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January 30, 2015, Contact: Press Office (518) 474-4015

Comptroller DiNapoli Releases State Audits

New York State Comptroller Thomas P. DiNapoli announced today the following audits have been issued:

Office of Children and Family Services (OCFS): Management of Energy Consumption (Follow-Up) (2014-F-18)
An initial report issued in May 2013 determined OCFS officials were not effectively managing energy consumption and had not achieved the 35 percent energy reduction goals set forth in Executive Order 111. In a follow-up, auditors determined that OCFS has implemented both recommendations made in the initial report. OCFS has developed and implemented a centralized plan to reduce energy consumption and now retains energy usage data so reduction achievements can be measured appropriately.

Department of Environmental Conservation (DEC): Selected Aspects of Inactive Hazardous Waste Site Remediation Cost Recovery (2014-S-14)
Auditors found DEC has taken steps to improve its Superfund billing process and the timeliness of billing. However, bill preparation is a very time-consuming process and billing frequency for each site is about once a year at most. In addition, the bills do not include up-to-date costs, which delays recovery of some state costs until the next bill is prepared. Auditors reviewed 21 bills for eight sites and found they did not include the most recent three to seven months of site costs. They also looked up the amount of costs incurred but not billed for 14 of the 21 and found that the unbilled costs totaled $1.9 million.

Department of Health (DOH): Improper Managed Care Payments for Certain Medicaid Recipients (Follow-Up) (2014-F-7)
An initial audit report issued in July 2012 found Medicaid made $15.6 million in improper managed care payments on behalf of 14,899 recipients who, by state law, were precluded from enrollment in managed care programs. In a follow-up report, auditors found DOH officials made progress in addressing the problems identified in the initial audit. This included the recovery of $6.4 million in improper Medicaid managed care payments. However, further actions are still needed.

Metropolitan Transportation Authority (MTA): Contracts for Personal and Miscellaneous Services (Follow-Up) (2014-F-11)
An initial report issued in September 2009 determined that while the MTA's constituent agencies are required to determine whether services can be provided in-house before proceeding to contract, the agencies were not required to maintain documentation supporting the basis for this determination. Auditors also found such documentation was often not prepared. In addition, the MTA did not have a requirement to periodically assess whether existing personal and miscellaneous service contracts were still needed or whether they could be scaled-back to help reduce costs. Auditors estimated that by reducing personal and miscellaneous service contract costs by 10 percent, the MTA would save about $176 million in operating and capital-related expenses. In a follow-up, auditors found the MTA has made some progress in implementing the recommendations contained in the prior report but more work is needed.

New York State Health Insurance Program: United HealthCare: Improper Payments for Medical Services Designated By Modifier Code 59 (2013-S-82)
United's payments to medical providers are based, in part, on procedure codes billed on claims that indicate the medical services performed. United will not pay for certain procedure codes billed in combination with other procedure codes unless the provider includes a modifier code on the claim to further describe the services performed. Modifier 59 is used to indicate that a procedure that was distinct or independent from another procedure that was performed on the same day for the same patient. Auditors found that for 13 of the 245 claims tested, a distinct service was not provided despite the service's designation of modifier 59. The overpayments totaled $39,345. Using statistically valid methods, auditors estimate that United overpaid between $1.6 million and $5.2 million during the one-year period ending Aug. 31, 2013 because providers improperly applied modifier 59 to their claims.

Office of Parks, Recreation and Historic Preservation (OPRHP): Administration of Concession Services at Riverbank State Park: Tri-State Snacks & Concessions (2013-S-83)
Tri-State operates Riverbank's 150-seat restaurant under a five-year revenue contract with OPRHP that started in August 2010. The contract terms required Tri-State to remit a flat monthly fee and a percentage of annual sales revenues over $750,000 to OPRHP. Tri-State is required to maintain adequate books and records to support its revenue remittances. Auditors found Tri-State did not comply with all contract requirements, such as hours of operation and maintaining financial records. Tri-State owes OPRHP at least $10,485 in licensing fees and potentially as much as $37,034 in additional fees, as a result of underreported and possibly unreported sales revenue.

Office of Parks, Recreation and Historic Preservation Safety of Infrastructure (Follow-Up) (2014-F-16)
An initial audit report issued in September 2012 examined whether OPRHP was maintaining its infrastructure and properly inspecting and repairing hazardous conditions. Site visits confirmed that many infrastructure issues existed throughout the park system and, as of October 2010, there was a backlog of over $1.1 billion in improvements that needed to be made. In a follow-up report, auditors found that for fiscal years 2012-13 and 2013-14, OPRHP started or completed 204 projects with total costs over $221 million using New York Works funds. However, additional work is needed to safeguard the public in areas where potentially dangerous infrastructure problems remain unaddressed.

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