JUNE 30, 2000

December 2001




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


Date: DEC 21, 200l

Refer To:

To: Dan Sweeney
Acting Director
Management Analysis and Audit Program Support Staff

From: Assistant Inspector General for Audit

Subject: Single Audit of the State of Rhode Island for the Fiscal Year Ended June 30, 2000 (A-77-02-00005)

This report presents the Social Security Administration's (SSA) portion of the single audit of the State of Rhode Island for the Fiscal Year ended June 30, 2000. The Rhode Island Auditor General performed the audit and its reports on compliance and internal controls are attached (see Appendix A). 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.

The Rhode Island Disability Determination Services (DDS) performs disability determinations under SSA's Disability Insurance (Dl) and Supplemental Security Income (SSI) programs in accordance with Federal regulations. The DDS is reimbursed for 100 percent of allowable costs. The Rhode Island Department of Human Services(DHS) is the Rhode Island 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 reporte~ under this CFDA number.

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

The State did not have a statewide inventory system and procedures were not in place to ensure compliance regarding the use, management, and disposition of equipment. The corrective action plan indicates that the State subsequently issued statewide policies and procedures to record and track inventories.

Funds were not drawn in accordance with the Cash Management Improvement Act (CMIA) agreement. The corrective action plan indicates the State will ensure that the CMIA agreement is reflective of current payment patterns.

Page 2– Dan Sweeney

DHS allocated central service costs to various Federal programs, including SSA’s disability programs, based on an estimated amount. Once actual amounts were available, DHS adjusted current year charges to account for the overcharge in previous fiscal years. The corrective action plan indicates that the overcharge is being adjusted by excluding quarterly central service costs until all costs have been recouped.

We recommend that SSA ensure that DHS:

1. Established procedures to properly account for equipment purchased with SSA funds.

2. Developed procedures to draw Federal funds in accordance with the terms of the CMIA agreement.

3. Credited the disability programs for the differences between the estimated and actual central services costs.

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 C).

The State has not accumulated historical information concerning the cost and classification of its investment in fixed assets.

Password access controls were not in place to restrict access to the Government On-Line Data Entry Network system so that no individual has capability to both initiate and approve transactions. In addition, programmers have access to the system.

System access controls over the accounting system do not require unique passwords for each user to control and restrict access to the system.

Federal reports were not accurately prepared.

DHS did not have certifications to identify and exclude from its procurement process those subcontractors and subrecipients barred from participation in Federal programs.

The State did not credit checks outstanding more than 180 days to the Federal government as required by Federal regulations, resulting in questioned costs of $32,801.

Expenditures were not claimed within the period of availability, resulting in questioned costs of $20,369.

Page 3- Dan Sweeney

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.

Steven L. Schaeffer

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.