got that number from Social Security's Office of Inspector General).

I only found out about J.T. Kitt Society's termination a couple of weeks ago, when a former client of theirs from Minneapolis, Leanna Ferguson, called me to inquire if I knew what was going on.

Jeff Kittelson, who ran the now-defunct J.T. Kitt Society, told me he was never given a reason for Social Security's decision. But he said it would have cost him $50,000 to $75,000 to hire a lawyer to fight it, so he didn't bother.

Moreno said all the recipients were notified by Social Security of the change, but Kittelson is skeptical about how well that worked. 

"It's a tough situation" for the recipients, Kittelson said. "Each individual's got their own disability. Some of them have caseworkers. Some don't."

Last year, a federal watchdog concluded that the Social Security Administration "cannot effectively administer the [rep payee] program within its current resources and structure." Social Security has assured Congress that it's keeping a close eye on rep payees. It's about time they raised the curtain on their regulatory records and proved it.

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT