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December 7, 2011


Comptroller DiNapoli Releases Audits

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

Department of Taxation and Finance, Sales Tax Audit Practices (2010-S-33)
During the 2009-2010 fiscal year the department completed more than 37,500 sales tax audits, about 30 percent of which resulted in assessments totaling over $1 billion. Auditors reviewed the department's practices and found it had established policies and procedures for performing sales tax audits and for using alternate methods for estimating sales tax. Auditors also found that staff had been trained in these policies and procedures, and appropriately used alternate audit methods only when necessary. Alternative methods were used in 35 of the 51 audit cases sampled, in each case only after the auditors had determined that business records were either unavailable or incomplete.

Department of Taxation and Finance, Distribution of Sales Tax Revenues to Localities (2010-S-77)
While auditors determined that the department's system correctly processed returns, taxpayers often made common errors when completing the returns that resulted in incorrect calculations of taxes due. Auditors found that 32 of 90 personal income tax returns reviewed had errors totaling $371,656 relating to the reporting of sales and use tax. As a result, there was an incorrect distribution of revenues to localities and incorrect tax assessments sent to taxpayers. The errors also caused the department to have additional costs since it had to adjust subsequent payments to localities and work with the taxpayers to correct the improper assessments.

Division of Criminal Justice Services, Sex Offender Registry Program (Follow-Up) (2011-F-3)
The Sex Offender Registration Act established the Sex Offender Registry and public disclosure requirements regarding sex offenders. The act also established certain requirements and responsibilities that must be fulfilled by the Division of Criminal Justice Services. In audit 2006-S-21, auditors found that the division was complying with its responsibilities under the act. However, auditors identified the need for improvement in some of the division's administrative procedures. For example, to better ensure the accuracy of the Sex Offender Registry, the division needed to periodically verify the registry's driver's license information against the information maintained by the Department of Motor Vehicles. When auditors followed up with officials, they found that some progress was made in correcting the problems identified but additional improvements were needed.

State Education Department, St. Joseph's School for the Deaf (Follow-Up) (2011-F-10)
St. Joseph's School for the Deaf is one of 11 private schools in New York State that receives operating aid directly from the state to provide educational services for disabled students. In audit report 2009-S-30, auditors determined that the board of trustees needed to improve its efforts to monitor compliance with certain elements of the school's policies and procedures, and it needed to ensure that the school's activities complied with State Education Department guidance. When auditors followed up with officials they found that they made significant progress in correcting the problems identified but improvements were still needed.

New York State Health Insurance Program: EmblemHealth, Inc. - Accounting for Voided Dental Claims and Voided Checks (Follow-Up) (2011-F-25)
New York State provides dental insurance benefits to certain state employees and their dependents under a contract administered by the Department of Civil Service. The contractor, EmblemHealth, Inc., is reimbursed by the state for its actual costs under the contract. In audit report 2010-S-1, auditors found that the state overpaid the contractor by a total of $753,975 over the four years covered, because some of the contractor's costs were not properly accounted for. When auditors followed up with officials they found that significant actions were taken to address the findings in the initial report.

United HealthCare, New York State Health Insurance Program: Payments of Non-Participating Provider's Facility Fee Claims (Follow-Up) (2011-F-24)
In the New York State Health Insurance Program, the Department of Civil Service administers health insurance programs for active and retired state, local government and school district employees and their dependents. The primary such program is the Empire Plan. The Department of Civil Service contracts with United HealthCare to process and pay medical claims for services provided to Empire Plan members. Members may choose to receive services from non-participating providers. United HealthCare is contractually obligated to apply cost limits when it pays billings from non-participating providers. In audit report 2007-S-110, auditors found that United HealthCare did not apply the cost limitations when it processed facility fee claims submitted by non-participating providers until August 1, 2007, resulting in overpayments been made totaling $4.4 million. When they followed up with United HealthCare officials, they found that they implemented the recommendations from the initial report.

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