JUNE 30, 2005

OCTOBER 2006           A-77-07-00002




By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA’s programs and operations and protect them against fraud, waste and abuse.  We provide timely, useful and reliable information and advice to Administration officials, 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:

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


We strive for continual improvement in SSA’s programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse.  We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.


Date:     October 27, 2006

To:        Candace Skurnik
Audit Management and Liaison Staff

From:     Inspector General

Subject: Management Advisory Report:  Single Audit of the State of Maryland for the Fiscal Year
Ended June 30, 2005 (A-77-07-00002)

This report presents the Social Security Administration’s (SSA) portion of the single audit of the State of Maryland for the Fiscal Year ended June 30, 2005.  Our objective was to report internal control weaknesses, noncompliance issues, and unallowable costs identified in the single audit to SSA for resolution action.

Abrams, Foster, Nole & Williams, P.A. (AFNW) performed the audit.  Results of the desk review conducted by the Department of Health and Human Services (HHS) have not been received.  We will notify you when the results are received if HHS determines the audit did not meet Federal requirements.  In reporting the results of the single audit, we relied entirely on the internal control and compliance work performed by AFNW and the reviews performed by HHS.  We conducted our review in accordance with the Quality Standards for Inspections issued by the President’s Council on Integrity and Efficiency.

For single audit purposes, the Office of Management and Budget assigns Federal programs a Catalog of Federal Domestic Assistance (CFDA) number.  SSA’s Disability Insurance (DI) and Supplemental Security Income (SSI) programs are identified by CFDA number 96.  SSA is responsible for resolving single audit findings reported under this CFDA number.

The Maryland Disability Determination Services (DDS) performs disability determinations under SSA’s DI and SSI programs in accordance with Federal regulations.  The DDS is reimbursed for 100 percent of allowable costs.  The Maryland State Department of Education (MSDE) is the Maryland DDS’ parent agency.

The single audit reported that the MSDE did not properly reconcile the financial statements with the general ledger balances, resulting in incorrect receivable balances being carried forward each year.  As a result, the accuracy of Federal cash draws may have been impacted.  The corrective action plan indicated that MSDE agreed with the finding, but stated that on a total basis, receivables reconciled between the financial statements and the General Ledger, and by December 31, 2006 receivables would be reconciled by grant (Attachment A, pages 1 and 2).

The Office of the Inspector General is currently conducting an audit of Administrative Costs Claimed by the Maryland DDS (A-13-06-16029) that covers part of the same time period as this single audit.  The administrative cost audit will review Federal cash draws made by the Maryland DDS and report any problems.  Accordingly, we are not making a recommendation on this single audit finding.

The single audit also identified that MSDE charged administrative expenses in excess of the amount allocated in the Federal award (Attachment B, pages 1 and 2).  Although this finding was not specifically identified to SSA it may have an impact on DDS operations.  I am bringing this matter to your attention as it represents a potentially serious service delivery and financial control problem for the Agency.

Please send copies of the final Audit Clearance Document to Shannon Agee and
Rona Lawson.  If you have questions contact Shannon Agee at (816) 936‑5590.

Patrick P. O’Carroll, Jr.




Overview of the Office of the Inspector General

The Office of the Inspector General (OIG) is comprised of our Office of Investigations (OI), Office of Audit (OA), Office of the Chief Counsel to the Inspector General (OCCIG), and Office of Resource Management (ORM).  To ensure compliance with policies and procedures, internal controls, and professional standards, we also have a comprehensive Professional Responsibility and Quality Assurance program.

Office of Audit
OA conducts and/or supervises financial and performance audits of the Social Security Administration’s (SSA) programs and operations and makes recommendations to ensure program objectives are achieved effectively and efficiently.  Financial audits assess whether SSA’s financial statements fairly present SSA’s financial position, results of operations, and cash flow.  Performance audits review the economy, efficiency, and effectiveness of SSA’s programs and operations.  OA also conducts short-term management and program evaluations and projects on issues of concern to SSA, Congress, and the general public.

Office of Investigations
OI conducts and coordinates investigative activity related to fraud, waste, abuse, and mismanagement in SSA programs and operations.  This includes wrongdoing by applicants, beneficiaries, contractors, third parties, or SSA employees performing their official duties.  This office serves as OIG liaison to the Department of Justice on all matters relating to the investigations of SSA programs and personnel.  OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.

Office of the Chief Counsel to the Inspector General
OCCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives.  OCCIG also advises the IG on investigative procedures and techniques, as well as on legal implications and conclusions to be drawn from audit and investigative material.  Finally, OCCIG administers the Civil Monetary Penalty program.

Office of Resource Management
ORM supports OIG by providing information resource management and systems security.  ORM also coordinates OIG’s budget, procurement, telecommunications, facilities, and human resources.  In addition, ORM is the focal point for OIG’s strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act of 1993.