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Comptroller William C. Thompson, Jr. today announced that Fiscal Year 2005 audits conducted by his office had resulted in $6.6 million in actual revenues and savings and $36.3 million in potential revenue and savings.

The City Charter-mandated report on the Comptroller's audit operations details the findings of 81 audits and special reports issued during July 1, 2004 and June 30, 2005.

Thompson pointed out that he instructed his financial and management audit bureaus to focus on those areas of City operations with the most potential risk of revenue loss, cost overruns, mismanagement, inefficiency, waste, and abuse.

" Over the past four fiscal years, the audits generated by my audit bureaus have identified $172.2 million in actual and potential revenue and savings, and have documented many instances of program inefficiency and mismanagement," Thompson said in his report.

The audits cover a wide range of subjects, including revenue identification and collection, cost savings, program performance, asset management, internal controls, and information technology.

The report includes descriptions of the audits that generated the most actual and potential revenue and savings, including:

• An audit of the compliance of the New York Yankees with their lease agreement disclosed that they underreported their revenue by $9,070,960 and overstated deductions against revenue by $34,489,804. Consequently, the Yankees owed $3,599,575 in additional fees, which they subsequently paid the City.

• An audit of the HIV/AIDS Services Administration of the Human Resources Administration (HRA) revealed that it did not enter into formal contracts, ensure that payments were properly made, and did not ensure that vendors were paid for eligible individuals only. Consequently, HRA made approximately $2.2 million in questionable payments to vendors.
  
  
• An audit of the Office of the Sheriff's child support enforcement services found that the office is ineffective in serving summonses and subpoenas for child support. If the office had taken additional steps to find respondents, $10.6 million in child support payments might have been collected and paid to custodial parents in Fiscal Year 2003.

• An audit of the citywide conservation efforts by the Department of Citywide Administrative Services (DCAS) found that four City facilities have not undertaken New York State Power Authority Energy Cost Reduction (ENCORE) programs that would realize $792,393 in electric energy cost-savings for the City over a 10-year period.

• An audit of the Department of Finance (DOF) found that the agency improperly granted tax abatements to owners of 128 properties, which resulted in the City forgoing $8,063,047 in taxes for tax years 1996/1997 to 2003/2004. Since the abatements granted under this program extend over a 12-year period, the City is at risk of forgoing approximately $5,717,831 in additional property taxes in future years.

Among other notable audits during Fiscal Year 2005 were:

• An audit of HRA's implementation of fair hearing decisions on public assistance and food stamp cases revealed that its 15-day timeframe for the implementation of food stamp decisions conflicted with the State regulations, which require that the clients receive food stamps within 10 days.

• An audit of Bellevue Hospital Center revealed that it has inadequate controls over its inventory of non-controlled drugs and medical and surgical supplies, making them vulnerable to theft and misappropriation.

• An audit of the Department of Corrections commissary operations found inadequate internal controls over commissary inventory, including gross discrepancies between the amounts of inventory on hand and the amounts reported in the inventory records.

The City Charter requires that every City agency be audited once every four years. The Comptroller's Office performs audits and studies of City agencies and public authorities and private entities that receive funding from or generate revenue for the City.

"I will continue to deliver on my commitment as Comptroller to finding ways to maximize revenue, reduce the cost of City government, and improve the efficiency of agency operations," Thompson said.

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