SSA Faulted For Lax Records On IT Purchases - InformationWeek
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9/28/2010
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SSA Faulted For Lax Records On IT Purchases

Auditors can't determine whether Social Security overpaid or underpaid for thousands of Hewlett-Packard computers.

IT Hall Of Shame, Part 2
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IT Hall Of Shame, Part 2
The Social Security Administration (SSA) has either overpaid or underpaid Hewlett-Packard for a multimillion-dollar computer equipment purchase, thanks to lazy record keeping on the part of the agency, according to an audit.

In September 2005, the SSA signed a blanket purchase agreement (BPA) to buy new computer equipment and services from HP for an estimated cost of $115 million, according to a report released this month by the agency's inspector general.

The deal, which included 86,000 computers and 109,000 monitors, purchased equipment for various offices throughout the agency, including headquarters; regional and field offices; and program service centers. As of August 2009, the SSA had paid HP about $95.2 million under the BPA.

According to auditors, however, the agency didn't track which products it ordered against which it received from the vendor. Auditors, too, could not reconcile SSA records, and used records from HP and other "relevant sources" to match them up.

In its research, the inspector general found that in a "best-case scenario" the SSA either owes HP $98,000 for 345 computers and monitors ordered but not billed, or overpaid HP about $2.9 million for 6,386 computers and monitors billed but not received.

Auditors said that they recognize that the purchase of such a large quantity of computer equipment would be hard to manage. However, they said, "the SSA should have had a comprehensive system for tracking and reconciling equipment orders, delivery receipts, quantities invoiced, and asset inventory lists."

To avoid such a scenario in the future, the inspector general is recommending that for contracts involving large computer purchases, the SSA should develop such a system. Moreover, it should implement a system to electronically certify the receipt of specific types of components and quantities of computer equipment received and billed.

The SSA agreed with both recommendations and, since they are related, will address them with one solution, according to the report.

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