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May 11, 2010

DiNapoli: $81 Million in Improper Payments Uncovered

A typing error nearly cost taxpayers $5.5 million for a bill that was only $92, State Comptroller Thomas P. DiNapoli said today. Before the bill was paid, auditors in DiNapoli’s office caught and corrected the mistake. In 2009, DiNapoli’s auditors stopped or uncovered approximately $81 million in improper or fraudulent state payments, of which, $66 million was stopped before it was paid or recovered for the state.

DiNapoli’s office processed an average of 263,000 state payments daily in 2009. The number of payments more than doubled from the previous year because of the jump in economic stimulus payments made to those receiving unemployment checks.

“Every day, my office balances the state’s checkbook. We find mistakes, identify fraud and make sure that we get the goods and services the state paid for,” DiNapoli said. “During these tough fiscal times, it’s even more important that we protect every taxpayer dime. New Yorkers can’t afford to pay for a $5 million typo.”

Highlights of improper payments and other actions include:

  • A $5.5 million payment from the Uninsured Employers’ Fund managed by the Workers’ Compensation Board was stopped. DiNapoli’s auditors found a typing error and the payment should only have been $92. Another one-time payment of $10,400 was incorrectly coded as a bi-weekly payment. If the payment had not been caught by auditors, the state would have overpaid $260,000.
  • A $1 million payment from SUNY Purchase College to the Dormitory Authority of the State of New York (DASNY) was not approved. The Comptroller’s office found that work had not been completed on a masonry and roofing project.
  • $29,000 in suspicious credit card charges were made by three state employees working at the Department of Transportation, SUNY College of Optometry and the Office of Parks, Recreation and Historic Preservation for personal items. Criminal actions are being pursued.
  • $7.4 million was offset from vendor payments to recover monies owed the state.

DiNapoli’s office is responsible for auditing payments before they are made by the state. His office has an automated system that filters payments based on risk factors to detect questionable payments. Hundreds of payments are flagged daily and audited, including worker’s compensation claims, tax refunds, State Insurance Fund payments, unemployment benefits and payments for goods and services. The Comptroller’s office also conducts post-audits of payments, particularly for state contracts, to ensure that terms of contracts are met. In State Fiscal Year 2009-10, DiNapoli’s office processed 76 million payments totaling $108 billion.


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