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NYS Comptroller


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May 20, 2015, Contact: Press Office (518) 474-4015

DiNapoli: Contractor Charged State for Booze & Sunset Cruise

Inappropriate Charges Topped $152,000

Mental health provider PSCH, Inc. charged $152,680 in unsubstantiated or unallowable costs to the state Office of Mental Health (OMH) including alcohol and a sunset cruise at a conference at the Montauk Yacht Club Resort & Marina, and more than $22,000 for a staff picnic, according to an report released today by State Comptroller Thomas P. DiNapoli.

“The rules for conference costs are clear,” DiNapoli said. “And lavish parties with alcohol, cruises and extra guests are not allowable. State agencies must make sure that contractors are reimbursed for legitimate expenses only.”

PSCH had a five-year, nearly $30 million contract with OMH to provide services and housing to persons with mental disabilities and substance abuse. The provider claimed $152,680 in costs that could not be substantiated or are not allowable under the contract, DiNapoli found. That included $31,908 for directors and executive staff to attend a two-day conference at the Montauk Yacht Club Resort and $22,901 for a staff picnic. 

While at the resort, PSCH charged $10,723 for alcohol, $5,064 for extra guests, $13,378 for post-conference lodging and $2,743 for a sunset cruise, tips and gifts.

PSCH also charged nearly $98,000 for other duplicate, unsubstantiated or inappropriate charges. 

In response to the Comptroller’s report and recommendations, OMH officials agreed to recover program overpayments where appropriate and ensure that PSCH staff receives training to recognize unallowable costs such as alcohol and entertainment.

Read the report:


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