SSA needs better assessment of data-sharing costs as Treasury program saves millions, GAO says

While a pilot program giving the Treasury Department access to the Social Security Administration’s death data is projected to save the government millions, SSA still needs to better evaluate the cost of collecting those records from states, a government watchdog warned in a new report. 

A three-year pilot program with Treasury’s Do Not Pay initiative provides the agency with temporary access to the SSA’s full Death Master File — the compilation of deceased Social Security number holders — to prevent improper payments. States collect death data, and statutes require the SSA to pay them for the records. Federal agencies that also use the data must compensate SSA. 

A report released Friday by the Government Accountability Office found that SSA did not comply with requirements when setting compensation rates with states for their death records. Instead, SSA paid each state the same amount for each death record and did not receive information from the states on individual collection costs. 

“Without this information, SSA does not know if it is paying too much or too little for states’ data,” the report stated, adding that “SSA’s ability to negotiate appropriate prices with states may also be limited.” 

Meanwhile, SSA’s payments to states have more than doubled under new contracts that went into effect in December 2023, the GAO found. 

The government watchdog recommended that the agency identify and estimate the “relevant costs” to assess the extent of inconsistencies in its current pricing structure and, in turn, reduce administrative costs and improve efficiency. 

Under the current model, government agencies, including Treasury, that receive state death data must pay the SSA a proportional share of the amount paid to states. After $4.6 million in costs, the Treasury Department found access to the DMF helped prevent, identify, or recover about $113.5 million in improper payments. 

The government watchdog further determined the SSA’s share of data costs is expected to decrease from 42.4% of the total paid to states in 2024 to 23.1% in 2025, as the agency passes more costs to Treasury and other agencies. In doing so, it changed its cost methodology in 2025, failing to account for agencies’ proportional share of data costs, the GAO said. 

In 2025, SSA assigned Treasury to reimburse the federal benefits agency approximately $9.2 million, well above the $6.1 million cap the two agencies agreed to in 2023, according to the report. As of April 2025, Treasury projects the pilot will save about $337 million in benefits over the next three years, but the GAO said the agency needs better cost allocation methods for the agency to make accurate projections. 

“Absent a sound cost allocation methodology that is based on considerations related to agencies’ proportional share of costs, agencies, including Treasury, may not be able to make informed decisions about the cost-effectiveness of obtaining access to the full” Death Master File, the GAO wrote. 

GAO issued three recommendations to address its concerns, and the SSA agreed with them. This included the SSA commissioner ensuring that the agency’s contracts with states reflect “statutorily authorized costs and include necessary documentation,” and conducting an analysis of state cost information to determine whether a renegotiation of the fee schedule is necessary. 

The watchdog also recommended that the SSA commissioner ensure SSA revises its cost allocation methodology. 

The report was released just days after President Donald Trump signed a bipartisan bill titled the Ending Improper Payments to Deceased People’s Act, which amends the Social Security Act to permanently authorize the SSA to share the Death Master File with the Treasury’s Do Not Pay System. The bill addressed a prior GAO recommendation on this issue.