Management of Selected Special Revenue Funds

Issued Date
August 02, 2016
Health, Department of


To determine whether the Department of Health (Department) is effectively managing selected special revenue funds to ensure the funds are spent timely and for their intended purposes. Our audit covered the period April 1, 2013 through December 31, 2015.


The Department’s stated mission is to protect, improve, and promote the health, productivity, and well-being of all New Yorkers. Its vision states that New Yorkers will be the healthiest people in the world – living in communities that promote health, protected from health threats, and having access to quality, evidence-based, cost-effective health services. In harmony with that endeavor, the Department administers over 90 special revenue funds, which are supported by specific sources of State-generated revenue and are legally restricted to disbursement for specified purposes. Over a decade ago, the State created four such funds to promote awareness of, and research into, the following health issues: organ donation, autism, diabetes, and multiple sclerosis. Funds are raised primarily through the sale of distinctive license plates in support of the specific causes. More recently, the fund for organ donation (the Life Pass It On Trust Fund) has also begun to benefit from a voluntary $1 donation check-off on license applications. As the statutorily designated administering agency, the Department is responsible for implementing the programs that these funds support, pursuant to appropriations and guiding statutes.

As the following chart shows, the distinctive license plates and license application check-off box have generated just over $1.3 million for the four funds, of which slightly more than $133,000 (10 percent) has been expended. The funds can also receive grants, gifts, or bequests, although this has resulted in only one $10 donation.

Fund (Year Initiated) Life to Date Contributions Life to Date Disbursements
December 2015 Balance
Life Pass It On Trust Fund (2004) $1,076,541 $0 $1,076,541
Autism Awareness Fund (2005) 108,226 37,941 70,285
Drive Out Diabetes Fund (2002) 89,027 64,293 24,734
Multiple Sclerosis Fund (2004) 35,406 31,000 4,406
Totals $1,309,200 $133,234 $1,175,966

Key Findings

  • For two of the funds – Drive Out Diabetes and Multiple Sclerosis – the Department used monies timely and as intended. At the same time, the Department has failed to use $460,000 appropriated by the Legislature for the other funds. Most of this funding is for the Life Pass It On Trust Fund, which had a balance of more than $1 million in December 2015 and has never been used by the Department since its inception over a decade ago.
  • Overall, officials have taken a passive approach to managing and utilizing special revenue funds, lacking any specific plans and policies for fund management and making little effort to promote the funds or raise awareness of their existence. Officials also do not report to the public on how the funds are used and only monitor fund activity when specific issues arise. As a result, they were unaware that, over time, at least $10,000 that should have been deposited in the Drive Out Diabetes Fund was instead diverted to the New York State General Fund because of the Department of Motor Vehicle’s (DMV) failure to properly implement a statutory change that occurred in August 2007.
  • The Department is not effectively or properly promoting, providing public disclosure of, or managing selected special revenue funds. For example, New York ranks among the lowest nationally in registering organ and tissue donors, while the State’s need for donors is among the highest in the country. Yet no disbursements have been made from the Life Pass It On Trust Fund since its inception. Donors who participate in the distinctive license plate registration program do so to support a specific cause and expect the funds to be expended timely.

Key Recommendation

  • Establish and implement fund management controls to ensure that special revenue funds supported by voluntary contributions are utilized timely and for their intended purposes. Such controls should include, but not be limited to:
    • Written plans and policies specifically geared toward the management of specific special revenue funds;
    • Procedures to effectively promote the respective distinctive license plates of each fund, as well as the State’s ability to accept grants, gifts, and bequests for these funds;
    • Public disclosure of how funds are used;
    • Regular monitoring of fund activity; and
    • Communication with DMV regarding revenue deposits and collaborative marketing/ promotional efforts.

Other Related Audits/Reports of Interest

Department of Health: Oversight of the Early Intervention Program’s State Fiscal Agent (2015-S-22)
Department of Health: Nursing Home Surveillance (2015-S-26)

John Buyce

State Government Accountability Contact Information:
Audit Director: John Buyce
Phone: (518) 474-3271; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236