A comprehensive analysis by the State Financial Officers Foundation and OpenTheBooks.com has identified significant oversight gaps in New York’s Medicaid and unemployment systems, revealing billions in taxpayer funding exposed to fraud, waste, and abuse.
The report, based on audits from the New York State Comptroller’s Office between 2018 and mid-2026, highlights Medicaid verification lapses, $11 billion in potentially improper unemployment payments during the pandemic, and widespread failures to enforce financial safeguards across state agencies and local entities.
Between January 2021 and March 2023, New York disbursed $31.5 billion for Medicaid personal-care services, with $14.5 billion (approximately 46%) lacking electronic records to verify service delivery. A 2024 Comptroller audit revealed the state had the capability to block payments without required Electronic Visit Verification (EVV) documentation but had not activated this feature.
The New York State Capitol building in Albany, listed on the National Register of Historic Places, stands as a focal point for legislative oversight reforms. (Getty Images)
Auditors emphasized that missing records do not confirm fraud or nonexistent services. The New York State Department of Health objected to some findings, citing discrepancies in data collection methods.
Additional Medicaid irregularities included $21.3 million in payments for services rendered while patients were hospitalized or durations too brief for reimbursement eligibility.
“This audit exposed a serious failure to adhere to service verification protocols,” Comptroller Thomas DiNapoli stated. “The Department of Health must enhance its oversight to protect Medicaid funds.”
New York Governor Kathy Hochul addresses the press at a recent briefing on state fiscal accountability measures. (Michael M. Santiago)
Pandemic unemployment benefits totaled $76.3 billion in FY 2020-21, with $11 billion flagged as potentially improper based on fraud rate extrapolations. The Comptroller’s Office noted this figure may understate losses given heightened fraud risks during emergency programs. New York’s unemployment system had been criticized for outdated infrastructure as early as 2010, with insufficient modernization prior to the pandemic.
A separate audit identified $1.2 billion in Medicaid managed-care premiums paid for recipients possibly ineligible due to residency discrepancies, raising eligibility verification concerns.
State Comptroller Thomas DiNapoli addresses the Financial Control Board on August 12, 2026, emphasizing accountability reforms. (Michael M. Santiago/Getty Images)
Local oversight failures included embezzlement by a fire company treasurer ($850,000 over eight years) and a court clerk ($60,000 in stolen fees). In NYC’s Mitchell-Lama affordable housing program, vacancy violations contributed to $9 million in missed rental income, with some corrective actions remaining incomplete.
The Comptroller’s office affirmed ongoing efforts to strengthen anti-fraud controls through audits and partnerships with state and federal law enforcement to prosecute violators.
