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

Office of General Services – Capital Asset Management (2022-S-32)

Capital assets include land, buildings, construction in progress, equipment, library books, artwork and historical treasures, and intangible assets. To improve management of these assets, the state established the Statewide Financial System Asset Management Module (SFS AM). Within the Office of General Services, the Bureau of Capital Assets (BCA) monitors and coordinates SFS AM capital asset inputs, assisting agencies in the management and maintenance of their asset data in SFS AM. Auditors found BCA is not adequately overseeing capital assets reported by state agencies to ensure that these agencies are properly and promptly reporting capital assets. For example, capital assets went unreported in SFS AM, including forklifts, a ticket booth, garages, and dump trucks; and auditors found instances of properties where addresses were marked as state owned in tax parcel data but they did not appear in the SFS AM data.

Empire State Development – Project Tracking Systems and Economic Assistance Program Evaluations (Follow-Up) (2023-F-23)

Over the years, Empire State Development (ESD) has used a mix of desktop applications and server-based platforms to track its various economic development programs. In 2016, ESD’s Board of Directors voted to replace its project tracking system to reduce duplicative data entry, facilitate greater sharing of information, simplify project reporting, and create a central data warehouse. ESD is statutorily required to report on its economic assistance programs as well as perform periodic program evaluations to assess the effectiveness of certain programs. A prior audit, issued in October 2021 found, with few exceptions, that ESD did not evaluate its economic assistance programs to ensure they were meeting their intended goals and furthering ESD’s mission and that, after implementing its new project system, ESD continued to use multiple systems to capture such data. The follow-up found that ESD partially implemented both of the initial report’s audit recommendations.

Office of Mental Health – Maximizing Incentives for Individuals with Disabilities (Follow-Up) (2023-F-33)

The New York Employment Service System (NYESS), administered by the Office of Mental Health (OMH), is a statewide system that centralizes employment service/support information, improves coordination of employment supports, identifies and matches individual job seekers to jobs, generates Ticket to Work program (TTW) documentation, and provides employment-related performance reports. NYESS is also an employment network under the Social Security Administration’s (SSA) TTW program, a voluntary program with the goal of helping SSA beneficiaries reach employment goals and reduce reliance on benefits. A prior audit, issued in August 2022, found that State agencies and employment service providers utilized NYESS infrequently and TTW providers did not fully utilize NYESS’ reporting capabilities. Also, OMH had not developed written policies and procedures related to NYESS or TTW and did not monitor TTW providers and their efforts to ensure that customers were provided services, services provided to customers were properly entered into NYESS, and progress toward achieving goals was tracked. The follow-up found that OMH implemented all four of the initial report’s recommendations.

Department of Labor – Selected Wage Investigation Procedures (Follow-Up) (2023-F-19)

The Department of Labor (DOL) enforces State Labor Laws (Laws), including those that cover minimum wage and overtime, illegal deductions, day-of-rest and meal period requirements, and child labor. DOL can require employers found to be in violation of the Laws to pay restitution of wages. A prior audit, issued in March 2021, found that DOL did not follow its wage investigation procedures for some of the cases reviewed. Auditors also identified opportunities for improvement in contacting employers, reducing times of inactivity in the investigation process, and providing stronger assurance that claimants receive restitution owed, especially when they are paid directly by the employer. The follow-up found that DOL implemented the four recommendations from the initial audit.

Department of Health – Medicaid Program – Improper Payments for Drugs Without a Federal Drug Rebate Agreement (2022-S-40)

The Medicaid Drug Rebate Program, which helps to offset the costs of most covered outpatient drugs dispensed to Medicaid patients, requires drug manufacturers to enter into a national drug rebate agreement (NDRA) in exchange for state Medicaid coverage of most of the manufacturer’s drugs. Manufacturers then pay states rebates on those drugs. Auditors found DOH lacked adequate oversight of Medicaid managed care payments for drugs, which led to improper MCO payments for drugs from manufacturers. Additionally, flaws in DOH’s managed care capitation rate adjustment methodology intended to offset improper managed care payments for drugs from manufacturers without an NDRA resulted in a significant number of encounter claims not being included in the capitation rate adjustments. Accordingly, the audit identified nearly $50.3 million in improper MCO payments for drugs from manufacturers without NDRAs at the time of service that were not included in the rate adjustments.