Report Summary
Social Security Administration Office of the Inspector General

March 2010

Administrative Costs Claimed by the Arizona Disability Determination Services


To (1) evaluate the Arizona Disability Determination Services’ (AZ-DDS) internal controls over the accounting and reporting of administrative costs;
(2) determine whether costs claimed were allowable and funds were properly drawn; and
(3) assess limited areas of the general security controls environment. 


Disability determinations under the Social Security
Administration’s (SSA)
Disability Insurance and
Supplemental Security
Income programs are performed by disability determination services (DDS) in each State or other responsible jurisdiction.
SSA reimburses the DDS for 100 percent of allowable expenditures up to its approved funding authorization.

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Our Findings

Twenty-nine (58 percent) of the 50 individuals in our random sample received 4 or 5 SSN replacement cards in 1 year even though they did not have a valid exclusion or exception for the additional cards. They received additional replacement cards beyond their annual limit because (1) SSA's systems detected a change in the type of evidence submitted to obtain an SSN card as an allowable legend change exclusion or (2) SSA issued replacement cards beyond the time limit permitted under the non-receipt exception. Projecting this finding to the population, we estimate that SSA erroneously issued SSN replacement cards to 947 individuals after they reached their annual limit. We also identified 17 individuals who received either 6 or more cards in a year or 4 or more cards during each of 2 calendar years. We determined that 12 (70 percent) of these 17 individuals received 1 or more replacement SSN cards in error.

Our Recommendations

We recommended that SSA:

  1. Instruct AZ-DDS to refund $563,812 paid for missed CE appointments or request an exemption to the no-pay policy.
  2. Ensure AZ-DDS schedules, to the extent possible, the maximum number of CEs or modify its contract to pay only for CEs actually scheduled.
  3. Determine whether it was necessary for AZ-DDS to exceed the highest allowable rates for CE fees.
  4. Instruct AZ-DDS to refund $29,805 for non-SSA work.
  5. Ensure AZ-DDS improves controls over estimates of unliquidated obligations.
  6. Ensure AZ-DDS monitors and properly adjusts unliquidated obligations timely.
  7. 'Ensure AZ-DES improves controls over the allocation of State-wide Indirect Costs.
  8. Ensure AZ-DDS improves controls over sensitive documents.

SSA agreed with our recommendations.