MARCH 31, 2000

February 2002




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.


Office of the Inspector General

Refer To:


Date: FEB 25, 2002

To: Ellen Baese
Management Analysis and Audit Program Support Staff

Assistant Inspector General for Audit

Subject: Single Audit of the State New York for the Fiscal Year Ended March 31, 2000 (A-ll -02-00008)

This report presents the Social Security Administration's (SSA) portion of the single audit of the State of New York for the Fiscal Year ended March 31 I 2000. KPMG, Certified Public Accountants, performed the audit. The Department of Health and Human Services' desk review concluded that the audit met Federal requirements.

The New York Disability Determination Services (DDS) performs disability determinations under SSA's Disability Insurance (Dl) and Supplement~1 Security Income (SSI) programs in accordance with Federal regulations. The DDS is reimbursed for 100 percent of allowable costs. The New York Department of Social Services (DSS), Office of Temporary and Disability Assistance, is the New York DDS's parent agency.

For single audit purposes, the Office of Management and Budget (OMB) assigns Federal programs a Catalog of Federal Domestic Assistance (CFDA) number. SSA's Dl and SSI programs are identified by CFDA number 96. SSA is responsible for resolving single audit findings reported under this CFDA number.

The single audit reported the following findings (see Appendix A):

Expenditures were not properly approved and supported by documentation. The corrective action plan indicates procedures are in place to ensure documentation is sufficient and that all vouchers are signed prior to submission.

Cost allocation procedures set forth in 0MB Circular A-87 were not followed. The corrective action plan indicates that cost allocation plans have been submitted for approval.

Page 2 - Ellen Baese

Salaries were incorrectly recorded in the State’s payroll system because of errors in employee timesheets, resulting in questioned costs of $4,263. The corrective action plan indicates that a process has been established to correctly capture all time and leave data for the payroll system.

SSA costs of $760,211 were incorrectly charged to non-SSA programs. The corrective action plan indicates efforts will be made to charge expenditures to the appropriate funding source and necessary adjustments will be made quarterly.

We recommend that SSA:

1. Remind the DDS of the requirements for approving expenditures and for retaining supporting documentation.

2. Verify that DDS expenses are being allocated to SSA based on approved cost allocation methodologies.

3. Determine the portion of the $4,263 in salary-related questioned costs incorrectly charged to SSA and recover the unallowable costs from the DDS.

4. Ensure that the DDS has a system in place for accurately recording and reporting expenses.

The single audit also disclosed the following findings that may impact DDS operations although they were not specifically identified to SSA. I am bringing these matters to your attention as they represent potentially serious service delivery and financial control problems for the Agency (see Appendix B).

Supporting documentation and records were not maintained for transactions with outside vendors.

Reviews were not performed to verify the allowability of expenditures charged to Federal programs.

DSS did not perform pre-settlement reviews of claims submitted for current expenditures and prior adjustments.

Quarterly expenditure reports did not agree with the State’s Central Accounting System.

page 3- Ellen Baese


Please send copies of the final Audit Clearance Document to Mark Bailey in Kansas City and Paul Wood in Baltimore. If you have questions contact Mark Bailey at (816) 936-5591.

Some items such as graphics or charts used in reports were unable to be converted to internet format at this time. Therefore, if you would like a copy of the full report please write:

Office of the Inspector General
Public Affairs
300 Altmeyer Bldg.
6401 Security Blvd.
Baltimore MD 21235

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 theChief 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.

Office of Executive Operations

The Office of Executive Operations (OEO) provides four functions for the Office of the Inspector General (OIG) – administrative support, strategic planning, quality assurance, and public affairs. OEO supports the OIG components by providing information resources management; systems security; and the coordination of budget, procurement, telecommunications, facilities and equipment, and human resources. In addition, this Office coordinates and is responsible for the OIG’s strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act. The quality assurance division performs internal reviews to ensure that OIG offices nationwide hold themselves to the same rigorous standards that we expect from the Agency. This division also conducts employee investigations within OIG. The public affairs team communicates OIG’s planned and current activities and the results to the Commissioner and Congress, as well as other entities.

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.