A new report examining New York state audits found billions of dollars in Medicaid payments lacking required verification, an estimated $11 billion in improper unemployment payments and widespread failures to enforce financial safeguards.
The report, produced by the State Financial Officers Foundation and OpenTheBooks.com, reviewed findings from the New York State Comptroller’s Office between 2018 and mid-2026, identifying oversight problems involving Medicaid, unemployment insurance, local governments and affordable housing.
Among the largest findings, New York paid approximately $31.5 billion for Medicaid personal-care services between January 2021 and March 2023, but $14.5 billion — roughly 46% — lacked matching electronic records verifying when services occurred or how long they lasted.
A 2024 Comptroller audit found that the state had a system capable of blocking certain payments without the required Electronic Visit Verification records, but the feature was not activated.
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The missing records do not establish that the payments were fraudulent or that services were never provided. The New York State Department of Health disputed aspects of the findings, citing differences in how electronic records were collected.
Auditors separately flagged $21.3 million in potentially improper Medicaid payments, including visits billed while patients were hospitalized or lasting too briefly to qualify for reimbursement.
“This audit found a disturbing lack of oversight and failure to comply with the required service verifications,” New York State Comptroller Thomas DiNapoli said in the 2024 audit. “The state Department of Health needs to do a better job of protecting the integrity of these services and safeguard Medicaid funds.”
The report also highlighted an estimated $11 billion in improper unemployment payments during the COVID-19 pandemic, when New York paid $76.3 billion in benefits during fiscal year 2020-21.
The estimate was based on an extrapolation of fraud rates, not confirmed fraudulent claims. The Comptroller’s Office said the figure could understate losses because pandemic programs carried heightened fraud risks.
DiNapoli’s office said in a statement to FOX Business on Tuesday that it “works to strengthen controls through our audits to prevent fraud and teams with law enforcement on the state and federal level to root it out and hold those who defraud the public accountable.”
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New York’s unemployment system had been flagged as outdated as early as 2010, with additional vulnerabilities identified in 2015, but it was not replaced before the pandemic.
Another audit identified nearly $1.2 billion in Medicaid managed-care premiums paid for recipients who may no longer have lived in New York, raising questions about eligibility checks.
Oversight failures also extended to local organizations. A treasurer at the Hannibal Fire Company in Oswego County misappropriated more than $850,000 over more than eight years, while a Town of Marion court clerk stole nearly $60,000 in fines and fees before pleading guilty and being ordered to pay restitution.
In New York City’s Mitchell-Lama affordable-housing program, auditors found apartment vacancies exceeded city limits, contributing to more than $9 million in unrealized rental income. Follow-up audits found some corrective actions remained incomplete.
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The report cautions that the figures cannot be combined into a single taxpayer loss because they include confirmed theft, potentially improper payments, missing documentation and statistical estimates.
FOX Business reached out to Gov. Kathy Hocul’s office and the New York Department of Health for comment on the new report.
