THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
SERVICE COSTS CLAIMED
BY THE KANSAS ADVOCACY
PROTECTIVE SERVICES INC.
MANAGEMENT ADVISORY REPORT
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.
Date: March 5, 2004
To: Candace Skurnik
Director Audit Management and Liaison Staff
From: Assistant Inspector General for Audit
Subject: Management Advisory Report: Consulting and Professional Service Costs Claimed by Kansas Advocacy and Protective Services Incorporated (A-77-04-00009)
This report presents the Social Security Administration's (SSA) portion of the Review of Consulting and Professional Service Costs Claimed by Kansas Advocacy and Protective Services (KAPS) Incorporated for the period October 1, 1995 through September 30, 2002. The U.S. Department of Health and Human Services (HHS) Office of Inspector General performed the review and provided us with its results. Our objective was to report to SSA for resolution the SSA-related findings identified in the HHS report.
In reporting the results of the review, we relied entirely on the work performed by HHS. The Office of Management and Budget (OMB) Circular A-50 Audit Follow-up, provides the policies and procedures for resolving recommendations contained in reports issued by Inspectors General. In accordance with OMB Circular A-50, SSA is responsible for ensuring that appropriate corrective action is taken on the SSA-related recommendations contained in this review.
KAPS is a nonprofit organization which pursues administrative, legal, and other appropriate remedies to ensure the protection of the rights of persons with disabilities. During the seven year period of the review, KAPS received Federal funds totaling about $6 million from the Department of Health and Human Services, Department of Education, and SSA.
The HHS review found that KAPS charged Federal programs, including SSA,
$491,936 for payments made to, or on behalf of members of its board of directors for consulting and legal fees and health insurance premiums (Attachment A, pages 1 through 5). OMB Circular A-122 Cost Principles for Non-Profit Organizations, does not allow these types of payments to officers or employees of grantee organizations. Of the $491,936 in unallowable costs, $5,188 was identified to SSA (Attachment A, page 6).
HHS recommended that the unallowable costs be returned to the applicable Federal programs (Appendix A, page 4). In comments to the report, KAPS' legal counsel stated that KAPS is entirely funded with Federal grant dollars and does not possess the non Federal dollars to refund the disallowed expenditures (Attachment A, pages 7 through 9).
We recommend that SSA: (1) seek restitution from KAPS for $5,188, and (2) determine if KAPS should be deemed ineligible for SSA funds in the future given the reported funds mismanagement.
Please send copies of the final Audit Clearance Document to Shannon Agee and Rona Rustigian. If you have questions contact Shannon Agee at (816) 936 5590.
Steven L. Schaeffer
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 the Chief 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, rather than detecting problems after they occur.
Office of Executive Operations
The Office of Executive Operations (OEO) supports the Office of the Inspector General (OIG) by providing information resource management; systems security; and the coordination of budget, procurement, telecommunications, facilities and equipment, and human resources. In addition, this office is the focal point for the OIG's strategic planning function and the development and implementation of performance measures required by the Government Performance and Results Act. OEO is also responsible for performing internal reviews to ensure that OIG offices nationwide hold themselves to the same rigorous standards that we expect from SSA, as well as conducting investigations of OIG employees, when necessary. Finally, OEO administers OIG's public affairs, media, and interagency activities, coordinates responses to Congressional requests for information, and also communicates OIG's planned and current activities and their results to the Commissioner and Congress.
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.