On February 12, 2024, New York State Comptroller Thomas P. DiNapoli announced the following audit reports of State Departments and Agencies were issued.
Click on the text highlighted in color to access both the summary and the complete audit report
New York State Dental Insurance Program – EmblemHealth
Plan, Inc. – Overpayments for Services Requiring Coordination of Benefits
(2022-S-27)
The Department of Civil Service contracts with EmblemHealth Plan, Inc. (Emblem)
to process and pay claims for services on behalf of the New York State Dental
Insurance Program. To prevent duplicate payment of services, health insurance
companies use a process called coordination of benefits for paying health care
claims when an individual is covered by more than one insurance plan. Auditors
identified $492,061 in overpayments for services processed with coordination of
benefits for the audit period, January 2018 through October 2022, because
Emblem failed to correctly coordinate benefits with each member’s other
subscriber plan.
Department of Health – Medicaid Program – Recovering Managed Care
Overpayments for Pharmacy Services on Behalf of Recipients With Third-Party
Health Insurance (Follow-Up) (2023-F-27)
Many of the State’s Medicaid recipients receive their services through managed
care and also have other third-party health insurance. Managed care
organizations (MCOs) are required to coordinate benefits with recipients’
third-party health insurance prior to paying for Medicaid services. The Office
of the Medicaid Inspector General (OMIG) contracts with Health Management Systems,
Inc. (HMS) to identify and recover Medicaid payments that should have been paid
for by third-party health insurance. A prior audit, issued in July 2022,
determined that the Department of Health (DOH) and OMIG lacked adequate
oversight of the third-party liability recovery process. HMS had not billed
third-party health insurance carriers for the recovery of about $292 million in
pharmacy claims that MCOs paid as the primary insurance for recipients who,
according to the Medicaid claims processing system, had third-party health
insurance drug coverage. The follow-up found that, of the initial report’s six
audit recommendations, three were partially implemented and three were not
implemented.
Department of Motor Vehicles – Assessable Expenses of
Administering the Motor Vehicle Financial Security Act and the Motor Vehicle
Safety Responsibility Act for the State Fiscal Year Ended March 31, 2023
(2023-M-1)
The Motor Vehicle Financial Security Act and the Motor Vehicle Safety
Responsibility Act help ensure that the operators of motor vehicles driven in
New York State possess adequate insurance coverage, or are financially secure,
to compensate those persons they might injure or whose property they might
damage as a result of an accident. The Department of Motor Vehicles is
responsible for tracking the expenses of administering the acts and assessing
these expenses on insurance carriers that issue policies or contracts of
automotive bodily injury insurance. Auditors found that the expenses for
administering the acts for the State Fiscal Year ended March 31, 2023 totaled $25.5 million.
New York Racing Association – Purchasing and Procurement Practices
(Follow-Up) (2023-F-31)
The New York Racing Association, Inc. (NYRA), a not-for-profit corporation that
holds the exclusive franchise rights to operate New York State’s three major
thoroughbred racetracks, entered into a bankruptcy settlement agreement in
September 2008, conveying all rights, titles, and interests in its racetracks
to the State. In return, the State forgave nearly all of NYRA’s debt
obligations and a Franchise Oversight Board was established to oversee NYRA’s
financial operations. A prior audit, issued in March 2022, found that NYRA
needed to improve its monitoring and oversight of its purchasing and
procurement process to promote sufficient competition. The follow-up found that
of the initial report’s eight audit recommendations, three were implemented,
two were partially implemented, and three were not implemented.
New York City Department of Education – Compliance With
School Safety Planning Requirements (Follow-Up) (2022-F-32)
The New York State Safe Schools Against Violence in Education (SAVE) Act was
signed into law in 2000 to promote a safer and more effective learning
environment within State schools. Further, the Education Law requires schools
and school districts to take safety planning actions and the State Education
Department Commissioner’s Regulations and DOE Chancellor’s Regulations provide
additional guidance. For example, the New York City Department of Education’s
(DOE) District Safety Team must develop a comprehensive district-wide school
safety plan and DOE’s schools must develop school-specific emergency response
plans. A prior audit, issued in June 2019, determined that DOE could improve
its compliance with the school safety planning requirements. The follow-up
found that, of the initial report’s 19 recommendations, nine were implemented,
four were partially implemented, and six were not implemented.
New York City Department of Buildings – Oversight of Building
Construction Site Safety (Follow-Up) (2023-F-32)
The New York City Department of Buildings (DOB) is responsible for regulating
the safe and lawful use of buildings and construction sites to promote the
safety of all people who visit, live, and work in NYC. A prior audit, issued in
September 2022, found that DOB’s oversight of building construction sites and
enforcement activity needed to be improved to ensure that responsible parties
report all building construction site incidents and comply with codes, rules,
and regulations. Additionally, DOB’s enforcement activities provided limited
assurance that immediately hazardous conditions identified by DOB were being
addressed in a timely manner. The follow-up found that, of the initial report’s
six recommendations, two were implemented, one was partially implemented, and
three were not implemented.
New York City Department of Social Services – New York City Department of
Homeless Services – Oversight of Contract Expenditures of Samaritan Daytop
Village, Inc. (2022-N-6)
The New York City Department of Homeless Services (DHS), a unit of the New York
City Department of Social Services (DSS), is responsible for providing
transitional housing and services for eligible homeless families and
individuals in New York City (City) and for providing fiscal oversight of the
homeless shelters. In July 2013, DHS contracted with Samaritan, a City-based
not-for-profit organization, to provide services for men with mental illness at
their 160-bed Myrtle Avenue Men’s Shelter (Myrtle) for the period from August
2013 to June 2018. To qualify for reimbursement, Samaritan’s expenses must
comply with the DHS Human Service Providers Fiscal Manual, the New York City
Health and Human Services Cost Policies and Procedures Manual, and the Myrtle
contract. The audit found that DHS is not effectively monitoring its contract
with Samaritan to ensure reported costs are allowable, supported, and program
related. For the two fiscal years ended June 30,
2021, auditors identified $566,556 that did not comply with
requirements.
About the New York State Common Retirement Fund
The New York State Common Retirement Fund [Fund] is one of the largest public pension funds in the United States. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.
On February 03, 2024, Comptroller DiNapoli announced that the estimated value of the Fund was $259.9 billion at the end of the third quarter of state fiscal year 2023-24. For the three-month period ending Dec. 31, 2023, Fund investments returned an estimated 6.18%.
“The markets have seen an improvement over the past quarter, but some volatility remains,” DiNapoli said. “Economic opinions are mixed about the year ahead and uncertainty persists. Still, thanks to our prudent management and long-term strategy, our pensioners and members can remain confident that their pension benefits are safe.”
The Fund's value reflects retirement and death benefits of $4.2 billion paid out during the quarter. Its audited value was $248.5 billion as of March 31, 2023, the end of last state fiscal year.
As of Dec. 31, the Fund had 41.84% of its assets invested in publicly traded equities. The remaining Fund assets by allocation are invested in cash, bonds, and mortgages (22.62%), private equity (14.75%), real estate and real assets (13.30%) and credit, absolute return strategies, and opportunistic alternatives (7.49%).
The Fund’s long-term expected rate of return is 5.9%.
DiNapoli initiated quarterly performance reporting by the Fund in 2009 as part of his on-going efforts to increase accountability and transparency.
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