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December 21, 2007

Audit Faults Central New York Development
Disabilities Services Office Procurement Practices

Hired Relatives of Employees to Do Work;
Fraudulent Payments Made to Employee

The Central New York Development Disabilities Services Office (DDSO) hired dozens of relatives of employees to provide repair and other respite care services totaling $253,000, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“New York State’s laws are designed to ensure that services obtained by state agencies are at the lowest price possible and without favoritism to any vendor,” DiNapoli said. “Hiring relatives without the right bidding process is not the best way to comply with those laws. All vendors should have a fair opportunity to provide services and competitively bid for contracts. That did not happen at the Central New York DDSO.”

The audit examined the procurement practices of the DDSO from January 1, 2005 through April 30, 2007. Auditors found:

  • In at least 331 separate transactions, totaling $253,385, the DDSO obtained home maintenance, repair, respite and sitter services from thirty different relatives. Ten of these relatives accounted for $245,256, or 97 percent, of the money spent on the above services.
  • In 113 of 331 transactions tested, four relatives who provided services were paid a total of $176,192. While all the transactions were supported by a standard voucher and invoice, in 64 of the 113 transactions there was no evidence of how the vendor was selected, and in nearly all instances there was no evidence the price was reasonable.
  • In one instance, one of these vendors with a windows and siding business was selected to perform landscaping and cabinet renovation work at a group home. Auditors questioned why this vendor would be selected to perform work outside his area of expertise.
  • One full-time employee was fraudulently paid approximately $4,000 for providing sitter services at the same time that she was being paid to perform her regular duties for the DDSO. When auditors brought this matter to the attention of DDSO officials, they were told that DDSO officials knew that this employee sometimes worked her regular job when she should have been working as a sitter. When this occurred, the employee’s brother actually served as the sitter.

The audit also found that vouchers and invoices often lacked important details. As a result, it was often difficult to determine what kinds of services were performed and whether the transactions were valid and necessary.

State law requires that agencies provide evidence that all vendors are given a fair opportunity to provide the needed service and that a reasonable price is paid for the service. The law also requires agencies to maintain a detailed record with supporting documentation of all decisions made during the procurement process.

DiNapoli’s audit recommends that the State Office of Mental Retardation and Development Disabilities obtain an opinion from the Commission on Public Integrity on the obligation to seek competitive bids when hiring employees as sitters and to investigate the fraudulent certifications for sitter services. He also recommended that the Central NY DDSO:

  • Ensure procurement transactions comply with the New York State Procurement Guidelines and the New York State Procurement Bulletin;
  • Monitor procurement transactions to ensure compliance with Executive Order 1 and DDSO’s Ethical Conduct Guidelines; and
  • Recover the money paid to the employee for sitter services she never provided.

DiNapoli noted that DDSO officials agree with the audit’s findings and recommendations, and have taken actions to implement them. A written response from the DDSO is included in the audit.

Click here for a copy of the audit.


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