THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
SINGLE AUDIT OF
THE STATE OF NEW YORK
FOR THE FISCAL YEAR
ENDED MARCH 31, 2007
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: March 17, 2009 Refer To:
To: Candace Skurnik
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, 2007 (A-77-09-00008)
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, 2007. Our objective was to report internal control weaknesses, noncompliance issues, and unallowable costs identified in the single audit to SSA for resolution action.
The accounting firm of Toski, Schaefer & Company, P.C. 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 accounting firm of Toski, Schaefer & Company, P.C., 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 (OMB) 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 New York DDS is reimbursed for 100 percent of allowable costs. The Office of Temporary and Disability Assistance (OTDA) is the New York DDS’ parent agency.
The single audit reported that:
1. OTDA had insufficient standards for the documentation of critical systems applications (Attachment, Pages 1 and 2). The corrective action plan indicates OTDA has undertaken several improvements including developing written descriptions of documentation standards (Attachment, Pages 3 through 6).
2. Software developers inappropriately had the ability to update software in the production environment (Attachment, Pages 7 and 8). The corrective action plan indicates OTDA has a process to control software developer access to the production environment (Attachment, Pages 9 through 11).
3. OTDA did not have a plan in place for periodic testing of systems data recovery in the event of an interruption, and it had not performed a test to ensure a complete and error-free recovery of systems data (Attachment, Pages 12 and 13). The corrective action plan indicates that recovery testing was successfully performed and plans are in place to periodically run similar recovery testing in the future (Attachment, Pages 14 through 15).
4. Contracts reimbursed with Federal funds did not identify the required Federal award information (Attachment, Pages 16 and 17). The corrective action plan indicates the required Federal award information will be included in all future contracts (Attachment, Pages 18 and 19).
5. Indirect costs were charged to various Federal agencies, including SSA, based on cost allocation plan (CAP) methodologies that were pending approval by HHS’ Division of Cost Allocation (DCA) (Attachment, Pages 20 and 21). The corrective action plan correctly reports that indirect costs can be charged based on allocation methodologies that have been submitted to DCA for approval (Attachment, Pages 22 and 23).
We recommend that SSA:
1. Verify OTDA policies and procedures are adequate to ensure the New York DDS’ critical system applications are sufficiently documented.
2. Ensure that OTDA policies and procedures prevent software developer access to the production environment.
3. Determine whether OTDA developed adequate procedures for performing periodic data recovery testing of the systems used by the New York DDS.
4. Verify that the required Federal award information will be included in all contracts related to the New York DDS’s activities.
5. Upon DCA’s approval of the CAP, work with OTDA to ensure the indirect costs charged to the New York DDS were in accordance with CAP’s approved methodologies.
Please send copies of the final Audit Clearance Document to Ken Bennett. If you have questions contact Ken Bennett at (816) 221-0315 extension 1558.
Patrick P. O’Carroll, Jr.
Overview of the Office of the Inspector General
The Office of the Inspector General (OIG) is comprised of an Office of Audit (OA), Office of Investigations (OI), Office of the Counsel to the Inspector General (OCIG), Office of External Relations (OER), and Office of Technology and Resource Management (OTRM). To ensure compliance with policies and procedures, internal controls, and professional standards, the OIG also has a comprehensive Professional Responsibility and Quality Assurance program.
Office of Audit
OA conducts 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 reviews and program evaluations on issues of concern to SSA, Congress, and the general public.
Office of Investigations
OI conducts investigations 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 liaison to the Department of Justice on all matters relating to the investigation of SSA programs and personnel. OI also conducts joint investigations with other Federal, State, and local law enforcement agencies.
Office of the Counsel to the Inspector General
OCIG provides independent legal advice and counsel to the IG on various matters, including statutes, regulations, legislation, and policy directives. OCIG 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. Also, OCIG administers the Civil Monetary Penalty program.
Office of External Relations
OER manages OIG’s external and public affairs programs, and serves as the principal advisor on news releases and in providing information to the various news reporting services. OER develops OIG’s media and public information policies, directs OIG’s external and public affairs programs, and serves as the primary contact for those seeking information about OIG. OER prepares OIG publications, speeches, and presentations to internal and external organizations, and responds to Congressional correspondence.
Office of Technology and Resource Management
OTRM supports OIG by providing information management and systems security. OTRM also coordinates OIG’s budget, procurement, telecommunications, facilities, and human resources. In addition, OTRM is the focal point for OIG’s strategic planning function, and the development and monitoring of performance measures. In addition, OTRM receives and assigns for action allegations of criminal and administrative violations of Social Security laws, identifies fugitives receiving benefit payments from SSA, and provides technological assistance to investigations.