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NYS Comptroller

THOMAS P. DiNAPOLI

Department of Health (Department)
Examination of Island Peer Review Organization
(Issued: 09/14/2018)


Purpose

We examined select subcontractor expenses the Department of Health (Department) made to Island Peer Review Organization (IPRO) under contract C027596.  These expenses included more than $112,000 in administrative charges and nearly $180,000 in out-of-pocket expenses.  Our objective was to determine whether these subcontractor expenses were in compliance with the contract and related subcontractor agreements.


Background

The Department entered into a $79 million contract with IPRO to provide services related to Medicaid activities.  This contract and its amendments were not subject to approval by the Comptroller’s Office pursuant to Section 365-l of the Social Services Law.  IPRO entered into subcontractor agreements with five firms to help perform the services.  The Department used these agreements to monitor the subcontractor expenses.


Key Findings

We found the Department approved payments to IPRO for subcontractor expenses that were not allowable under the contract.  As a result of our audit, the Department prevented or recovered more than $133,000 in unallowable expenses.  The Department has since strengthened their review of similar contract payments.


Key Recommendations

  • Ensure Department only processes invoices containing allowable subcontractor expenses.


For a complete copy of Report 2018-BSE03-01, click here.


Division of Contracts and Expenditures
Bernard J. McHugh, Director of State Expenditures

Phone: (518) 474-4868 Email: stexpend@osc.state.ny.us
Address: Office of the State Comptroller, Division of Contracts and Expenditures
110 State Street, 10th Floor; Albany, NY 12236