- By Kate Gurnett
- Business & Technology
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“This was money intended to treat people struggling with substance and gambling addiction, not to subsidize unwarranted perks for high-salaried executives,” DiNapoli said. “OASAS has to improve its oversight of service providers to ensure they are not enriching their executives at the expense of New York taxpayers. My office will work closely with U.S. Attorney Bharara’s office to ensure that those abusing the public trust are held accountable.”
DiNapoli’s report found that Phoenix Houses, which provides chemical dependency and gambling treatment at various locations around New York City and Long Island, paid $91,050 for executive bonuses, $40,447 for fringe benefits and $35,996 for vehicle leases from July 2009 to June 2010. Phoenix Houses claimed more than $75,000 for these and other excessive administrative costs and was reimbursed by OASAS. The provider also paid a departing director $40,400 plus a car valued at $15,586 as part of a separation agreement, in possible violation of law.
In addition, Phoenix Houses officials failed to report $290,000 in Medicaid revenue to OASAS, which would have reduced OASAS payments to Phoenix Houses.
During the period under review, OASAS paid Phoenix Houses $8.5 million for gambling and chemical dependency treatment services.
Auditors and investigators also uncovered nearly $4,000 in improper purchases of Wal-Mart gift cards by a Phoenix Houses employee, who used the cards to buy alcohol, cigarettes and other items, and then attempted to conceal the purchases by submitting invalid receipts.
In response to the audit, OASAS noted that it has instituted additional controls and hired new auditors to ensure compliance and will conduct a follow-up audit to explore the findings in the Comptroller's report.
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