On February 12, 2024, New York State Comptroller Thomas P. DiNapoli issued the following State Department and Agency audits.
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Homes and Community Renewal: Housing Trust Fund Corporation – Oversight of the Rural Rental Assistance Program (2023-S-53) The Housing Trust Fund Corporation (HTFC), a component of Homes and Community Renewal, administers the Rural Rental Assistance Program in partnership with the United States Department of Agriculture (USDA). The program provides rental subsidies for low-income elderly and family tenants residing in multi-family properties in rural areas of the State. Overall, auditors determined that HTFC is making program payments to property owners for the correct number of units and that units and projects were maintained properly by project owners, but found opportunities for HTFC to better ensure it receives all the information it should from USDA that would allow HTFC officials to sufficiently monitor individual projects.
Department of Health: Medicaid Program – Impact of Rejected Encounters on the Collection of Drug Rebates (2023-S-2) The Medicaid Drug Rebate Program helps offset the costs of covered outpatient drugs dispensed to Medicaid recipients through rebates received from drug manufacturers. Managed care organizations are required to send the Department of Health (DOH) detailed information about each drug dispensed to managed care recipients on encounter claims to DOH’s encounter system. For the period from January 2018 through March 2023, auditors identified 453,706 pharmacy encounter claims totaling $59.1 million in payments that were rejected by DOH’s encounter system. As a result of these rejections, auditors estimated a total of $31.2 million in missed drug rebates. The encounter system rejected these claims because they could not be validated by system controls, and auditors found that DOH does not have a process for performing detailed reviews of rejected encounter claim data.
Department of Labor: Services to Workers Under the Worker Adjustment and Retraining Notification Act (Follow-Up) (2024-F-22) The Department of Labor (DOL) administers the State’s Worker Adjustment and Retraining Notification Act (WARN Act), which requires covered employers to give at least 90 days’ advance notice of a mass layoff, relocation, or employment loss, with some exceptions. Covered employers must also file a Notice with DOL, local workforce development boards, and certain local officials. A prior audit, issued in June 2023, found weaknesses that impede DOL’s success in meeting the needs of dislocated workers, including issues with oversight of employer compliance with the advance notice requirements, WARN Notices that were not entered into the system DOL used to record related services to employers and affected employees, and late attempts at initial outreach to employers that submitted Notices and to affected employees. DOL officials made substantial progress in addressing the issues identified in the initial audit, implementing three recommendations and partially implementing the fourth.
State University of New York – Determination of Residency for Tuition Purposes (Follow-Up) (2023-F-45) The State University of New York’s (SUNY) Residency Policy (SUNY Policy 7810) establishes proof of residency requirements for students charged the in-state tuition rate. A prior audit, issued in May 2022, found SUNY does not have adequate assurance that, at the graduate level, campuses are making accurate residency determinations and that students are being charged the appropriate tuition rate, with each of the seven SUNY campuses reviewed applying its own interpretation of the policy requirements. From reviews at seven SUNY campuses, auditors also found potential undercharges totaling $1,343,051 for students charged the in-state rate as well as potential overcharges totaling $44,171 for students charged the out-of-state rate. SUNY officials made some progress in addressing the issues identified in the initial audit, implementing one of the four recommendations, partially implementing one, and not implementing one (one recommendation was found to be not applicable).
Department of Health: Medicaid Program – Maximizing Drug Rebates Under the Federal Medicaid Drug Rebate Program (Follow-Up) (2024-F-14) The Medicaid Drug Rebate Program reduces state and federal expenditures for Medicaid prescription drugs. On a quarterly basis, states are required to send rebate invoices to each manufacturer for any rebate-eligible drugs their Medicaid programs paid for. A prior audit, issued in April 2023, identified issues including uncollected drug rebates totaling $183.7 million due to errors in the Department of Health’s (DOH) claim extraction procedures, inaccurate or incomplete claim information submitted by managed care organizations and providers, and claim processing errors made by DOH and the rebate contractor. DOH made progress in addressing the issues identified in the initial audit, with $124.2 million of the $183.7 million in missed rebates invoiced to drug manufacturers. Of the initial audit’s 12 recommendations, two were implemented, eight were partially implemented, and two were not implemented.
Office of Addiction Services and Supports – Oversight of Contract Expenditures of Palladia, Inc. (Follow-Up) (2024-F-29) In 2014, the Office of Addiction Services and Supports (OASAS) entered into a 5-year $45.6 million contract with Palladia, Inc. (Palladia), under which Palladia would provide drug and alcohol addiction treatment services. A prior audit, issued in August 2021, found that OASAS was not effectively monitoring the expenses reported by Palladia and, for the 3 fiscal years ended June 30, 2018, Palladia claimed $2,508,682 in expenses that did not comply with requirements. OASAS made limited progress in addressing the problems identified in the initial audit, partially implementing one recommendation and not implementing the two others.
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