In reports released this week, state Comptroller Thomas DiNapoli updated two Hudson Valley organizations’ progress on complying with problems identified in earlier audits.
A 2009 audit of the Hudson Valley Developmental Disabilities Services Office, one of the state Office for People with Developmental Disabilities’ 13 regional offices, found the local agency officials “were not effectively overseeing” funds for repair and maintenance work that were provided to group homes and other program sites. State auditors said there was little or no proof that officials were making sure contractors were selected through a competitive-bidding process and did not always make sure projects were completed satisfactorily before authorizing payments. There was little evidence increases in costs for projects were justified, the audit said.
The Hudson Valley DDSO, which oversees care provided to roughly 4,500 people in Rockland, Westchester, Orange and Sullivan counties, approved the disbursement of $1.9 million in these funds to 39 agencies for 318 projects for the three fiscal years ending March 31, 2011. Due to a lack of state resources, a total of eight projects with an estimated cost of $106,412 were funded for the two fiscal years ending March 31, 2012. The projects are being financed with money from other sources.
In its follow-up audit, the Comptroller’s Office found that six of its eight recommendations have been implemented, such as ensuring consistent enforcement of controls over the funds that are awarded and no longer reimbursing agencies that didn’t have prior approval for funding. The state Office for People with Developmental Disabilities issued new guidelines to all regional offices and held a training session with officials in the Hudson Valley office.
One recommendation has not been implemented, and the eighth is no longer applicable, according to DiNapoli. The audit advised that the Hudson Valley DDSO investigate circumstances surrounding contract awards and take appropriate action if possible fraud was detected. Hudson Valley DDSO did not investigate the questionable contract awards outlined in the original audit.
A 2009 audit of Empire BlueCross BlueShield payments to Hudson Valley Hospital Center in Cortlandt found that Empire reimbursed the hospital in accordance with the language of Empire’s agreement with Pinnacle HealthCare, a health-care alliance that includes Hudson Valley. However, reimbursement “far exceeded the cost of the items,” the audit said, and the hospital made a profit of $885,680—385 percent above cost, the audit said. The Empire Plan is the primary health-benefits plan for the New York State Insurance Program for active and retired state and local public employees.
The follow-up report said Empire officials have made progress in correcting problems that were identified in the original audit, amending its agreement with the hospital to specify the basis for payment of special items. Empire now audits higher-risk payments to certain providers, although none have been done yet on payments to Hudson Valley Hospital.