State Comptroller DiNapoli Releases Audits

April 18, 2024

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

New York City Department of Small Business Services - Selected Programs to Assist Businesses in New York City (2022-N-1)

The New York City Department of Small Business Services (SBS) is tasked with helping businesses throughout New York City start, operate, and expand. SBS programs, including the Energy Cost Savings Program, the Business Preparedness and Resiliency Program, and a program to assist small businesses by providing the services of Compliance Advisors and Small Business Advocates, each offer a different service to provide small businesses with support across the business life cycle. Auditors found that SBS needs to improve monitoring of businesses' continued eligibility for program benefits.

Department of Health - Medicaid Program - Oversight of Managed Long-Term Care Member Eligibility (Follow-Up) (2023-F-29)

Many of the State's Medicaid recipients are enrolled in managed long-term care (MLTC) plans, which provide long-term care services for people who are chronically ill or disabled. To be eligible for MLTC enrollment, individuals must be assessed as needing community-based long-term care (CBLTC) for more than 120 days. A prior audit, issued in August 2022, identified $701 million in improper Medicaid MLTC premiums on behalf of 52,397 recipients who were no longer eligible for MLTC and Medicaid paid $2.8 billion in MLTC premium payments on behalf of 51,947 recipients who received a limited number of CBLTC services, and DOH did not have a process to monitor that enrollees were properly assessed or had access to the care they needed. The follow-up found that less than 5% of the $701 million in improper MLTC payments had been recovered and DOH still needed to develop a process to identify and monitor ineligible enrollees in between assessments. Of the initial report's four audit recommendations, one was implemented, two were partially implemented, and one was not implemented.

State Education Department (Preschool Special Education Audit Initiative) - Positive Beginnings, Inc. - Compliance With the Reimbursable Cost Manual (2022-S-45)

Positive Beginnings, a New York City-based proprietary organization, is approved by the State Education Department (SED) to provide full-day and half-day Special Class programs to children with disabilities who are between the ages of three and five years. For the three fiscal years ended June 30, 2020, Positive Beginnings reported approximately $32.1 million in reimbursable costs for the SED preschool cost-based programs. Auditors identified $663,830 in reported costs that did not comply with requirements.

Department of Environmental Conservation - Oversight and Enforcement of the Rechargeable Battery Law (Follow-Up) (2023-F-35)

The Rechargeable Battery Law (Law), effective in December 2010, was enacted to reduce rechargeable batteries' impact on the environment. The Call2Recycle (C2R) rechargeable battery program existed prior to the Law's implementation and still carries out much of the recycling of rechargeable batteries in the State. Retailers of rechargeable batteries are required to accept used rechargeable batteries from consumers, maintain collection receptacles, and post signage informing consumers that they can return their used rechargeable batteries to the retail location for recycling and that they are prohibited from knowingly disposing of such batteries as solid waste. A prior audit, issued in June 2022, found the Department of Environmental Conservation (DEC) was not effectively monitoring manufacturer or retailer compliance with the Law, identifying that retailers were missing required signage and potentially covered retailers were not enrolled with C2R and did not have collection receptacles. DEC officials have made significant progress in addressing the problems identified in the initial audit report, implementing one of the two audit recommendations and partially implementing the other.

Department of Health - Medicaid Program - Improper Overlapping Medicaid and Essential Plan Enrollments (Follow-Up) (2023-F-40)

The Department of Health (DOH) administers the State's Medicaid program and the Essential Plan, which provides health insurance to lower-income people who, generally, don't qualify for Medicaid. A prior audit, issued in October 2022, identified $36.5 million in Medicaid payments and $16.2 million in Essential Plan payments on behalf of 4,422 recipients with the same Social Security number; and additional payments totaling $3.8 million by Medicaid and $2.2 million by the Essential Plan on behalf of 603 recipients who had other matching demographic data when Social Security numbers were not available, such as name, date of birth, and gender. Furthermore, DOH did not have a process to detect and correct these improper duplicative enrollments, nor did it have a process to recover improper payments caused by the overlapping enrollments. DOH officials made some progress in addressing the problems identified in the initial audit report; however, additional actions are needed. Of the initial report's three audit recommendations, two were partially implemented and one was not implemented.

State Education Department (Preschool Special Education Audit Initiative) - NYSARC, Inc. - Rockland County Chapter - Compliance With the Reimbursable Cost Manual (2022-S-50)

NYSARC, Inc. - Rockland County Chapter (NYSARC Rockland), a not-for-profit special education provider located in Valley Cottage, is approved by the State Education Department (SED) to provide Preschool Non-Integrated education services to children with disabilities between the ages of 3 and 5 years. For the fiscal year ended June 30, 2021, NYSARC Rockland reported more than $2.3 million in reimbursable costs for the SED preschool cost-based program. Auditors identified $189,182 in reported costs that did not comply with requirements.

Department of Health - Oversight of Registration, Licensing, and Inspection of Radioactive Materials Facilities and Radiation Equipment Facilities (Follow-Up) (2023-F-28)

The Department of Health (DOH) is responsible for the supervision and regulation of radiation and radioactive materials in New York State, outside of New York City. DOH duties include licensing and inspecting approximately 1,100 radioactive materials facilities (RAM facilities), as well as registering and inspecting approximately 9,900 radiation equipment facilities that use diagnostic, mammography, and stereotactic equipment. A prior audit, issued in September 2021, found that DOH completed 94% of RAM facility inspections on time, but 44% of those inspections were completed beyond the established 1- to 5-year inspection time frames by relying on a buffer that was intended to allow for more flexibility and logical extensions to the inspection intervals, such as for staff time and travel. DOH made some progress in addressing the problems identified in the initial audit report; however, more work needs to be done. Of the initial report's four recommendations, one was implemented, one was partially implemented, and two were not implemented.

New York City Department for the Aging - Oversight of the Home Delivered Meals Program (Follow-Up) (2023-F-25)

The New York City Department for the Aging (DFTA) created the Home Delivered Meals program to maintain or improve the nutritional status of seniors who are unable to prepare meals. A prior audit, issued in January 2022, found DFTA did not ensure that its contracted providers always delivered quality, safe, nutritious meals in a timely manner to the City's seniors and could not demonstrate that it addressed all program complaints. Moreover, DFTA did not ensure providers were paid only for meals that were actually delivered and allowed a 3% difference between the number of meals for which providers were paid compared to the number actually delivered. DFTA made some progress in addressing the problems identified in the initial audit report. Of the initial report's 12 audit recommendations, three were implemented, five were partially implemented, and four were not implemented.

Homes and Community Renewal - Housing Trust Fund Corporation - Internal Controls and Maximization of Federal Funding for CDBG and HOME (Follow-Up) (2023-F-42)

Within Homes and Community Renewal (HCR), the Housing Trust Fund Corporation's Office of Community Renewal receives federal funding from the U.S. Department of Housing and Urban Development (HUD) to administer the Community Development Block Grant (CDBG) program and HOME Investment Partnerships Program (HOME). Both programs provide funding to expand the supply of decent, safe, and affordable housing, principally for low- and moderate-income households across the State. A prior audit, issued in September 2022, found that HCR could improve the timely release of federal funds, especially regarding the CDBG COVID-19 (CDBG-CV) relief aid funded grants. As of June 2022-more than 2 years after the start of the pandemic-HCR had obligated only about $98 million of the $127 million in CDBG-CV grants and expended less than $5 million. HCR officials made progress in addressing the issues identified in the initial audit report, implementing both recommendations.

Department of Labor - Overlap, Duplication, Gaps, and/or Fragmentation of Workforce Development Programs and Services (Follow-Up) (2023-F-36)

The Department of Labor (DOL) is the lead State agency for New York's Workforce Development System (System), which includes a State Workforce Investment Board (SWIB) and other State-level and local and contracted providers that have roles in coordinating or providing programs and services that address current and emerging workforce needs. A prior audit, issued in May 2022, identified weaknesses in the System that left DOL inadequately positioned to address the State's workforce needs. For instance, the SWIB had been inactive since 2017, contributing to a delay in obtaining federal approval for its required 2020 plan describing its workforce development strategy. Further, DOL failed to update the Catalogue of Funding programs (which provides information about eligibility and funding) since August 2019. DOL officials made significant progress in addressing the problems identified in the initial audit report, fully implementing four of the five audit recommendations and partially implementing the remaining one.

New York City Department of Transportation - Oversight of Selected Aspects of Traffic Controls (Follow-Up) (2023-F-22)

The New York City Department of Transportation (DOT) is responsible for the operation and condition of its streets, highways, sidewalks, signalized intersections, and street lights. This responsibility includes conducting traffic control studies at intersections; approving traffic controls; and overseeing the design, construction, timing, and maintenance of traffic control devices. A prior audit, issued in September 2020, found that DOT monitored traffic flow at intersections but did not address customer concerns in a timely manner. DOT officials made some progress in addressing the issues identified in the initial report. Of the initial report's 11 recommendations, five were implemented, four were partially implemented, and two were not implemented.

Division of Criminal Justice Services - Motor Vehicle Theft and Insurance Fraud Prevention Program (2022-M-2)

Motor Vehicle Theft and Insurance Fraud (MVTIF) has a substantial impact on motor vehicle insurance rates in New York State. The MVTIF Prevention Demonstration Program (Program), is intended to provide an integrated means to prevent, deter, and reduce the incidence of these crimes by developing and providing funding for programs that support specialized law enforcement units and prosecutors. Auditors found persisting gaps in Program governance throughout the 4-year audit period that hindered the Division of Criminal Justice Services' (DCJS) ability to conduct Program business. These gaps contributed to DCJS' continued reliance on extending contract award amounts that were decided based on non-current crime statistics. Auditors also found Program costs that lacked adequate support or were incorrectly charged to the Program.