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NYS Comptroller



From the Office of the New York State Comptroller

Thomas P. DiNapoli

June 13, 2017, Contact: Press Office (518) 474-4015

State Comptroller DiNapoli Releases State Audits

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

Department of Health: Fiscal Oversight and Monitoring of AIDS Institute Service Provider Contracts (2016-S-30)
The AIDS Institute has taken several steps to update its procedures to address problems with contractor cost claims that were identified prior to this audit. However, the institute needs to further improve its internal controls to provide effective oversight and monitoring, and ensure that claimed contractor expenses are program appropriate and consistent with contract requirements.

Department of Health (DOH): Criminal History Background Checks of Unlicensed Healthcare Employees (2016-S-65)
DOH is generally meeting its obligations for conducting background checks on unlicensed employees of nursing homes, adult care facilities (ACF), and home health care (HHC) providers, according to state requirements. However, auditors identified 24 criminal history record check applicants whose determination letters were not completed on time. As a result, the individuals could have been allowed to work for periods ranging from 2 months to as long as 28 months. Of these, auditors found only eight applicants (who were ultimately denied eligibility) actually worked on a provisional basis, for periods between 3 and 14 months while their background checks were pending.

Housing Finance Agency and Homes and Community Renewal: The 80/20 Housing Program (2015-S-83)
The 80/20 program provides low-interest financing to multifamily rental developers who commit to designating at least 20 percent of a development's units to low-income households. Based on the rents charged and the regulatory agreements for our four sampled developments, auditors concluded that the proper numbers of affordable apartment units were made available to low-income tenants. However, auditors found higher earners with apartments and several areas that could use improvement.

New York State Health Insurance Program: United HealthCare (UHC): Insurance Company of New York Empire Plan Drug Rebates (Follow-Up) (2017-F-6)
An initial audit report issued in December 2015, identified $710,284 in rebate revenues from agreements with 114 drug manufacturers that were not credited to the state Department of Civil Service from Jan. 1, 2011 through Dec. 31, 2013. In a follow-up report, auditors found UHC officials made progress in addressing the issues identified in the initial audit. This included the remittance of $338,649 in drug rebate revenue to Civil Service. In addition, UHC officials agreed to remit another $67,386 in rebate revenues.

New York State Health Insurance Program: UnitedHealthcare: Empire Plan Drug Rebate Revenue (Follow-Up) (2017-F-5)
An initial audit report issued in November 2016, found that UHC did not remit $1,498,719 in drug rebate revenue to the Department of Civil Service as it was required to do during from Jan, 1, 2010 through Dec. 31, 2013. In a follow-up, auditors found UHC officials had remitted the rebate revenue to Civil Service.

Port Authority of New York and New Jersey: New York City Airport Lease (2014-S-28)
Based on testing, auditors found the Port Authority complied with the terms related to base rent payments to the city. However, the Port Authority had not fully complied with the terms of the ancillary agreements, which included an obligation to provide information and support to the Airport Board.

State Education Department: Elmcrest Children's Center Inc., Compliance with the Reimbursable Cost Manual (2016-S-62)
For the fiscal year ended June 30, 2014, Elmcrest claimed $54,250 in ineligible costs for the rate-based preschool special education program that it operated. The ineligible costs included: $18,264 in personal service costs, including bonuses and employee fringe benefits; $16,578 in overstated expenses; $12,911 in improperly allocated costs; and $6,497 in other than personal service costs, including undocumented vehicle costs, ineligible consulting services costs and non-reimbursable auditing fees. Elmcrest did not disclose related-party transactions with two vendors as required.

New York City Department of Probation: Oversight of Persons Convicted of Driving While Intoxicated (Follow-Up) (2016-F-30)
An initial audit report issued in October 2015 found that for the period from January 1, 2015 to December 31, 2016, the courts ordered the installation of 1,084 Ignition Interlock Devices (IIDs) for offenders under the Probation Department's supervision. Auditors found only a small percentage of the IIDs were installed in the cars of persons cited for alcohol-related motor vehicle violations and that probation officers often did not provide sufficient oversight of DWI offenders. Auditors also found that referral of probation violators were not made to the appropriate courts and district attorneys as required. In a follow-up, auditors found that probation officials made considerable progress in correcting the problems that were identified. However, additional improvements are still needed.

State Education Department: Variety Child Learning Center, Compliance with the Reimbursable Cost Manual (2016-S-77)
Variety, a not-for-profit organization located in Syosset, is a provider of special education services. Variety offers a range of special education services and programs to children with disabilities from birth to eight years of age. For the fiscal year ended June 30, 2014, auditors identified $6,719 in other-than-personal-service costs that did not comply with the requirements for state reimbursement.

Department of Taxation and Finance: Personal Income Tax Refunds (2016-1A-001)
During 2016, the tax department processed almost 7.6 million refunds totaling over $9.6 billion. After the tax department processes refunds, DiNapoli's office is charged with serving as a second set of eyes to ensure that only proper refunds are paid. Auditors returned 12,335 refunds totaling almost $43.9 million to the department that it had approved for payments. DiNapoli's auditors found red flags and other questionable information that led them to determine that the refunds were fraudulent or inappropriate.

Worker's Compensation Board: Annual Audit
Auditors identified $1,224,077 in inappropriate claims. They also identified two high-dollar outlier claims that resulted in $2,633,204 in total savings. For these claims in particular, board staff members entered incorrect data in fields used to calculate the payment amount resulting in artificially higher amounts to be paid. Auditors also reviewed claims processed by the board on a post payment basis to identify potential duplicate payments. For calendar year 2016, they identified 210 potential duplicate payments totaling $344,000.

For access to state and local government spending, public authority financial data and information on 130,000 state contracts, visit Open Book New York. The easy-to-use website was created to promote transparency in government and provide taxpayers with better access to financial data.

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