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Posted on: March 31, 2016

[ARCHIVED] Maragos: DSS Lapses May Have Delayed $1.2M Payments to Custodial Parents and Others

Mineola NY- An audit of the Department of Social Services Support Collection Unit (“DSS/SCU”) bank account found numerous internal control weaknesses resulting in delays in the disbursement of at least $1.2 million to custodial parents and others. Control weaknesses found included the absence of adequate aging reports, lack of management oversight, lack of separation of duties, and the absence of a process to determine if and when undisbursed funds should be escheated to New York State as required by the Social Services Law. These internal control weaknesses can also increase the risk of errors and fraud occurring and going undetected. The DSS/SCU is responsible for collecting and distributing approximately $96 million annually in child support payments.

“We are pleased that DSS moved quickly to correct some control weaknesses and to distribute most of the child support payments,” said Comptroller George Maragos. “We encourage the department to follow through and implement all the auditor recommendations to ensure that every dollar is paid in a timely manner to needy custodial parents.”

The audit found evidence that the SCU was not reviewing undistributed funds in its 7,509 custodial accounts, and reports were not easily retrievable for review by management or the auditors, possibly contributing to $1.2 million in delayed payments. There were no aging reports (reflecting the last time a disbursement was made from each custodial parent’s account) and those reports that did exist were not effective for management oversight purposes. Subsequent to the end of audit fieldwork, DSS/SCU provided an undisbursed balances report showing that the $5.7M balance on December 31, 2014 had been reduced to $1.2M by December 31, 2015.

Additionally, the SCU failed to enter the Undistributed Collections (“UDC”) Categories and Codes in the designated place in the system to document the reason why funds could not be disbursed from an account, as required by the NYS Office of Temporary and Disability Assistance (“OTDA”) in 2005. The UDC Categories and Codes were specifically established and designed by OTDA to help monitor, assess and reduce undisbursed funds in the custodial parents’ accounts.

Furthermore, the SCU had no process to determine when undistributed funds should be escheated to NYS as required by the Social Services Law. Finally, there was a lack of managerial oversight and segregation of duties pertaining to accounting functions. One accountant received unopened bank statements, prepared the bank reconciliations and reissued payments with no supervisory review.

While DSS agreed to implement some of the audit recommendations, DSS still needs to improve management oversight of custodial parent accounts and stale dated checks and to ensure full compliance with NYS Social Services Laws and NYS Office of Temporary & Disability Assistance.

For a copy of the report please connect with Nassau County Comptroller Maragos online:

Final_DSS Child Support Bank Acct Review_03 29 16
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