December 1, 2021

Audits and reports recently issued by the New York State Comptroller

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

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

STATE DEPARTMENTS AND AGENCIES

Division of Criminal Justice Services: Monitoring and Administration of Public Protection Grant Programs (Follow-Up) (2021-F-21)

An audit released in April 2020 found that the Division had adequately administered and monitored the Gun Involved Violence Elimination (GIVE) and SNUG (“guns” spelled backward) grant program contracts reviewed to ensure that the related grant expenses were supported and allowable under the contracts. Auditors identified one exception related to documentation of the authorization or receipt of confidential funds. Since the initial audit, the division reduced and ultimately eliminated confidential funds from its GIVE contract awards. As such, the recommendation from the initial audit is not applicable.

 

New York City Department of Information Technology and Telecommunications (DoITT): Controls Over and Revenues From .nyc Generic Top-Level Domains (2020-N-3)

A top-level domain (TLD) is the last part of an Internet address, such as .com, .net, or .org. In March 2012, DoITT entered into a franchise agreement with a vendor to apply for the “.nyc” generic TLD (gTLD) and to operate, manage, maintain, and market the .nyc gTLD program. Auditors found DoITT collected only one of the four agreed-upon revenue sources in the city’s contract with the vendor during the audit scope and amended the contract several times with no supporting documentation explaining why. Auditors also found DoITT’s Franchise Administration Team, tasked with managing the contract and collecting the revenue from the vendor, did not monitor or require the registry operator’s compliance with the contract. 

 

New York State Health Insurance Program (NYSHIP): CVS Health – Accuracy of Drug Rebate Revenue Remitted to the Department of Civil Service (Follow-Up) (2021-F-18)

An audit issued in August 2020 found CVS Health did not collect and remit all rebate revenue that it invoiced to drug manufacturers for rebate-eligible prescription drug claims paid on behalf of the Empire Plan, the primary health benefits plan for NYSHIP; therefore, Civil Service did not receive $453,029 in rebate revenue for the period of Jan. 1, 2014 through Dec. 31, 2018. In a follow-up, auditors determined CVS Health has made progress in addressing the problems identified in the initial audit.

 

State Education Department (SED): E&D Children Center, Inc. – Compliance With the Reimbursable Cost Manual (2020-S-44)

E&D is a New York City-based organization approved by SED to provide preschool Special Education Itinerant Teacher services to children with disabilities who are between the ages of 3 and 5 years. The New York City Department of Education refers students to E&D and pays for its services using rates established by SED. For the three fiscal years ended June 30, 2015, auditors identified $711,676 in reported costs that did not comply with requirements for reimbursement.

 

Multiple Agencies: Improving Government Efficiency and Effectiveness (2021-D-2)

The report summarizes select audits that highlight SGA’s efforts to promote fiscal responsibility and brings renewed attention to ideas that could result in cost savings or revenue enhancements for the State and New York City. The audits, all released within the past five fiscal years, demonstrate significant financial impact. The issues and risks they identified should inform agencies with similar programs on improving efficiency in their own operations and strengthening internal controls to prevent excess costs.

 

Inappropriate Medicaid Payments

State Comptroller Thomas P. DiNapoli released three reports that found more than $100 million in improper payments made by the Department of Health (DOH) for the Medicare buy-in program, maternity care, and drug and therapy claims. Nearly $400,000 in premiums may have been paid for deceased individuals.

“The Medicaid program provides critical health care services to millions of New Yorkers but the program is dogged by oversight problems and payment errors,” DiNapoli said. “Over the years, we’ve uncovered billions of dollars of waste and abuse in the system. DOH should act on our recommendations to ensure significant unnecessary expenses and preventable mistakes don’t end up costing taxpayers.”

The New York State Medicaid program is administered by DOH and is a federal, state, and local government funded program that provides a wide range of medical services to economically disadvantaged populations, including low-income children and their families, seniors, and people with disabilities. As of March 2021, New York’s Medicaid program had approximately 7.3 million recipients and claim costs totaled more than $68 billion.

 

Improper Medicare Payments

The first audit released today looked at Medicaid recipients who are also enrolled in Medicare. Under the Medicare buy-in program, Medicaid pays Medicare premiums for individuals who meet buy-in program eligibility requirements. Auditors found Medicaid made $31.7 million in improper Medicare premium payments from Jan. 1, 2015 through Dec. 31, 2019 for 42,586 individuals. Medicaid also paid $372,716 in Medicare premiums for 282 individuals identified as deceased. Auditors found Medicaid paid $23.6 million in premiums for 3,439 individuals who were automatically added to the buy-in program with coverage beginning more than two years retroactively, despite limitations on this.

 

Questionable Managed Care Payments

The second audit released examined Medicaid recipients who receive their services through managed care. DOH pays managed care organizations (MCOs) a monthly premium for each enrolled recipient and, in turn, the MCOs pay for services their members require. MCOs can also receive a one-time Supplemental Maternity Capitation Payment (SMCP) for prenatal and postpartum physician care and delivery costs. However, MCOs are not eligible to receive SMCPs for maternity cases that end in termination or a miscarriage.

Auditors identified approximately $55 million in improper and questionable SMCPs to MCOs from Aug. 1, 2015 to July 31, 2020. They found $29.1 million was paid without the required supporting data; $23.4 million was paid where the data or other evidence indicated the maternity case ended in termination or miscarriage; and $2.4 million was paid when the SMCP date of service preceded the birth by one to six months.

 

Overpayments for Prescription Drugs

A report released in October 2019 examined payments made for prescription drugs and therapy services. It found Medicaid paid $20.1 million for services that should have been paid by Medicare. The payments included $18.6 million for physical, occupational, and speech therapy services, and $1.5 million for prescription drugs. A follow-up report released today found DOH made some progress in addressing the prior problems identified; however, since the initial audit, auditors identified another $17.7 million in payments that should have been paid by Medicare.

DOH generally agreed with many of the recommendations that DiNapoli’s auditors provided in each audit. Read DOH’s responses in the reports.

 

Audits

Department of Health Medicaid Program: Improper Payments of Medicare Buy-In Premiums for Ineligible Recipients

Department of Health Medicaid Program: Improper Supplemental Maternity Capitation Payments to Managed Care Organizations

Department of Health Medicaid Program: Overpayments for Therapy Services and Prescription Drugs Covered by Medicare (Follow-Up)

 

New York Needs to Improve Cybersecurity Support to Local Governments and Public Authorities  

 New York State Comptroller Thomas P. DiNapoli released an audit that found the Division of Homeland Security and Emergency Services cannot assure the critical cybersecurity support they are providing to state agencies, local governments, and public authorities through their Cyber Incident Response Team is achieving the desired outcomes or is targeting the appropriate customers and their needs.

NYS Common Retirement Fund Reports Second Quarter Results

The New York State Common Retirement Fund’s estimated return in the second quarter of the State Fiscal Year 2021-22 was 1.15% for the three-month period ending
Sept. 30, 2021, according to New York State Comptroller Thomas P. DiNapoli. It ended the quarter with an estimated value of $267.8 billion.

DiNapoli Urges NYC to Shore Up Rainy-Day Fund

In a report released this week, New York State Comptroller Thomas P. DiNapoli urged New York City officials to better prepare for financial downturns by evaluating the city’s rainy-day reserve fund, establishing targets for how much should go into the fund each year and setting the conditions for withdrawals. His report found the city’s reserve policies are not as robust as other large U.S. cities, and with recent changes in state and local law enabling the use of these funds, called on the city to define how these resources are accumulated and used.

NYS Comptroller DiNapoli and the Fire and Police Pension Association of Colorado Statements on Proposed Settlement of Boeing Lawsuit

New York State Comptroller Thomas P. DiNapoli and the Fire and Police Pension Association of Colorado (FPPA) issued statements regarding the proposed settlement of their derivative lawsuit against the directors of The Boeing Company. State Comptroller DiNapoli, as trustee of the New York State Common Retirement Fund, and the FPPA were appointed co-lead plaintiffs in the lawsuit.

State Comptroller DiNapoli and Orange County District Attorney Hoovler Announce Guilty Plea in Bethel Tax Collector Pension Fraud Case

State Comptroller Thomas P. DiNapoli and Orange County District Attorney David M. Hoovler announced that former Town of Bethel Tax Collector Debra Gabriel, of Bethel, pleaded guilty before Judge Peter Feinberg in the Town of Rockland Justice Court to Offering a False Instrument for Filing in the Second Degree, in connection with a scheme to defraud the New York State and Local Retirement System. Gabriel, 62, had resigned her public office and retired in August 2020.

 

 

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