Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
SUBJECT: New York
State
Department of Social
Services
Docket No. 90-250
Audit Control No. A-02-89-00001
Decision No. 1230
DATE: February 27, 1991
DECISION
The New York State Department of Social Services (New York) appealed
a
determination by the Social Security Administration (SSA)
disallowing
$571,952 in federal funding claimed by New York in connection
with its
Disability Determination Program (DDP). The disallowance
resulted from
an audit for the period October 1, 1983 through March 31,
1987. (The
same audit and subsequent disallowance determination raised
a separate
issue involving documentation of questioned costs, which was
docketed by
the Board as Docket No. 90-251.)
The amount disallowed here represented the interest earned by New York
on
DDP funding drawn down for retirement benefits for DDP employees.
SSA
concluded that New York prematurely drew down the program money and
invested
it in an interest bearing account before applying it to the
employees'
retirement fund.
In its notice of appeal, New York requested a summary decision
concerning
this disallowance on the basis of prior Board decisions. New
York
acknowledged that-- "There are no material issues of fact or law
which can
distinguish the instant case from those presented in Docket
Nos. 90-40 and
87-48." See New York State Department of Social
Services, DAB No. 1186
(1990) and Ruling on Request for Reconsideration,
dated Oct. 19, 1990; and
New York State Department of Social Services,
DAB No. 910 (1987).
In the prior decisions, the Board concluded that the premature
drawdowns
were improper since they were made substantially in advance of the
time
that New York used the funds for retirement fund obligations. We
also
concluded that SSA was entitled to disallow an amount of funding
equal
to the amount of interest actually earned on the premature drawdowns
as
an applicable credit. Finally, we concluded that the Agency
had
properly computed the interest earned by the State for the period
in
dispute.
In a letter to the Board dated February 13, 1991, SSA advised that it
also
agrees to a summary decision concerning the instant disallowance.
Consequently, based on our decisions DAB No. 910 and DAB No. 1186, and
our
Ruling on Request for Reconsideration of Decision No. 1186, which
we
incorporate in full here, we sustain the entire disallowance
of
$571,952.
Norval D. (John) Settle
Alexander G. Teitz
Donald F. Garrett Presiding Board