October 2002 A-15-02-22040



We improve SSA programs and operations and protect them against fraud, waste, and abuse by conducting independent and objective audits, evaluations, and investigations. We provide timely, useful, and reliable information and advice to Administration officials, the Congress, and the public.


The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:

Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.

To ensure objectivity, the IG Act empowers the IG with:

Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.


By conducting independent and objective audits, investigations, and evaluations, we are agents of positive change striving for continuous improvement in the Social Security Administration's programs, operations, and management and in our own office.


Date: October 3, 2002 Refer To:

To: Manuel J. Vaz
Regional Commissioner
for Boston

From: Assistant Inspector General
for Audit

Subject: Management Advisory Report - Limited Review of Connecticut Disability Determination Services' Lease Costs (A-15-02-22040)


Our objective was to conduct a cost-benefit analysis of the Connecticut Disability Determination Services' (CT-DDS) current lease agreement. CT-DDS did not get approval from the Social Security Administration (SSA) before entering into the lease agreement for the new site.


This follow-up review is in response to your July 20, 2001 comments to our report entitled Audit of the Administrative Costs Claimed by the Connecticut Disability Determination Services.

At that time, the Regional Commissioner's (RC) Office requested that we conduct a review of the CT-DDSs site lease and indirect cost allocation plan.

Specific concerns related to the lease costs were: (i) the state failed to provide a cost benefit analysis of the CT-DDS move, (ii) CT-DDS failed to demonstrate that the current rental rate is comparable to the local market, and (iii) the CT-DDS failed to seek advance or pre-approval of its current lease from SSA.


We limited our review to lease costs. We contacted the State Department of Social Services (DSS) and confirmed that a cost-benefit analysis had not been prepared. In addition, we were informed that the lease information was no longer available. Although
this impaired our attempts to perform a complete cost-benefit analysis, we were able to conduct a limited analysis using a comparative approach.

We examined correspondence between the DSS and regional office staff related to the site lease covering the period December 1997 through January 1998. This correspondence detailed the results of various meetings. We also reviewed General Services Administration (GSA) material on rental costs of other facilities in the Hartford, Connecticut, area. We also reviewed the Program Operations Manual System (POMS) to determine whether the RC's has the authority to approve leases. We conducted field work from April to June 2002 at SSA Headquarters in Baltimore, Maryland.



Based on our review of lease documentation for the previous 10 Griffin Road location and the current Wawarme Avenue location, we determined the monthly rental rates for the locations to be $28,125 and $31,630 respectively. The CT-DDS monthly rental at the current location is approximately $3,500 more than the old location. However, included in the current location's monthly rate is electricity and snow removal, which was an added cost at the prior location. The monthly cost of electricity at the prior location from January through April 1999 was approximately $5,900. For the same period, the average cost of snow removal per month was approximately $2,900. Details are shown below.

10 Griffin January February March April Average Cost
Snow Removal $4,571.00 $2,021.00 $2,139.00 $2,867.00 $2,900
Electrical 4,303.52 5,968.15 6,159.79 7,201.03 $5,900
Total $8,874.52 $7,989.15 $8,298.79 $10,068.03


We performed a limited independent market analysis of other SSA locations rented through GSA to determine whether the rate charged per square foot at the new location conformed with GSA negotiated rates in the Hartford, Connecticut, area. The results are as follows.

SSA Locations
Annual Rate
135 High St., Hartford $15.65
20 Church St., Hartford $19.84
Burnside Ave., East Hartford $11.96
100 Arch St., New Britain $11.22
225 North Main St., Bristol $9.75

DDS Location
Annual Rate
309 Wawarme Ave., Hartford $10.75

The new DDS location annual rates are in line with rates being charged in the area.

Other Matters

We acknowledge the Agency's concern regarding the CT-DDS' noncompliance with POMS requirements for pre-approval of the lease. However, our review of correspondence between RC office and CT-DDS staff disclosed there were significant indications of CT-DDS' plans to move. Correspondence dating back to November 1997, which was approximately 18 months before the lease agreement was signed, indicated that RC staff knew of the impending move. As such, it appears RC staff had sufficient time to advise the CT-DDS of approval requirements and reiterate the Agency's desire to obtain a cost-benefit analysis.


Based on our review, we concluded that SSA had not incurred unreasonable or excessive costs for the CT-DDS relocation even though CT-DDS failed to seek SSA's pre-approval of the move. As indicated in the Other Matters section of the report, we believe it is important that SSA effectively communicate its approval requirements to the DDS(s). SSA has the authority to withhold funding when DDSs submit claims for unapproved costs. In the future when SSA has questions about certain expenditures, the Agency may withhold funding until the DDS submits required documentation3.

Steven L. Schaeffer


APPENDIX A - Acronyms

APPENDIX B - OIG Contacts and Staff Acknowledgments

Appendix A

CT-DDS Connecticut Disability Determination Services

DSS Department of Social Services

GSA General Services Administration

POMS Program Operations Manual System

SSA Social Security Administration

RC Regional Commissioner

Appendix B
OIG Contacts and Staff Acknowledgments
OIG Contacts

Frederick C. Nordhoff, Director, Financial Audit Division, (410) 966-6676

Carl Markowitz, Deputy Director, Financial Audit Division, (410) 965-9742


In addition to those named above:

Suzanne Valett, Auditor-in-Charge

For additional copies of this report, please visit our web site at or contact Office of the Inspector General's Public Affairs Specialist at (410) 966-1375. Refer to Common Identification Number A-15-02-22040.

Overview of the Office of the Inspector General

Office of Audit

The Office of Audit (OA) conducts comprehensive financial and performance audits of the Social Security Administration's (SSA) programs and makes recommendations to ensure that program objectives are achieved effectively and efficiently. Financial audits, required by the Chief Financial Officers' Act of 1990, assess whether SSA's financial statements fairly present the Agency's financial position, results of operations and cash flow. Performance audits review the economy, efficiency and effectiveness of SSA's programs. OA also conducts short-term management and program evaluations focused on issues of concern to SSA, Congress and the general public. Evaluations often focus on identifying and recommending ways to prevent and minimize program fraud and inefficiency, rather than detecting problems after they occur.

Office of Executive Operations

The Office of Executive Operations (OEO) supports the Office of the Inspector General (OIG) by providing information resource management; systems security; and the coordination of budget, procurement, telecommunications, facilities and equipment, and human resources. In addition, this office is the focal point for the OIG's strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act. OEO is also responsible for performing internal reviews to ensure that OIG offices nationwide hold themselves to the same rigorous standards that we expect from SSA, as well as conducting investigations of OIG employees, when necessary. Finally, OEO administers OIG's public affairs, media, and interagency activities, coordinates responses to Congressional requests for information, and also communicates OIG's planned and current activities and their results to the Commissioner and Congress.

Office of Investigations

The Office of Investigations (OI) conducts and coordinates investigative activity related to fraud, waste, abuse, and mismanagement of SSA programs and operations. This includes wrongdoing by applicants, beneficiaries, contractors, physicians, interpreters, representative payees, third parties, and by SSA employees in the performance of their duties. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

Counsel to the Inspector General

The Counsel to the Inspector General provides legal advice and counsel to the Inspector General on various matters, including: 1) statutes, regulations, legislation, and policy directives governing the administration of SSA's programs; 2) investigative procedures and techniques; and 3) legal implications and conclusions to be drawn from audit and investigative material produced by the OIG. The Counsel's office also administers the civil monetary penalty program.