November 5, 2021

Audits and reports issued during the week ending November 5, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued during the week ending November 5, 2021. 

Click on the text highlighted in color to access the complete audit report.

 

STATE DEPARTMENTS AND AGENCIES

New York State Health Insurance Program (NYSHIP): UnitedHealthcare: Improper Payments for Acupuncture and Acupuncture-Related Services (2020-S-7) NYSHIP, administered by the Department of Civil Service, provides health insurance coverage to over 1.2 million active and retired state, participating local government, and school district employees, and their dependents. The Empire Plan is the primary health benefits plan for NYSHIP. Civil Service contracts with UnitedHealthcare Insurance Company of New York (United) to administer the medical/surgical portion of the Empire Plan and process and pay claims submitted by health care providers. We identified $7,331,458 in actual and potential overpayments for services not supported by provider documentation and for duplicate payments during our audit period of the period from Jan. 1, 2015 through Dec. 31, 2019. 

 

Metropolitan Transportation Authority (MTA) - New York City Transit: Maintenance and Inspection of Event Recorder Units (ERUs) (Follow-Up) (2021-F-14) ERUs or “black boxes” are a valuable safety feature that allow for the monitoring of the train equipment and technical analysis of incidents/accidents based on data they record. An audit issued in July 2019, found the MTA was not in compliance with its ERU maintenance and inspection policy. For instance, train car inspections were not always done timely, and for 129 inspections, maintenance personnel did not provide evidence that they downloaded information from ERUs to ensure that they were functioning correctly, as required by work manuals. In a follow-up, auditors found that MTA officials have made progress in addressing the issues identified in the initial report. 

 

Metropolitan Transportation Authority (MTA) - Bridges and Tunnels: Efforts to Collect Tolls and Fees Using License Plate Images and Law Firms (Follow-Up) (2021-F-15) An audit issued in 2018 of the MTA’s collections during the pilot run of Cashless Tolling at the Henry Hudson Bridge found that the MTA did not maximize toll collection because license plate images could not always be processed, resulting in potential lost revenue of $2.4 million. Additionally, the authority’s contracted law firms were not effective in collecting outstanding receivables from persistent toll violators. In a follow-up, auditors determined that MTA officials made progress in addressing the issues identified in the initial report but noted that after the MTA’s system-wide roll out, both the dollars lost through leakage and the percentage of unbilled transactions increased. From September 2019 to June 2021, the MTA had more than six million unbilled tolls, with an estimated loss of $55.7 million.  

 

Multi-Agency: Compliance With Executive Order 95 - Achieving Transparency and Citizen Engagement Through Open Data (2021-D-1) Auditors conducted a series of reports to examine state agencies’ compliance with EO 95 to improve accountability and support continuous improvement of Open Data, increasing its benefits to the public and government entities. OSC audited Open Data compliance at the Department of State, Office of General Services, Olympic Regional Development Authority, Department of Environmental Conservation, and Office of Parks, Recreation and Historic Preservation. Compliance with EO 95 requirements varied across the five agencies audited. OSC determined that most agencies were not in full compliance with EO 95, and that data was not always reliable or easily usable, limiting its value. 

 

State Education Department (SED) (Preschool Special Education Audit Initiative): Omni Childhood Center, Inc. - Compliance With the Reimbursable Cost Manual (2021-S-66) Omni is a New York City-based proprietary organization authorized by SED to provide preschool Special Education Itinerant Teacher services to children with disabilities who are between the ages of 3 and 5 years. For the three fiscal years ended June 30, 2015, auditors identified $1,588,037 in reported costs that did not comply with state requirements for reimbursement. 

 

Division of State Police: Processing of Sexual Offense Evidence Collection Kits (Follow-Up) (2021-F-19)An audit issued in May 2020 found that from Nov. 28, 2017 to Oct. 31, 2019, state police processed 1,656 kits, but only 356 of them were completed within the time frames prescribed by law. Also, as of Oct. 31, 2019, state police had 1,916 unprocessed kits, and the required processing time frame had elapsed for 1,681 of them. During the audit, the division had taken steps to speed up kit processing; however, it was not able to meet the required time frames. In a follow-up, auditors found the division implemented the recommendation made in the initial report, resulting in significant progress in addressing the issues identified. 

 

Department of Taxation and Finance - Department of Administration and Collection of Real Estate Transfer Taxes (RETT) (Follow-Up) (2021-F-10) An audit issued in January 2019 found that the department had – with certain exceptions – adequate systems and practices in place that allowed it to effectively administer and collect RETT, however, nearly all counties submitted RETT information in hard copy form at the time of the audit, of which only a small portion was entered into an electronic system and capable of being analyzed. Auditors also identified certain RETT errors in one of the department’s internal systems. In a follow-up, auditors found the department has made significant progress in addressing the issues identified. 

 

Department of Taxation and Finance: Sales Tax Vendor Registration Practices (2020-S-40) The state share of sales and use tax collections is the second largest tax amount collected annually. Taxable online sales have been rising with an acceleration of such sales during the pandemic, with large retailers as well as online marketplaces reporting growth. Auditors examined whether the Department of Taxation and Finance has taken steps to ensure that persons who are required to register as sales tax vendors, including those with no physical presence in the state, have done so. Auditors identified vendors that were denied a certificate of authority (COA) to collect sales taxes, yet continued to operate and likely made taxable sales, as well as unregistered vendors that submitted sales tax returns showing taxable sales. For the two samples of 50 and 43 vendors tested in these areas, auditors identified 18 vendors that reported taxable sales, or were potentially making taxable sales, without a valid COA. These 18 vendors may have been subject to penalties totaling up to $180,000. These findings were attributable, in part, to the lack of information-sharing among the department’s divisions and the lack of relevant follow-up. 

 

Department of Transportation (DOT): Controls Over Vehicle Use and Transportation-Related Expenses (2019-S-37)DOT has not established adequate controls to effectively monitor and ensure accountability over maintenance expenses. DOT performs limited to no central monitoring of procurements made through the contractor and has not determined if the contractor is complying with contract terms, despite central office and regional office managers’ concerns. The department could also improve controls over recalls, warranties, and oversight of fuel and mileage usage. 

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