MARCH 31, 2005

November 2006           A-77-07-00003



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:

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.


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:     November 22, 2006                                                                                   Refer To:

To:        Candace Skurnik, Director
Audit Management and Liaison Staff

From:      Inspector General

Subject: Management Advisory Report:  Single Audit of the State of New York for the Fiscal Year Ended March 31, 2005 (A-77-07-00003)

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, 2005.  Our objective was to report internal control weaknesses, noncompliance issues, and unallowable costs identified in the single audit to SSA for resolution action.

KPMG LLP performed the audit.  The Department of Health and Human Services (HHS) desk review concluded that the audit met Federal requirements.  In reporting the results of the single audit, we relied entirely on the internal control and compliance work performed by the Auditor General 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 New York 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 New York Department of Social Services, Office of Temporary and Disability Assistance (OTDA), is the DDS’ parent agency.

The single audit reported:

  1. Indirect costs were allocated to the New York DDS based on cost allocation plan methodologies that were pending HHS’ approval.  The corrective action plan indicated that OTDA submitted the cost allocation plan to HHS as required and are working with the Federal program staff to clarify and resolve issues to get outstanding plans approved (see Attachment - pages 1 through 4).
  2. Payroll expenses were miscoded in the accounting system which may have resulted in improper charges to various Federal programs, including SSA.  The corrective action plan indicated that OTDA will continue to stress the importance of using proper accumulator codes, and appropriate corrections were made to the employee timesheets (see Attachment - pages 5 through 8).
  3. Procedures were not in place to track changes made to time and accumulator code records.  The corrective action plan indicated that policies and procedures will be implemented to ensure changes are tracked (Attachment - pages 9 through 12).

Our Office is currently conducting an audit of Administrative Costs Claimed by the
New York DDS (A-02-07-17046) that covers the same time period as this single audit.  The administrative cost audit will review the areas where the single audit reported

  1. findings – indirect costs, personnel, and internal controls – and report any problems.  Accordingly, we are not making recommendations on these single audit findings.

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.


The Social Security Act § 1601 et seq., 42 U.S.C. § 1381 et seq.

The Social Security Act § 1801 et seq., 42 U.S.C. § 1395 et seq.

SSA continues to review these cases.  Our conclusions are based on our review of available electronic data on SSA’s systems through November 2006.

For purposes of our review, we considered an SSI payment that was issued after death to have been “avoidable” if it was issued more than 30 days after the Agency terminated the Medicare benefits.

The Privacy Act of 1974, as amended; 5 U.S.C. § 552a(p).

SSA, POMS GN 02602.050.A.

SSA incorrectly terminated the Medicare benefits and SSI payments to these 85 individuals.  As of December 2005 (when we obtained our data), the Agency had reinstated the monthly SSI payments but had not reinstated the Medicare benefits to these individuals.  We did not quantify the number of individuals whose Medicare benefits and SSI payments were incorrectly terminated for death but were fully corrected by the Agency subsequent to December 2005.

In some cases, a deceased spouse’s date of death was incorrectly recorded on the living spouse’s Medicare record.  The 165 cases in our audit represents 0.006 percent of the 2.7 million Medicare records that were terminated for death as of December 2005.  Limited testing of the 2.7 million records did not uncover any additional instance of erroneous terminations.

SSA, Operational Bulletin OB-06-019, April 26, 2006.

These 165 cases are summarized by State and by responsible SSA Program Service Center in Appendix B.

We tested the 2.7 million records and concluded that nearly all of these cases were likely terminated correctly (i.e., the beneficiaries were, in fact, deceased).