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January 21, 2009

Comptroller DiNapoli Releases Audits

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

Office of Alcoholism and Substance Abuse Services: Network Security Controls (Follow-Up Report) (2008-F-35)
The Office of Alcoholism and Substance Abuse Services (OASAS) oversees programs for preventing and treating alcohol and substance abuse. OASAS has created a computer network that helps it perform its various duties. In a prior audit (2006-S-98), auditors examined security controls in place over this network and found that certain improvements were needed. When auditors followed up on these matters, they found that progress had been made, but additional actions were still needed. Due to the sensitivity of the information, only limited information has been released.

Department of Health: Medicaid Overpayments of Coinsurance Fees for Medicare Beneficiaries (2008-S-128)
If an individual is eligible for both Medicare and Medicaid, the individual’s eligible medical costs are to be paid by Medicare, except for a portion of the costs relating to certain services, which are to be paid by Medicaid. Auditors examined the payments made by Medicaid over a one-year period on behalf of individuals who were eligible for both Medicare and Medicaid and found an estimated $2.7 million in overpayments.

Industrial Exhibit Authority: Controls Over Trade Agreements (2008-S-91)
The Industrial Exhibit Authority works with the Department of Agriculture and Markets in presenting the New York State Fair. Sponsors of the Fair purchase space to display and advertise their products. In some cases, the sponsors purchase this space by providing goods and services to the Authority. Auditors examined the Authority’s controls over these trade agreements and found improvements were needed. Auditors identified significant inconsistencies in the valuation process and concluded that the goods and services were overvalued. Auditors also identified instances in which there was little or no evidence the goods or services were actually received from the sponsors.

Division of State Police: Contract with Crown Communications (2007-R-8)
Crown Communications manages state-owned towers and other communication structures and licenses them to private carriers for a fee. The revenues generated from these licensing agreements are shared by the contractor and the state. Auditors found that revenue had been distributed in accordance with the agreements. However, the Division of State Police maintains records relating to these distributions, and auditors found that these records were not accurate or reliable.

State University of New York: Procurement of Electricity (Follow-Up Report) (2008-F-42)
Each of SUNY’s 64 campuses is responsible for its own electricity purchases. Several of these campuses have joined together, as the SUNY Energy Buying Group, to purchase their power at a lower cost. In a prior audit (2007-S-22), auditors examined whether SUNY was maximizing its opportunity to make wholesale purchases of electricity. Auditors found that SUNY had made significant progress in this area, but recommended actions to increase campus membership in the Energy Buying Group. Auditors followed up on these matters with SUNY officials and found that they had implemented all the audit recommendations.

State University of New York: Equipment Controls and Compliance with Reporting Requirements (2008-S-46)
Auditors examined the controls over equipment inventories at five selected SUNY campuses and identified the need for improvements in certain controls. For example, physical inventories were not always performed annually or by staff who were sufficiently independent of the items being inventoried. Auditors also found that many of SUNY’s campuses were not reporting lost or missing items as required.

Department of Transportation: Quality of Internal Control Certification (2008-S-116)
State agencies and public authorities must annually certify their compliance with internal control provisions. Auditors examined the department’s certification for the year ended March 31, 2008 and found that improvements were needed. For example, information in the certification was not supported by documentation maintained by the department and the department’s internal audit function was not sufficiently independent of its internal control function.

Executive Order 111, which was issued in June 2001, requires all state agencies to purchase a certain portion of their electricity (at least 10 percent by 2005 and 20 percent by 2010) from renewable sources. Audits examined compliance with Executive Order 111 and found:

Government Accountability
The Office of the State Comptroller regularly audits state agencies, public authorities and New York City agencies. Auditors ensure that programs achieve their established goals, funds are used efficiently and assets are adequately protected against fraud, waste and abuse. DiNapoli’s office completes approximately 200 state audits and annually identifies hundreds of millions in savings and fraud each year.



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