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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

July 30, 2015, Contact: Press Office (518) 474-4015

DiNapoli: Vendor Boosted Fuel Costs During Superstorm Sandy Recovery

Charges Increased By Nearly $20,000 in “Middleman” Fees Over 10 Days

In the emergency response to Superstorm Sandy, the state Division of Military and Naval Affairs (DMNA) used a catering company which tacked on $20,000 in excessive costs, according to a report released today by State Comptroller Thomas P. DiNapoli.

“In times of disasters, most New Yorkers pull together to help each other, not to make a quick buck,” DiNapoli said. “Even under such circumstances, state agencies should keep watch over the public’s money and, in this case, DMNA should now recover any inappropriate fees that were charged.”

DiNapoli found that Arrochar Meats, Inc., a Staten Island caterer which provides food to the New York Army National Guard, inexplicably acted as an unnecessary middleman by purchasing 18,960 gallons of fuel, adding nearly $20,000 to the purchase price and using other companies to deliver the fuel.

DiNapoli’s report concludes that DMNA paid an inflated price for the fuel, up to $1.68 more per gallon than the price offered on state centralized contracts. The rate could be characterized as price gouging had the general public been charged that price. In addition, DMNA also could not confirm that 8,494 gallons of fuel, which cost the state $42,385, were actually delivered.

Auditors also found that lower prices proposed by two other vendors were crossed out and the pricier Arrochar substituted, an action contrary to DMNA’s normal practice. Although the actions to select Arrochar were not illegal, they violated DMNA’s obligation to seek a reasonable cost and act in the best interest of the state.

In response to the Comptroller’s report and recommendations, DMNA officials agreed to review any available records and seek possible restitution from Arrochar Meats.

The full report can be found at:  http://osc.state.ny.us/audits/allaudits/bseaudits/bse20150729.pdf

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