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March 30, 2010

Comptroller DiNapoli Releases Audits

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

Department of Environmental Conservation: Pollution Testing on Exhaust Emissions from Heavy-Duty Vehicles (2008-S-65)
The Department of Environmental Conservation (DEC) performs roadside emissions tests on heavy-duty trucks. Auditors found that DEC’s roadside tests were performed in accordance with the required procedures and all 18 truck inspection facilities visited were equipped with emissions testing equipment that had been certified by DEC. However, auditors found that technological advancements in diesel engines may have made the state’s testing process questionable on engines manufactured after 1996. DEC also conducts inspections of the licensed truck inspection facilities to determine whether their emissions testing equipment is functioning properly and their emissions tests are properly documented. Auditors questioned whether the inspection coverage was adequate, as only 304 of the 619 licensed facilities (49 percent) were inspected in the two years reviewed.

New York City Department of Education: James Monroe Educational Campus: Management of General School Funds (2009-N-1)
The James Monroe Educational Campus, which is located in the Bronx, consists of five separate high schools. Auditors evaluated the financial management practices at four of these high schools for general school funds. They found that the funds were not always appropriately accounted for and expended. For example, three of the schools did not fully document general school fund receipts and expenditures, and auditors identified $5,444 in expenditures that were not student-related, such as reimbursements to school personnel for staff development meals, trips, equipment and postage.

Department of Environmental Conservation: Environmental Protection Fund (2008-S-121)
Each year, the State Legislature appropriates amounts from the Environmental Protection Fund for various environmental programs. The Department of Environmental Conservation is responsible for ensuring that the appropriated amounts are correctly transferred. Auditors examined whether these transfers were made in accordance with legislative instructions, and found that they were. Auditors also examined whether the transfers were completed in a timely manner, and found that certain improvements were needed.

Department of Motor Vehicles: Insurance Carrier Assessments for the Three Years Ended March 31, 2008 (2008-S-161)
The Department of Motor Vehicles assesses insurance carriers for the cost of administering the Motor Vehicle Financial Security Act and the Motor Vehicle Safety Responsibility Act. These assessments are based on financial records maintained by the department. Auditors examined these financial records for the three years ended March 31, 2008 and found that they presented fairly, in all material respects, the costs of administering the two Acts for that period.

Division of State Police: Interest Earned on Seized Assets (2009-S-57)
The Division of State Police maintains control of any cash that is seized during state criminal investigations. When the adjudication relating to such investigations is completed, any forfeited funds and related interest are to be deposited into a special revenue fund and used for enhanced law enforcement purposes. During the 45-month period covered by the audit, the account containing the seized cash had an average daily balance of more than $5 million. Auditors examined whether the division earned as much interest as it could have on this cash during this 45-month period, and found that it earned $593,200 less than it could have earned during the period. Auditors also determined that, contrary to requirements, the division did not transfer any of the interest that was earned to the special revenue fund.

Follow Up Audits:

Empire State Development Corporation: Recycling Program (Follow-Up Report) (2009-F-49)
In a prior audit 2008-S-137, auditors found that ESDC was generally in compliance with state recycling requirements. Auditors recommended that ESDC revise its recycling program to ensure glass was included. When auditors followed up, they found the recommendations had not been fully implemented by ESDC.

Department of Health: Medicaid Fee-for-Service Payments for Managed Care Recipients (Follow-Up Report) (2009-F-36)
The Department of Health uses two methods to pay Medicaid providers: the fee-for-service method and the managed care plan method. In a prior audit 2007-S-100, auditors examined the fee-for-service payments made over a two-year period on behalf of recipients and found about $3 million in payments should not have been made, because the services were covered by the monthly payments to the managed care plans. The inappropriate payments were made because of delays in updating the managed care enrollment information for the recipients. When followed up on, auditors found that an additional $24 million in inappropriate payments had been identified because of actions taken in response to the prior audit and progress had been made in addressing the problems.

Housing Finance Agency: State of New York Mortgage Agency (2010-F-4)
In a prior audit 2008-S-52, auditors examined HFA’s and SONYMA’s practices for enrolling individuals and their dependents in NYSHIP, and found that they were not always obtaining sufficient documentation to demonstrate that individuals being enrolled as dependents qualified for this coverage under state rules. When followed up on, auditors found the problem had been addressed.

Housing Finance Agency: State of New York Mortgage Agency: Accuracy of Employee Retirement Reporting (Follow-Up Report) (2010-F-5)
In a prior audit 2008-S-56, auditors examined HFA’s and SONYMA’s enrollment practices and found that they complied, for the most part, with state requirements. In addition, HFA and SONYMA are required to report certain information to the Retirement System about the enrolled employees’ earnings and number of days worked. Auditors examined these reporting practices and found that the information reported by HFA and SONYMA was, for the most part, accurate. They recommended that HFA and SONYMA make certain improvements in their enrollment and reporting practices, and when followed up on, auditors found that they had been implemented.

Division of Human Rights: Internal Controls Over Selected Financial Operations (Follow-Up Report) (2009-F-17)
In a prior audit 2007-S-25, auditors found that the division did not have an adequate system of internal controls over its basic financial operations. They identified control weaknesses over equipment inventory, purchasing, disbursements, payroll, accounting and information systems, budgeting, and governance. Auditors found that the division had made some progress; however, additional actions were still needed.

Office of Mental Health: High Overtime Payments to Individuals at Hudson River Psychiatric Center (Follow-Up Report) (2009-F-16)
In a prior audit 2006-S-81, auditors examined certain aspects of the center’s overtime payments and found that some employees worked extensive overtime hours. Auditors recommended center officials actively monitor individual employees’ overtime hours and determine whether the hours could be distributed more effectively among Center employees. When followed up on, auditors found that they had implemented the audit’s recommendations.

Division of Military and Naval Affairs: Compliance with Executive Order 111 Requirements to Purchase Power from Renewable Energy Sources (Follow-Up Report) (2009-F-48)
Executive Order 111, which was issued in June 2001, requires all State agencies to purchase a certain portion of their electricity from renewable sources (at least 10 percent by 2005 and 20 percent by 2010). In a prior audit 2008-S-79, auditors found that the Division was purchasing some of its power from renewable sources, but not enough to meet the 10 percent target. Auditors found the problems had been addressed.

State University of New York: Equipment Controls and Compliance with Reporting Requirements (Follow-Up Report) (2010-F-2)
In a prior audit 2008-S-46, auditors examined the controls over equipment inventories at five selected SUNY campuses. They found that the controls were generally adequate, but there was a need for improvement in certain controls. For example, physical inventories were not always performed annually or by staff, who were sufficiently independent of the items being inventoried. When followed up on, auditors found that our recommendations had been implemented.

State 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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