SOCIAL SECURITY ADMINISTRATION
CFDA 96.001 SOCIAL SECURITY--DISABILITY INSURANCE (Administration)
I. PROGRAM OBJECTIVES
The Social Security Administration (SSA) is responsible for disability determinations under the
Disability Insurance (DI) and the Supplemental Security Income (SSI) programs. The DI
program was established in 1954 under title II of the Social Security Act and provides benefits to
disabled wage earners and their families in the event a family wage earner became disabled. In
1974, Congress enacted the title XVI, SSI program, which provides benefits to financially needy
individuals who are disabled.
II. PROGRAM PROCEDURES
The disability process begins when a person, referred to as a claimant, completes a claim for DI or
SSI benefits. SSA field office staff verifies the claimant's non-medical eligibility. The claim is
then forwarded to the cognizant State Disability Determination Service (DDS) for a medical
determination of disability. To assist in making proper disability determinations, the DDS is
authorized to purchase medical examinations, x-rays and laboratory tests on a consultative basis
to supplement evidence obtained from the claimants' physicians or other treating sources.
SSA pays 100 percent of the costs incurred by DDSs in making disability determinations. Each
year the State DDS submits a budget request to SSA for review and approval. The DDS is
notified of budget approval by Form SSA-872. Once approved, the DDS is allowed to withdraw
Federal funds through the Federal Payment Management System (PMS) to meet immediate
program expenses. At the end of each quarter of each fiscal year, the DDS submits a SSA-4513
(State Agency Report of Obligations for SSA Disability Programs) to account for program
disbursements and obligations.
As of May 1998, all DDSs are withdrawing Federal funds through the Department of the
Treasury's Automated Standard Application for Payment (ASAP) System.
III. COMPLIANCE REQUIREMENTS
In developing the audit procedures to test compliance with the requirements for a Federal
program, the auditor should first look to Part 2, Matrix of Compliance Requirements, to
identify which of the 14 types of compliance requirements described in Part 3 are
applicable and then look to Parts 3 and 4 for the details of the requirements.
A. Activities Allowed or Unallowed
Each State making disability determinations is entitled to receive from the Trust funds
reimbursement for the cost of making those disability determinations for SSA. Activities shall be
in accordance with the budget request approved by SSA. Purchased medical services, such as
medical evidence of record (MER) and consultative examinations (CE), must be in accordance
with the DDS's fee schedule for purchased medical services. Activities allowable under the
disability programs include personnel services, purchased medical services, and other
non-personnel costs (42 USC 421 (e) and (f)), 20 CFR 404.1626).
B. Allowable Costs/Cost Principles
1. Direct Costs
The SSA Program Operations Manual System (POMS) contains guidance on direct costs.
Personnel services (POMS DI 39518) include personnel costs and employee benefits. Purchased
medical services (POMS DI 39545) include MER and CE. Other non-personnel costs include
travel (POMS DI 39524), space (POMS DI 39527), equipment (POMS DI 39530), and
contracted services (POMS DI 39542).
2. Indirect Costs
Indirect costs which may be charged to the disability program generally arise from three sources:
(a) administrative costs of the parent agency related to DDS; (b) business costs associated with
the accounting, billing, and procurement services provided by the parent agency for the DDS; and,
(c) automated services provided to the DDS that are operated by the parent agency.
3. Non-SSA Work
Non-SSA work may be performed by the DDS. However, SSA shall not be charged for the direct
or indirect costs of non-SSA work performed by the DDS.
1. Financial Reporting
a. SF-269, Financial Status Report - Applicable
b. SF-270, Request for Advance or Reimbursement - Applicable
c. SF-271, Outlay Report and Request for Reimbursement for Construction Program - Not
d. SF-272, Federal Cash Transactions Report - Not Applicable
e. SSA-4513, State Agency Report on Obligations for SSA Disability Programs (OMB No.
0960-0421) - This report is due quarterly to account for program disbursements and unliquidated
obligations (20 CFR 404.1625(a)).
2. Performance Reporting - Not Applicable
3. Special Reporting - Not Applicable
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