Long Island Association for AIDS Care, Inc.

Issued Date
September 30, 2014
Health, Department of


The objective of our examination was to determine whether the Long Island Association for AIDS Care, Inc. (LIAAC) charged and the Department of Health AIDS Institute (Institute) reimbursed for appropriate expenses under the terms of contract C023121. We examined select expenses during the period July 1, 2011 through June 30, 2012.


As a Community Service Provider (CSP) since 1986, LIAAC provides services and support for Long Island residents infected and affected by HIV/AIDS or at risk for infection. The contract, valued at $12 million, was for a five year period spanning July 1, 2008 through June 30, 2013. Subsequently, the Department executed a new CSP contract with LIAAC valued at $11.43 million for the period July 1, 2013 through June 30, 2018.

LIAAC rents its principal place of business from the Long Island Network of Community Services (LINCS), a related organization whose stated mission is to support other health and human service organizations on Long Island. In addition to rent, LIAAC pays LINCS for certain insurances and purchases group medical benefits from LINCS, which is self-insured for medical insurance. During our examination period, LIAAC and LINCS shared and compensated the same Chief Executive Officer (CEO) and Chief Financial Officer and had three Board members in common.

Key Findings

We found LIAAC charged and the Institute reimbursed LIAAC $178,466 for inappropriate or questionable expenses during our examination period. This includes reimbursements to LIAAC for expenses that benefited LINCS; expenses that benefitted LIAAC’s CEO and the CEO’s life partner; and other expenses which were inappropriate under the terms and conditions of the contract. This includes:

  • $52,972 for rental expenses paid to LINCS in excess of market rates. Furthermore, the lease with LINCS that LIAAC agreed to included a 30-year non-cancellable term and escalation clauses anomalous with market standards.
  • $5,990 for LINCS’s and its affiliate’s telephone and utility expenses.
  • $26,674 in administrative fees paid to LINCS for which LINCS provided no apparent service.
  • $7,520 for a portion of the CEO’s expense allowance that was used either for personal expenses or the CEO could not support were used for business purposes.
  • $31,190 for subcontracts that were not competitively procured, including one with the CEO’s life partner. This conflict of interest, which was not disclosed to the Institute, has existed since 1988.
  • $10,722 for executive level employees’ fuel expenses that LIAAC could not support were business-related.
  • $43,398 for expenses that were otherwise inappropriate in accordance with contract stipulations.

Holly Reilly

Division of Contracts and Expenditures
Holly Reilly, Director of State Expenditures

Phone: (518) 474-4868; Email: [email protected]
Address: Office of the State Comptroller; Division of Contracts and Expenditures; 110 State Street, 10th Floor; Albany, NY 12236