January 16, 2021

Audits issued by the New York State Comptroller during the week ending January 15, 2021

New York State Comptroller Thomas P. DiNapoli announced the following audits of State departments and agencies and local governmental entities were issued during the week ending January 15, 2021.

Audits of State Departments and Agencies

Office for the Aging (OFA): Long-Term Care Ombudsman Program (Follow-Up) (2020-F-27) An audit issued in October 2019 found that certain system-generated office data may not have been sufficiently reliable for the agency’s use for analysis at the facility, regional program, or complaint level, which may limit its usefulness in decision making. Auditors also found that many residents of long-term care facilities lack regular access to ombudsman services, due in part to a decline in the number of volunteers combined with a lack of paid regional program staff. In a follow-up, auditors determined OFA has made significant progress in addressing the problems identified in the initial report.

Office of Children and Family Services (OCFS): Access Controls over Selected Critical Systems (Follow-Up) (2020-F-11)  An audit issued in March 2019 found that access controls over six OCFS systems containing confidential information were insufficient to prevent unnecessary or inappropriate access to those systems. In a follow-up, auditors found OCFS has made progress in correcting the problems identified in the initial report. Of the two recommendations OCFS officials implemented one and did not implement one.

Department of Civil Service: New York State Health Insurance Program: CVS Health - Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (Follow-Up) (2020-F-23) An audit issued in January 2019 reviewed the rebate revenue generated from agreements with six drug manufacturers and found that CVS Health did not always properly invoice drug manufacturers for rebates or remit all rebate revenue it collected. As a result, New York was due $2,052,653 in rebates. In a follow-up, auditors found CVS Health has made progress in correcting the problems and collecting some of the rebates identified in the initial report.

Department of Civil Service: New York State Health Insurance Program: Empire Plan Members with Dual Family Coverage (2019-S-23)New York state does not allow two family coverages for its employees. Other public organizations that participate in the Empire Plan, including local governments and public authorities, may allow for dual family coverage, whereby each employee has family coverage. Auditors identified 696 employees and retirees of participating organizations with dual family coverage during the audit period. The total cost of premiums to the members and participating organizations for the second family coverage was $39,777,772.

Department of Health (DOH): Improper Medicaid Payments for Childhood Vaccines (Follow-Up) (2020-F-3) An audit released in December 2018 identified $32.7 million in improper Medicaid payments, which included payments for free vaccines and inaccurate payments for the administration fee. Of this amount, managed care organizations made improper payments totaling $29.8 million, and the department made improper fee-for-service payments totaling $2.9 million. In a follow-up auditors found DOH has made some progress in addressing the problems identified in the initial audit report, yet significant action is still required to prevent future Medicaid overpayments.

State Education Department (SED): The Kelberman Center Inc. – Compliance with the Reimbursable Cost Manual (2019-S-57) Kelberman is an SED-approved special education provider located in Utica. Kelberman provides preschool special education services to children with disabilities who are between three and five years of age. Kelberman is reimbursed for these services through rates set by SED. For the fiscal year ended June 30, 2017, auditors identified $23,616 in ineligible costs Kelberman reported for reimbursement. 

State Education Department (SED): Kids Unlimited, PT, OT & SLP, PLLC - Compliance with the Reimbursable Cost Manual (2020-S-33)Kids Unlimited is a New York City-based for-profit organization authorized by SED to provide special education services. The New York City Department of Education refers students to Kids Unlimited. For the three fiscal years ended June 30, 2015, auditors identified $446,835 in reported costs that did not comply with the requirements for reimbursement. 

State Education Department (SED) Mama Program LLC – Compliance with the Reimbursable Cost Manual (2019-S-73) Mama Program is a New York City-based for-profit organization authorized by SED to provide preschool special education services. The New York City Department of Education refers students to Mama Program. For the three fiscal years ended June 30, 2015, auditors identified $95,562 in reported costs that did not comply with requirements for reimbursement.

State Education Department (SED): SteppingStone Day School Inc. - Compliance with the Reimbursable Cost Manual (2020-S-23) SteppingStone is a New York City-based not-for-profit organization authorized by SED to provide special education services. The New York City Department of Education refers students to SteppingStone. For the three fiscal years ended June 30, 2018, auditors identified $562,609 in reported costs that did not comply with the requirements for reimbursement.

Department of Taxation and Finance: Personal Income Tax and Property Tax (2020-BSE08-01) Auditors found 19,049 questionable or inappropriate refunds resulting in a savings of $34.9 million and 4,331 credits resulting in a savings of over $1.1 million. In addition, auditors identified 10,142 credits totaling $4.1 million where the department potentially paid more than one credit to the same individual on multiple properties, or paid credits to multiple individuals on the same property where only one credit was due.

 

Audits of Local Governmental Entities

Village of Dering Harbor – Payroll (Suffolk County)The board did not establish adequate controls over payroll and employee benefit payments. The board also did not require formal, written employment contracts to document terms of employment; job descriptions and responsibilities; work hours; salaries or hourly rates and employee benefits. In addition, the village paid overtime payments to employees as if they were independent contractors. Auditors also found the board approved reimbursements to employees for medical benefit claims without ensuring they had adequate supporting documentation.

 

Madison County – Temporary Courthouse Lease and Renovations County officials paid more than $1.5 million to a limited liability company (LLC) to lease and renovate temporary courthouse space for a 19-month period. Auditors found county officials did not use a competitive process to lease and renovate the temporary courthouse space. Auditors determined officials paid the LLC a $500,000 deposit before any renovation work was completed or services rendered. They paid approximately $131,000 in renovation claims to the LLC without adequate supporting documentation.

 

Town of Orange – Budget Review (Schuyler County)Certain significant revenue and expenditure projections in the town’s adopted budget for the 2021 fiscal year are not reasonable. Auditors’ review took into consideration the potential impact the COVID-19 pandemic may have on the town’s finances. They determined the general and highway fund revenues are potentially overestimated by $25,000. In addition, highway fund appropriations are underestimated by at least $17,900.The general fund’s 2020 ending fund balance is estimated at $64,000, which is sufficient to balance the 2021 budget. However, additional fund balance may be needed to replace revenue shortfalls and to supplement the highway fund. The deficit in the highway fund is estimated at $27,000 as of Dec. 1, 2020. The town’s 2021 adopted budget complies with the tax cap limit.

 

Village of Remsen – Clerk-Treasurer’s Records and Reports (Oneida County) The clerk-treasurer did not maintain adequate records and reports to allow the board to properly manage village finances. Required annual financial reports were not completed or filed with the State Comptroller’s Office for any of the last four years (2015-16, 2016-17, 2017-18 and 2018-19). Fund transfers were not properly recorded and inadequate financial reports were provided to the board. In addition, the board did not annually audit the clerk-treasurer’s records and reports, as required.

 

 

 

 

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