(The Center Square ) – The State Financial Officers Foundation and federal money accountability watchdog Open the Books details what it characterizes as the “abysmal” lack of fiscal oversight in New York that mostly took place under Gov. Kathy Hochul’s administration and includes billions in unidentified Medicaid money and improper payments related to pandemic unemployment.
CEO of the State Financial Officers Foundation OJ Oleka told The Center Square that “the hardworking taxpayers who fund New York’s quarter-trillion-dollar annual budget simply deserve much better leadership and oversight from their state government.”
Oleka said the new report “breaks down a pattern of abysmal fiscal oversight in New York State that has led to billions of tax dollars arriving at the wrong destination, whether because of blatant fraud or negligence.
“That leaves taxpaying families spending more and the most vulnerable with a safety net filled with holes,” Oleka said.
“A state already struggling with such sky-high costs can’t continue in this direction without its residents feeling pain,” Oleka said. “We sincerely hope this information will lead to accountability gaps getting filled and enforcement errors being corrected.”
According to the report entitled “New York’s Honor System: How Gaps in Oversight Leave Taxpayer Dollars Vulnerable to Fraud, Waste and Abuse,” $14.5 billion in unverified Medicaid home-care payments have been discovered in the state of New York.
Hochul’s media office has not yet responded to The Center Square’s request for comment.
The report said New York left the switch turned off that would have enforced the federal law that every “Medicaid-funded home visit be recorded electronically.”
These billions of unverified dollars do not necessarily mean stolen money, the report said, but mean that New York “cannot demonstrate with certainty that 46% of the largest home care programs in the country, across more than two years, was properly delivered.”
“$14.5 billion works out to $725 unverified per resident across New York’s 20 million residents, and $1,878 unverified per household across New York’s 7,722,646 households,” the report said.
The report also estimated $11 billion in improper pandemic unemployment payments, identified $1.2 billion in Medicaid managed care premiums for those no longer residing in the state, and confirmed $2.6 million as local misappropriations or insider unemployment fraud.
As an example of what it says is poor financial oversight, the report said how over 8.5 years, a volunteer treasurer at a New York fire company misappropriated more than $850,000 in company funds; the company’s budget includes taxpayer dollars.
Similar happenings took place in the Town of Marion by its court clerk as well as at another fire company by a treasurer, the report claims.
In all three cases, the report held the absence of “segregation of duties” – meaning one person “collected, recorded, deposited, and reconciled – and the absence of an independent review responsible for the misappropriations
The lack of fiscal oversight documented, according to the report, occurred from 2018 to 2026, mostly under Hochul’s administration. Hochul became governor in 2021.
The report stated that New York’s budget is $237 billion, which is one of the highest in the nation.
Vice President of Open the Books Christopher Neefus told The Center Square that the lack of fiscal oversight is “reminiscent of what too often happens when federal waste or fraud is identified: not much.”
“No one seems incentivized to fix these problems, or worse, there may be incentives to keep the broken status quo in place,” Neefus said.
“Gov. Hochul recently acknowledged the erosion of the tax base in New York, and the need for wealthy people to support ‘generous’ social programs,” Neefus said. “But national headlines all year have demonstrated the safety net simply cannot run like an honor bar at a wedding.”
“The bar’s been raided and the guests are long past tipsy,” Neefus said. “Taxpayers are right not to want to keep paying that tab.”
