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Saturday, April 22, 2017

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 22, 2017


New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 22, 2017
Source: Office of the State Comptroller

Links to material posted on the Internet highlighted in COLOR


New York State Comptroller Thomas P. DiNapoli and Queens District Attorney Richard A. Brown announced that Rabbi Samuel Hiller, the former assistant director of Island Child Development Center, once one of New York City's largest providers of special education services to pre-schoolers with disabilities, pleaded guilty to stealing $5 million in city and state funding between 2005 and 2012—money that was intended for special needs students between ages three to five.


Volunteer Fire Company Treasurer alleged to have embezzled over $55,000 of the fire company's funds for personal use

On April 18, 2017, Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman announced the arrest and arraignment of Gail E. Cesternino, for allegedly embezzling over $55,000 from the West Ghent Volunteer Fire Company. The indictment  charges Cesternino with Grand Larceny in the Second Degree and thirteen counts of Falsifying Business Records in the First Degree. It should be remembered that these charges against Cesternino are merely accusations and she is presumed innocent unless and until proven guilty in a court of law.

According to the Indictment and papers filed in court on April 18, 2017, Cesternino is alleged to have used her position as the Fire Company's Treasurer to regularly withdraw cash, issue herself checks and charge personal expenses on the Fire Company's credit card, including purchases for her personal sales business.

The indictment is the result of an investigation conducted by the State Comptroller's Office Division of Investigations and the Attorney General's Public Integrity Bureau.

This case is the latest joint investigation under the Operation Integrity partnership of the Attorney General and Comptroller, which to date has resulted in dozens of convictions and more than $11 million in restitution.

The Comptroller's investigation was conducted by the Comptroller's Division of Investigations working with the Division of Local Government and School Accountability.

Assistant Attorney General Bridget Holohan Scally of the Attorney General's Public Integrity Bureau is prosecuting this case under the supervision of Public Integrity Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz.

This matter was investigated by the State Comptroller's Division of Investigations, along with Mark Spencer of the Attorney General's Investigators Bureau, which is led by Deputy Chief Antoine Karam and Chief Dominick Zarrella. Legal Analyst Sara Pogorzelski worked on the matter as well.

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.


Department of Audit and Control auditors halt payment of suspicious 2016 tax refunds

On April 17, 2017, State Comptroller Thomas P. DiNapoli announced that his office stopped $21.3 million in questionable or fraudulent personal income tax refunds from being paid so far in 2017.

DiNapoli’s office paid out 4.6 million state refunds totaling $4.4 billion to date. Another 471,000 refunds totaling $466 million are expected to be paid in the coming days.

The Comptroller said: “My auditors are committed to safeguarding the funds of honest New Yorkers ... [w]e’ll stay one step ahead of the schemes used by tax cheats, and look to ensure only legitimate refunds are paid.”

DiNapoli’s office audits New York state personal income tax refunds prior to payment. The Comptroller’s auditors work cooperatively with the Department of Taxation and Finance to stop questionable refunds and to ensure timely payment of legitimate refunds. DiNapoli’s auditors perform their review after the department completes its own tax return audit.

The majority of questionable refunds stopped were for returns filed by taxpayers who claimed refundable credits based on incorrect information such as fake or inflated dependents or understated income. Auditors also stopped over $2.2 million in refunds that were linked to unscrupulous tax preparers filing false returns. Other popular scams include using questionable social security numbers and intentionally misstating deductions. 


Municipal Audits released

New York State Comptroller Thomas P. DiNapoli announced his office completed audits of the

Village of Endicott -- Budget Review

Village of Hempstead – Budget Review

Town of Hoosick -- Departmental Cash Collections and Sales Tax Allocation

Town of Lake Pleasant – Credit Cards  

Town of Newfane – Supervisor's Financial Records and the

Village of Sandy Creek – Cash Receipts and Disbursements


New York State Comptroller announced the release of the following State Audits

An initial audit issued in February found that OITS did not have established policies and procedures for backup of key division systems. In a follow-up, auditors found OITS officials have made some progress in correcting the problems identified in the initial report. However, improvements are still needed.

DASNY has implemented appropriate controls to meet its specific prevailing wage responsibilities,. However, although DASNY project managers and field representatives visited construction projects, they did not routinely inspect the sites to ensure that prevailing wage rates were posted, as required.

Auditors found DOCCS has appropriate procedures in place to ensure that it accurately determines inmate release dates. Tests of sentencing calculations for a sample of 60 inmates found proper procedures were followed in all the cases selected, and the sentences were accurately calculated. However, DOCCS records showed that during the audit period five inmates were released between two weeks and 12 months early because department procedures were not followed.

An initial audit issued in September 2014, examined whether the loans awarded by HPD under the Article 8-A Loan Program were being used only for qualified projects and their intended purpose and whether loan recipients were complying with the requirements of their loans with respect to correcting violations and making other needed repairs. In a follow-up, auditors determined HPD officials made little progress addressing the problems identified in the initial audit report and additional actions are still needed.

During the 2013-14 school year, Spotted Zebra provided three SED-funded, rate-based preschool special education programs to 43 children from school districts located in Albany, Columbia, Rensselaer, and Saratoga counties. For the three years ended June 30, 2014, Spotted Zebra reported over $2.5 million in reimbursable costs for the rate-based preschool special education programs it operated. Auditors found that the personal service costs tested were in compliance with SED’s requirements. However, they identified $13,058 in other than personal service costs that Spotted Zebra that did not comply with SED’s prescribed requirements for reimbursement.

During the 2013-14 school year, ACDS provided four SED-funded, rate-based preschool special education programs to 213 children from school districts located in Nassau, Queens, and Suffolk counties. For the fiscal year ended June 30, 2014, ACDS reported $4,752,257 in reimbursable costs for the rate-based preschool special education programs it operated. For the fiscal year ended June 30, 2014, the personal service costs claimed by ACDS that were tested were in compliance with SED’s requirements. However, auditors identified $30,104 in other than personal service costs that did not comply with SED’s prescribed requirements for reimbursement.

North County provides preschool special education services to children with disabilities who are between three and five years of age. North Country is reimbursed for preschool special education services through rates set by SED. For the two fiscal years ended June 30, 2014, North Country reported $2.6 million in reimbursable for the rate-based preschool special education programs it operated. For the two years ended June 30, 2014, auditors identified $79,084 in ineligible costs that North Country reported for the programs. The ineligible costs included: $69,272 in other than personal service costs and $9,812 in personal service costs.

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