New York State Comptroller Thomas P. DiNapoli posted local government and school audits on the Internet

On November 20, 2025, New York State Comptroller Thomas P. DiNapoli announced the following local government and school audits were issued.

Click the text highlighted in COLOR to access the audit posted on the Internet.

Town of Elmira Fire District No.1 – Long-Term Planning (Chemung County)

District officials did not establish or adopt up-to-date long-term capital and financial plans. The district had five vehicles at or beyond their useful life estimates in 2025. Auditors estimated that the total vehicle replacement cost of these five vehicles was approximately $2.3 million in 2025. However, the reserve fund balance totaled $971,000 as of Dec. 31, 2024. If all five vehicles at or beyond their useful life estimates were replaced in 2025, the district may face a shortfall of approximately $1.3 million. 

Because district officials did not maintain a long-term capital plan for vehicles or plan for future financial operations, the board’s ability to effectively manage the district’s finances was hindered. Therefore, potential large increases to real property tax levies may occur when assets are needed in the future. As a result of the audit, the board created a new capital plan that projected reserve contributions, vehicle replacement costs and useful life through 2054.

Richburg-Wirt Fire District – Board Oversight (Allegany County)

The board did not provide adequate oversight of financial operations. Specifically, the board did not develop and adopt required policies, including an investment policy, a procurement policy and a code of ethics. It did not use reserve funds in a transparent manner and could not support that transfers totaling $36,611 were adopted through board resolutions and that public hearings were held, when required. The board also did not audit the treasurer’s records or ensure all of its members completed mandatory oversight training within the required time period. 

In addition, the board did not use competitive bidding for the purchase of an off-road utility vehicle for approximately $28,000 as required, and may have paid more than necessary.

Town of Cherry Valley – Budget Review (Otsego County)

Auditors determined that the town’s preliminary budget significantly underbudgeted the appropriations for the Cherry Valley Community Health Center. Although all other significant revenues and appropriation estimates were considered reasonable and accurate, auditors identified long-term financial concerns regarding the lack of recurring revenues to fund recurring expenditures. 

The 2026 preliminary budget includes an estimate for health center appropriations of $495,000 in the general fund. Auditors’ projection of health center expenditures for 2025 is approximately $1 million. 

The board’s unrealistically low estimate for health center expenditures enabled the board to lower the town’s tax levy in the preliminary budget. However, without a source of additional revenues for the health center, the board could nearly deplete the town’s general fund resources by the end of 2026.

West Irondequoit Central School District – Emergency Drills (Monroe County)

During the school year, district officials must conduct a minimum of 12 evacuation and lockdown drills for each building and three bus drills for each bus to provide staff and students with the training necessary to respond appropriately in an emergency. 

District officials did not conduct all required bus drills and did not ensure all students participated in bus drills. Officials also did not file the required annual certification for bus drills or properly notify parents of drills as required in 2024-25. Without adequate emergency instruction and training, district officials cannot ensure that staff and students are prepared for emergencies. 

Additionally, without properly notifying parents in advance of building drills, parents may not have sufficient information to ask questions about procedures or be prepared to discuss the drills with their children.

Newark Valley Fire District – Audit Follow-Up (Tioga County)

The review assessed the district’s progress in implementing the recommendations in the audit report, Newark Valley Fire District – Board Oversight (2020M-30). The audit determined that district officials, needed to improve controls over hall rentals, did not adopt an investment policy and update the procurement policy, retain documentation of quotes in compliance with the procurement policy, provide for an annual audit of the treasurer’s records and ensure that the treasurer filed its required annual financial information within 60 days of the close of the fiscal year. 

The audit included five recommendations to help officials monitor and improve the district’s financial operations. Of those, two recommendations were implemented, one recommendation was partially implemented, and two recommendations were not implemented.

Hunter-Tannersville Central School District – Audit Follow-Up (Greene County)

The review examined the district’s progress in implementing recommendations in the audit report, Hunter-Tannersville Central School District – Network User Accounts and Information Technology Contingency Planning (2022M-125). The audit determined that district officials did not adequately manage or monitor nonstudent network user accounts or develop a written IT contingency plan. 

To help officials improve their controls over nonstudent network user accounts and be prepared for system disruptions, the audit included a public report that contained five recommendations and confidentially conveyed sensitive IT control weaknesses and recommendations. The district fully implemented all five recommendations contained in the public audit report, auditors determined. 

Auditors also reviewed progress in implementing the recommendations related to the sensitive IT control weaknesses, and communicated those results confidentially to district officials.

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In seeking to dismiss an action brought under color of CPLR 3211(a)(5) as untimely, the moving party must show that the controlling statute of limitations has expired

In this CPLR Article 78 action Petitioner sought judicial review of a determination of the Town Board [Town] which had adopted the report and recommendation of a disciplinary hearing officer's finding accused Petitioner guilty of 12 specifications of misconduct and incompetence, and terminated the Petitioner's employment as a police officer. Supreme Court, however, issued an order and judgment granting the Town's motion to dismiss the Petitioner's Article 78 action challenging the Town's decision as untimely and dismissed Petitioner's Article 78 action. Petitioner then appealed the Supreme Court's ruling.

The Appellate Division affirmed the Supreme Court's ruling, with costs, explaining:

1. "On a motion to dismiss a complaint pursuant to CPLR 3211(a)(5) on the ground that the statute of limitations has expired, the moving defendant must establish, prima facie, that the time in which to commence the action has expired;

2. "The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period; and

3. "Unless a shorter time is provided in the law authorizing the proceeding, a four-month statute of limitations is generally applicable to proceedings pursuant to CPLR Article 78".

In this instance, the Count's Police Act, as amended, stated that the review of a disciplinary action, the "conviction of any member of such police force" shall be presented to the court "within sixty days after the conviction". 

The Appellate Division's decision, noted that the Town "had established, prima facie", that the instant proceeding was time-barred by showing that the petition was not filed within 60 days from the Town's final  determination and Petitioner failed to raise a question of fact as to whether the proceeding was timely commenced," opined that "[I]t is well settled that an argument 'may not be raised for the first time before the courts in an article 78 proceeding'".

Finding that Petitioner failed to raise his contention that his disciplinary proceeding was not governed by the County Police Act until the Petitioner commenced this Article 78 proceeding, the Appellate Division opined that Supreme Court should not have considered that issue and then concluded that Supreme Court had properly granted the Town's motion pursuant to CPLR 3211(a)(5) and 7804(f) to dismiss the petition as time-barred and correctly dismissed the proceeding.

Click HERE to access the Appellate Division's decision posted on the Internet.

A retirement system member's timely designation of the party or entity to receive the member's death benefit is critical

In an Article 78 action involving the payment of a death benefit by the New York City Employees' Retirement System [NYCERS] involving competing claimants, one of Plaintiffs seeking the death benefit appealed a Supreme Court's decision granting NYCERS' motion pursuant to CPLR 3211(a) to dismiss Plaintiff's cause of action. The Appellate Division affirmed the Supreme Court's ruling.

Plaintiff's claimed decedent [Decedent] had been employed by the New York City Department of Parks and Recreation and was a member of NYCERS. In 1980, Decedent submitted a designation of beneficiary form to NYCERS designating his daughter and his mother as his beneficiaries for an ordinary death benefit [ODB] which was to be paid to the designated beneficiaries if the NYCERS member died while in service.

In 2008, Decedent submitted a designation of beneficiary form designating Plaintiff, Decedent's spouse, as his beneficiary for the ODB. Decedent also checked a box on the 2008 designation form stating that he was nominating his estate as his  beneficiary, which was accompanied by an acknowledgment that a NYCERS member could not designate both an individual and the member's estate as beneficiaries. 

By letters sent in August 2008 through October 2008, NYCERS notified Decedent that the 2008 designation was invalid because he had designated both the Plaintiff and his estate as beneficiaries and that the Decedent needed to complete a new designation of beneficiary form. Decedent failed to complete and file a new designation of beneficiary form with NYCERS.

In early 2017, Decedent submitted an application for service retirement to NYCERS at which time Decedent had the option of designating a beneficiary or beneficiaries to receive a postretirement death benefit [PRDB] upon his death, or in the absence of such an election, NYCERS would issue the PRDB to the beneficiary or beneficiaries who were designated to receive the ODB. Decedent did not designate a beneficiary to receive the PRDB.

Decedent died in May, 2017 and NYCERS then informed the Decedent's daughter and his mother that they were entitled to the PRDB by virtue of their status as ODB  beneficiaries. 

In March 2018 Plaintiff inquired as to her entitlement to the PRDB. NYCERS responded, notifying Plaintiff that although the Decedent had named her as a beneficiary, he had also designated his estate as a beneficiary, and, therefore, the designation was "invalid" and she was not entitled to the PRDB.

In June 2019, Plaintiff commenced the instant action against NYCERS seeking a judgment declaring that NYCERS is obligated to pay the PRDB to the Plaintiff. NYCERS moved to dismiss the complaint as time-barred, contending that Plaintiff could have commenced a CPLR Article 78 proceeding to challenge NYCERS's determination that the 2008 designation was invalid and the Plaintiff was not entitled to the PRDB and that the four-month statute of limitations applicable to such proceedings applied. However, as the action was not commenced within the four-month period, Supreme Court granted NYCERS's motion, determining that the action was time-barred and Plaintiff appealed Supreme Court's ruling.

The Appellate Division, explaining that:

1. On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired; and

2. "The burden then shift[s] to the plaintiff to present admissible evidence establishing that the action was timely or to raise a question of fact as to whether the action was timely'".

In addition, the Appellate Division noted that "Where a declaratory judgment [or other] action involves claims that could have been made in another proceeding for which a specific limitation period is provided, the action is subject to the shorter limitations period" and thus where as is here the situation, "a proceeding could have been brought pursuant to CPLR article 78, the four-month statute of limitations applicable to such proceedings applies. The Appellate Division observed that as "Plaintiff correctly concedes," the four-month statute of limitations applicable to a proceeding commenced pursuant to CPLR Article 78 applies, and Plaintiff could have commenced such a proceeding to challenge NYCERS's determination that the 2008 designation was invalid".

In the words of the Appellate Division:

a. "A challenge to an administrative determination must be commenced within four months of the time the determination is 'final and binding upon the petitioner;

b. "A determination is final and binding within the meaning of CPLR 217 when the decisionmaker arrives at a definitive position on the issue that inflicts an actual, concrete injury; and

c. The statute of limitations "does not begin to run until the petitioner receives notice of the [final] determination".

Following further discussion concerning the running of the several statutes of limitations involved in this situation, the Appellate Division concluded that "Supreme Court properly granted the Defendant's motion pursuant to CPLR 3211(a) to dismiss [Plaintiff's] complaint as time-barred".

Click HERE to access the Appellate Division's decision posted on the Internet.

The New York State Bar Association's Local and State Government Law Section's 2026 Program

 

Join/Renew

Thursday, January 15, 2026 New York Hilton Midtown, 1335 6th Ave, New York, NY Register Now Book Hotel We’re excited to share the latest updates for the Local and State Government Law Section's Annual Meeting programming. New details have been added to help you make the most of your experience. Be sure to register today and secure your place at this year’s event.  Section events include:  Local and State Government Law Section MCLE Program Thursday, January 15 | 8:45 a.m. - 4:15 p.m. Join us for this year’s annual meeting which will cover hot topics and the latest developments in municipal law including, disadvantaged communities under the CLCPA, cybersecurity, labor, land use and zoning, home rule, and ethics. Special Events Presidential Summit MCLE Program Wednesday, January 14 | 2:00 p.m. - 4:00 p.m. Constance Baker Motley Symposium Wednesday, January 14 | 4:00 p.m. -  6:00 p.m. President's Reception: A Celebration of the 150th Anniversary Wednesday, January 14 | 6:00 p.m. - 7:30 p.m. This email was sent to NYPPL by the New York State Bar Association One Elk Street Albany, NY, 12207, USA and has been posted by NYPPL Pro Bono.  Manage Preferences | Unsubscribe | Privacy Policy

Correction officer found guilty of disciplinary charges alleging unprofessional and threatening misconduct terminated from service

A County Department of Probation probation officer [Petitioner] was served three disciplinary charges alleging behavior that was "unbecoming an employee and/or constituted violations of the employer's workplace violence policy and anti-harassment policy". 

Following a disciplinary hearing conducted pursuant to Civil Service Law §75, the Hearing Officer issued a report in which he found Petitioner guilty of the disciplinary charges and recommended Petitioner's dismissal from service. The Director of the County Department of Probation [Director] adopted the Hearing Officer's findings and recommendation and terminated Petitioner's employment.

Petitioner initiated a CPLR Article 78 proceeding in Supreme Court challenging the Director's determination, which action was then transferred to the Appellate Division pursuant to CPLR 7804[g]. The Appellate Division affirmed the Director's decision, observing that it was  supported by substantial evidence". 

The disciplinary charges against Petitioner essentially relate to three incidents, and extensive testimony and documentary evidence was presented at the hearing addressing each of them. 

The first incident involved a heated interview between Petitioner and one of the probationers he was supervising. Numerous witnesses testified that Petitioner commenced "yelling" at the probationer, accusing him of lying, barring him from leaving despite having no basis for doing so and eventually demanding to know whether he wanted "to take [it] outside". The proof submitted reflected that the interview became so contentious that others intervened to de-escalate the situation and separate the two individuals. The probationer was subsequently transferred to the caseload of another probation officer.

The second incident involved another probation officer who alleged Petitioner's behavior to be threatening and she filed a formal complaint against Petitioner with the agency's human resources office.

The testimony following a third incident, which involved Petitioner and a different probation officer, reported that the probation officer was "uncomfortable around [Petitioner] due to his prior behavior and decided to wait in her vehicle until he went inside'. The probation officer testified that when she finally got out of her car, "Petitioner also got out of his vehicle and waited for her by the stairs to the employee entrance" and another probation officer "was worried enough about what might happen next that she began recording audio on her phone, and that recording was entered into evidence at the hearing". 

The probation officer testified that she found the "incident so disturbing that she immediately reported it to her supervisor" and, like the probation officer who had been involved in the earlier incident, filed a formal complaint about it.

The Appellate Division opined that "Without belaboring the point further, this proof of [Petitioner's] unprofessional and threatening conduct" during these several incidents reflected that Petitioner "had engaged in conduct unbecoming a County employee in numerous respects".

Although Petitioner presented testimony that challenged aspects of the other witnesses' accounts and generally attempted to put his behavior in a more favorable light, the Hearing Officer indicated that he found Petitioner to be "wholly incredible in his testimony" and "credited the proof that [Petitioner] had engaged in extensive misconduct. 

The Appellate Division's decision concluded by noting Petitioner's "demonstrated pattern of unprofessional and aggressive behavior, for which he failed to accept any responsibility or indicate a willingness to modify in the future", and, citing Matter of McLean v City of Albany, 13 AD3d 851, and other Appellate Division decisions, held that the penalty of termination "was not so disproportionate to the offense as to shock our sense of fairness.".

Click HERE to access the Appellate Division's decision in the instant matter posted on the Internet.

Selected items posted on blogs during the week ending November 14, 2025

Data Solutions for Faster Aid Delivery Help eligible individuals gain quick, reliable access to vital services like food and healthcare. Learn More 

Empower Individuals and Families to Achieve Stability and Self-Sufficiency Use Data-Driven Insights to Provide Faster and Easier Access to Vital Social Services. Learn More

ROI You Can Prove: Making the Case for Modern Identity Systems Modern identity systems are critical to secure, digital-first government—but funding them takes a clear business case. This guide walks through a realistic five-year cost-benefit analysis for digital identity systems in the public sector, showing how agencies can forecast ROI, reduce fraud, and accelerate digital transformation. DOWNLOAD

Building Whole-of-State Cybersecurity: A Maturity Model for Shared Resilience This new paper outlines how states can evolve from foundational security practices to advanced, optimized operations — leveraging automation, AI, and shared intelligence to reduce risk and improve response times. DOWNLOAD 

No Wrong Door: Modernizing Digital Identity for Seamless Government Access This paper outlines how a modern IAM strategy — built on single sign-on, multifactor authentication and open standards — reduces complexity, boosts cybersecurity and delivers a better experience for both residents and staff. DOWNLOAD

See How Coordination Brings Connectivity Back After Natural Disasters  Restoring connectivity is essential to recovery. A new docufilm follows broadband crews working alongside utilities and government partners to bring communications back. Watch the Film

No Wrong Door: Modernizing Digital Identity for Seamless Government Access This paper outlines how a modern IAM strategy — built on single sign-on, multifactor authentication and open standards — reduces complexity, boosts cybersecurity and delivers a better experience for both residents and staff. DOWNLOAD

Q&A: Beyond Silos: Optimizing Whole-of-State Defense This Q&A explores how a whole-of-state approach can unify security efforts across departments, while optimizing limited resources.  DOWNLOAD

New York State Comptroller Thomas P. DiNapoli posts local government and school audits on the Internet

On August 13, 2025, New York State Comptroller Thomas P. DiNapoli posted the following audits on the Internet.

Click the text highlighted in COLOR to access the audit.

Serven Volunteer Fire Company – Board Oversight (Seneca County) The board did not ensure financial activities were properly recorded and reported and resources were adequately safeguarded, which increased the risk that errors or irregularities could occur and remain undetected and uncorrected. The board did not ensure that the bylaws were adequate or enforce their limited financial provisions, establish supplemental financial policies or procedures, conduct a thorough audit of bills or conduct an annual audit of the treasurer’s books and records. The treasurer did not solely receive and deposit all money as required and allowed a member to handle hall rental revenue.

Border City Fire District – Board Oversight (Seneca County) The board did not provide adequate oversight of the district’s financial operations. As a result, the former district fire department chief, who was also a director of the Border City Hose Company, entered into an unauthorized contract with a private corporation and kept an unauthorized bank account into which he inappropriately deposited and withdrew district money. The board did not ensure all goods and services were procured in compliance with state law, district policies or in the best interest of taxpayers. The board did not oversee the chief or ensure the treasurer received, accounted for and dispersed all district money.

Border City Hose Company – Financial Oversight (Seneca County)  Company officers did not provide oversight of company financial operations by performing even the limited oversight responsibilities outlined in the company’s bylaws. Certain officers hindered the treasurer’s ability to perform his fiscal responsibilities by designating themselves as recipients and custodians of most company money. As a result, company money was not always properly accounted for, and a director, who was also the Border City Fire District Fire Department chief, inappropriately used company funds for his personal benefit.

Henderson Fire District – Financial Activities (Jefferson County) The board did not adequately monitor financial activities or ensure the treasurer maintained appropriate records and reports. Auditors determined the treasurer did not prepare accurate and timely bank reconciliations for the general fund checking account and did not reconcile the three interest-bearing savings and money market accounts. The treasurer did not provide the board with a detailed listing of all funds received and disbursed during the month or balance sheet reports. The treasurer also did not file annual financial reports with the State Comptroller’s Office for 2019 through 2024.

Canisteo-Greenwood Central School District – Claims Auditing (Steuben County) The claims auditor did not properly audit all claims prior to payment. Of the 2,943 claims totaling $23.7 million, auditors reviewed 202 claims totaling $1.4 million and determined that 105 claims totaling approximately $804,000 should not have been approved by the claims auditor for payment. While auditors were able to determine that each of the 202 claims was for a proper district purpose, the board had no assurance that claims approved by the claims auditor complied with its written policies and that each purchase was for a proper district purpose.

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Attorney sanctioned after including AI generated hallucinations in material submitted to the court

New York State Supreme Court Justice Joel M. Cohen introduced his decision in the instant matter as follows: 

"This case adds yet another unfortunate chapter to the story of artificial intelligence misuse in the legal profession. Here, Defendants' counsel not only included an AI-hallucinated citation* and quotations in the summary judgment brief that led to the filing of this motion for sanctions, but also included multiple new AI-hallucinated citations and quotations in Defendants' brief opposing this motion. In other words, counsel relied upon unvetted AI — in his telling, via inadequately supervised colleagues — to defend his use of unvetted AI."

Justice Cohen opined that the use of AI is not the problem per se, "the problem arises when attorneys abdicate their responsibility to ensure their factual and legal representations to the Court—even if originally sourced from AI—are accurate". In the words of the Court, "When attorneys fail to check their work—whether AI-generated or not—they prejudice their clients and do a disservice to the Court and the profession. In sum, counsel's duty of candor to the Court cannot be delegated to a software program".**

Justice Cohen then:

"ORDERED that Plaintiff's motion for sanctions pursuant to 22 NYCRR §130-1.1 is GRANTED, such that Defendants and their counsel are jointly and severally liable to compensate Plaintiff for her reasonable costs and attorney's fees incurred in connection with this motion, together with fees and costs attributable to addressing Defendants' unvetted AI citations and quotations in the summary judgment motion;

"ORDERED that Plaintiff shall submit an application with supporting documentation for the fees awarded above within fourteen (14) days of the date of this order; Defendants and their counsel may submit opposition thereto within fourteen (14) days of Plaintiff's application. Plaintiff shall notify the Court via letter filing on NYSCEF and by email when the application is complete and whether it is opposed or unopposed; and

"ORDERED that Plaintiff's counsel promptly submit a copy of this decision and order to the Grievance Committee for the Appellate Division, First Department and the New Jersey Office of Attorney Ethics, copying defense counsel and this Court on its transmittal letters."

* Such "creativity" by an Artificial Intelligence computer program is often referred to as an "AI generated hallucination".

Click HERE to access Justice Cohen's ruling posted on the Internet.

Unemployment Insurance claimant terminated for failure to obtain a COVID-19 vaccination challenged her disqualified from receiving such benefits

Claimant for Unemployment Insurance Benefits appealed a New York State Unemployment Insurance Appeal Board [Board] ruling holding that Claimant was disqualified from receiving unemployment insurance benefits because Claimant voluntarily separated from employment without good cause.

Claimant was notified by her employer that she and similar situated employees in patient-facing roles were required to obtain a COVID-19 vaccine by a specified date in order to continue their employment. Claimant submitted a written religious exemption request seeking to be exempt from the vaccination requirement, which request the employer denied.

Claimant's employment was ultimately terminated for her failure to obtain the COVID-19 vaccination and she applied for unemployment insurance benefits. 

The New York State Department of Labor issued an initial determination finding, among other things, that Claimant was disqualified from receiving unemployment insurance benefits because she had voluntarily separated from her employment without good cause. Following a hearing, an Administrative Law Judge sustained the initial determination, and that decision was upheld by the Unemployment Insurance Appeal Board and Claimant appealed. 

The Board then reopened its decision pursuant to Labor Law §534 and remanded the matter for a hearing to address, among other things, Claimant's contention that her sincerely held religious beliefs prevented her from receiving the COVID-19 vaccination. The Board confirmed its earlier decision and Claimant appealed.

The Appellate Division affirmed the Board's decision noting that "Whether a claimant has good cause to leave employment is a factual issue for the Board to resolve, and its determination will be upheld if supported by substantial evidence, notwithstanding evidence in the record that might support a contrary in addition the the Court observed "... whether a claimant's conduct is motivated by sincerely held religious beliefs or is based upon secular convictions is a question for the Board".

Claimant had indicated, among other things, that she declined to be vaccinated because of her faith, that she has serious medical issues, that receiving the vaccine would not have been in her health's best interests and that she had safety concerns regarding the COVID-19 vaccine. 

Under the circumstances, and deferring to the Board's credibility assessments and the inferences to be drawn from Claimant's testimony and submissions, which varied at points regarding her reason for not getting vaccinated, the Appellate Division concluded that "substantial evidence supports the Board's finding that claimant voluntarily refused to comply with the vaccine mandate for personal and secular reasons, including her safety concerns, and not based upon sincerely held religious beliefs and, thus, she left her employment without good cause."

Click HERE to access the Appellate Division's decision.

New York State Departments and Agencies and other New York governmental entity audits posted on the Internet

On August 7, 2025, New York State Comptroller Thomas P. DiNapoli posted the following audits on the Internet.

Click the text highlighted in COLOR to access the audit.

New York City Public Schools – College Readiness (Follow-Up) (2025-F-12)

Nearly half of all students who complete high school and go to college require remedial courses, and nearly half never graduate. In general, college readiness refers to the set of skills, behaviors, and knowledge a high school student should have before enrollment in their first year of college, as well as the ability for high school students to demonstrate the knowledge and skills required to successfully complete freshman-level college coursework. A prior audit, issued in October 2022, found that, overall, New York City Public Schools (NYCPS, formerly the New York City Department of Education) should do more to prepare students to be college ready regardless of the post-secondary pathway they decide to take, and this preparation should begin much earlier in students’ school years. Specifically, for a cohort of 71,210 high school students expected to graduate by August 2019, as many as 23% did not graduate on time. NYCPS officials have made significant progress in addressing the problems identified in the initial audit report, implementing all four recommendations.

Department of Health – Medicaid Program: Oversight of Managed Care Provider Networks (2023-S-20)
Managed care organizations (MCOs) are required to submit their provider network to the Department of Health (DOH) quarterly, and this information is used to generate a deficiency report identifying areas where the MCO lacks enough providers in certain counties. MCOs are given an opportunity to dispute deficiencies and provide supporting information to have the deficiency removed and the remaining deficiencies are compiled into a quarterly Statement of Agreement for each MCO. Auditors determined that, in many instances, DOH did not follow its internal review guidance, Statements of Agreement contained inaccurate deficiencies, and deficiency statuses were not always updated, so it was unclear whether DOH took the additional steps needed to complete its quarterly network adequacy review. Auditors also found that DOH does not provide MCOs with adequate guidance regarding the deficiency review process or out-of-network provider payments, which may expose the Medicaid program to increased expenses. Further, despite having access to the Statement of Agreement data, DOH officials do not use this information to identify patterns or areas for improvement or to provide any other oversight of the network adequacy process.

Transforming Into Construction & Development (2023-S-49)
The Public Authorities Law required the Metropolitan Transportation Authority (MTA) to “develop and complete a personnel and reorganization plan” by June 30, 2019. According to the Transformation plan adopted by the MTA Board on July 24, 2019, “the MTA’s transformation seeks to change the fundamental ways in which the Agencies do business in order to drive improved service levels for the customers, process efficiencies and cost reductions.” At the December 2019 Board Meeting, MTA Capital Construction was renamed and reorganized to Construction & Development Company (C&D). Auditors found that, although C&D provided evidence that it had been organizationally transformed, sufficient time had not passed to comprehensively assess whether the change delivered capital projects faster, better, or cheaper, as was its plan. The data that was available was at times incomplete or insufficiently supported, and a definition of what constituted cost savings was not clearly defined and included some questionable items.

Department of Health – Medicaid Program: Improper Payments for Certain Third-Party Cost-Sharing Claims (2024-S-1)
When Medicaid members have other sources of health care coverage (third-party insurers), Medicaid is considered the payer of last resort and, as such, providers are required to coordinate benefits with third-party insurers before billing Medicaid for services. After processing a claim from a provider, the third-party insurer issues a statement to the provider, explaining the reason for any adjustments made to the claim amount. Claim Adjustment Reason Codes (CARCs) and group codes (such as PR, patient responsibility, and CO, contractual obligation) on statements detail the reason an adjustment was made to a claim and assign financial responsibility for the unpaid portion of the claim balance. CARC 45 occurs when the charge exceeds the maximum allowable fee and claims with a CARC PR 45 are currently configured to pay in eMedNY (DOH’s automated Medicaid claims processing and payment system), while claims with a CARC CO 45 are not. Auditors identified 69,166 claims totaling payments of almost $10.2 million billed with a PR 45. They sampled 58 of these claims billed with a PR 45 and identified billing issues on each claim that resulted in Medicaid overpayments of $1,778,546.

New York City Department of Social Services – New York City Department of Homeless Services: Oversight of Contract Expenditures of Institute for Community Living, Inc. (Follow-Up) (2025-F-16)
In March 2014, the New York City Department of Homeless Services (DHS), an administrative unit of the New York City Department of Social Services, contracted with the Institute for Community Living, Inc. (ICL), a City-based not-for-profit organization, to provide temporary housing and other services at its 200-bed Tillary Street Women’s Shelter for the period from December 2013 to December 2021. A prior audit, issued in September 2022, found DHS did not complete required expenditure reviews or ensure that year-end closeouts were completed in a timely manner. Consequently, for the three fiscal years ended June 30, 2019, auditors identified $2,376,462, or 9.7% of all reported costs, did not comply with requirements. DHS officials made some progress in addressing the issues identified in the initial audit report. Of the initial report’s nine audit recommendations, one was implemented, five were partially implemented, and three were not implemented.

Office of Mental Health – Oversight of Kendra’s Law (Follow-Up) (2025-F-6)
In August 1999, Kendra’s Law was enacted, creating a statutory framework for court-ordered Assisted Outpatient Treatment to ensure that individuals with severe mental illness and a history of hospitalizations or violence participate in community-based services appropriate to their needs. Assisted Outpatient Treatment implementation is a joint responsibility and collaboration among the Office of Mental Health (OMH), its five regional Field Offices, and local mental health authorities in 57 counties and New York City. A prior audit, issued in February 2024, found areas in need of improvement, including length of Assisted Outpatient Treatment investigations and related information-sharing, initiation of Assisted Outpatient Treatment services, the quality and completeness of information about significant events and how that information is shared, lapsing Assisted Outpatient Treatment orders, and local mental health authorities’ reported reasons for Assisted Outpatient Treatment non-renewals. OMH officials made progress in addressing the problems identified in the initial audit report. Of the report’s six recommendations, three have been implemented, two have been partially implemented, and one has not been implemented.