DiNapoli Disappointed In Lack Of Procurement Reform

Comptroller Tom DiNapoli in a statement called the lack of procurement a “missed opportunity” at the end of the legislative session in Albany.

Lawmakers have left town without voting for any reforms to oversight or transparency to economic development spending.

The Legislature had sought, among other items, to restore DiNapoli’s procurement power for spending that pass through SUNY and CUNY-related entities, a common vehicle for economic development funding.

“The failure to enact procurement reform was a missed opportunity to protect taxpayers’ dollars and prevent corruption,” DiNapoli said. “Enhancing independent oversight of state contracting, especially with regard to economic development spending, is needed to ensure accountability and transparency. I hope the legislature will consider the clean contracting proposal when they reconvene.”

Gov. Andrew Cuomo had opposed the bill, seeking instead to appoint a inspector general who would oversee contracting at state agencies. Other measures, including bills that would increase transparency for the regional state economic development councils and the START-UP NY program also faltered.

DFS Report Of DiNapoli’s Oversight Coming Soon

The Department of Financial Services will soon release a report that is expected to take a critical view of Comptroller Tom DiNapoli’s oversight of legislative spending, according to sources familiar with the matter.

A source pointed to a possible focus in particular on the legal requirements in both the state constitution and the state finance law for the comptroller to audit and approve state spending — essentially suggesting the office isn’t simply a “pass through” entity for spending.

According to one lawyer who has reviewed the law and constitutional provision, the comptroller’s office “has an affirmative obligation and is legally required to conduct these audits.”

DiNapoli is a former member of the state Legislature, having been put into the post initially in 2007 by the Democratic-led Assembly.

“The law is clear — the comptroller has a fiduciary responsibility to audit and verify, but he’s said time and again that he’s been nothing but a rubber stamp for legislative payments since Shelly appointed him,” a source said. “He has a real problem on his hands.”

The comptroller’s office sees things a lot differently.

Since the time he took office, DiNapoli’s office has sought to shine a light on legislative spending by posting contracts entered into by both the Senate and Assembly. A monthly press release, also, is issued directing the public to contracting and spending that’s been approved.

At the same time, the comptroller’s office has disclosed legislative per diems online that is updated quarterly.

A wealth of this information is found on the comptroller’s Open Book website.

The comptroller’s office also points to its own auditing functions that oversee tens of thousands, if not hundreds of thousands, of daily transactions. The comptroller’s office uses a method of accounting typically deployed by large entities — think the 10 largest corporations — through an analytical approach that flags high-risk transactions.

The comptroller’s office also argues payments are routinely halted when a red flag goes up, in addition to an annual financial audit.

The DFS audit would come amid increasing tensions between Gov. Andrew Cuomo and DiNapoli, two longtime rivals in state government. It also would not be the first time DFS has released a critical review of DiNapoli’s handling of his duties. The agency in December issued a report that took a critical view of fees paid out to hedge funds that provided relatively poor returns on the investment — an assessment that DiNapoli vehemently disagreed with when it was released.

Meanwhile, a controversy erupted last month over the practice of the Senate arranging for stipends to those lawmakers who hold vice committee chair posts and receiving payments normally reserved for committee chairs. DiNapoli’s office was involved in approving those payments to the Senate.

The comptroller is seeking a bill that would re-instate his oversight power for procurement and state contracting at entities affiliated with SUNY and CUNY — a measure that’s being sought in the final days of the legislative session, due to end on Wednesday.

DiNapoli: NYC Has $3.7B Surplus, But Federal Funding At Risk

New York City’s $3.7 billion surplus is at risk from cuts in federal funding, Comptroller Tom DiNapoli said in a report released on Thursday.

“The President’s proposed budget would make steep reductions in programs upon which city residents rely and poses a major risk to future city budgets,” DiNapoli said. “The city should continue to increase its reserves to cushion against the potential for federal budget cuts and the possible roll back of the Affordable Care Act.”

New York City’s surplus comes from $2.2 billion in reserves and a $1.5 billion citywide savings program. The city is balancing its budget by transferring the surplus. Out-year gaps show deficits of $3.6 billion in 2019 and $3 billion in 2020.

Those gaps are comparatively small when the share of the city fund revenues are taken into account, the report found.

But federal cuts could put New York City’s finances at risk, with programs such as the Health and Hospitals Corp., the New York City Housing Authority and the Metropolitan Transportation Authority all having a close financial relationship with the federal government.

Pension Fund Closes Out Fiscal Year At $192B

The state pension fund closed out the 2016-17 state fiscal year valued at $192 billion with an estimated rate of return 11.42 percent, Comptroller Tom DiNapoli on Tuesday said.

“Strong returns over the fiscal year, particularly in the fourth quarter, were driven by rising public equity markets,” DiNapoli said. “New York state’s pension fund is at a record value based on prudent long term asset allocation. We continue to manage one of best funded, best performing pension plans in the nation and that’s great news for the more than one million men and women who participate in it, as well as for New York taxpayers.”

Private equity funds resulted in a 7 percent rate of return, while real estate returned 10.68 percent, DiNapoli’s office said.

New York’s pension fund is the third largest in the country which will provide retirement benefits to more than 1 million active state and local government workers.

DiNapoli’s office moved to reduce employer contribution rates in 2013-14 through 2015-16, with rates remaining stable in the current fiscal year that began April 1.

DiNapoli: Rocky Road Ahead For State Finances

There’s trouble on the horizon for New York’s finances, as a combination of reduced tax revenue and looming federal budget cuts could result in a more challenging fiscal picture for the state, according to Comptroller Tom DiNapoli.

At the same time, DiNapoli in a report released on Thursday questioned the agreed-upon state budget approved 10 days past its April 1 due date, pointing to an increasing lack of transparency in the process.

“Although the budget came together more than a week into the fiscal year, the Legislature and Executive acted on critical budget issues that will help New York move forward. However, billions of dollars in spending lacks key details that would better inform the public about how their tax dollars are being spent,” DiNapoli said.

“It should concern all New Yorkers that budget decisions in Washington may force tough fiscal choices for the state and raise new questions for local governments and nonprofits that rely on state funding. Federal actions that could adversely affect New York, as well as economic uncertainty, are key risks to this budget.”

The report raises concerns of tax revenue that dried up in the most recent fiscal year as state officials revised revenue estimates downward on four separate occasions.

Tax collections were down $2.8 billion below initial projections, but revenue was offset in part by higher-than-expected hikes in federal revenue.

That won’t necessarily last, however, as Republicans in Congress and the Trump administration eye spending cuts this year.

2017 18 Enacted Budget Report by Nick Reisman on Scribd

DiNapoli Audit Criticizes Economic Development Reporting (Updated)

The Empire State Development Corp. hasn’t meant legal reporting requirements for tax credits and other job-creation programs which has reduced transparency in the process, a report released Wednesday by Comptroller Tom DiNapoli’s office found.

The report — the conclusions of which are staunchly denied by ESD officials — is a slap at Gov. Andrew Cuomo’s administration and the efforts to heavily fund economic development programs, which have come under scrutiny by federal and state prosecutors in recent years as well as criticism from the governor’s political opponents.

The audit found the agency had failed to release performance outcomes for economic development programs that were due between April 2012 and September 2016 that were required by law. Meanwhile, 17 programs that had required reviews by independent entities were never evaluated.

The audit was also hampered by a difficulty in obtaining data and feedback from ESD, the report found.

“Too often Empire State Development Corporation is either late or not reporting on the results of economic development programs,” DiNapoli said. “We need better reporting to ensure transparency in economic development spending and to promote an informed analysis on the return of the investments state taxpayers make in these programs.”

DiNapoli called for developing and adhering to procedures that result in meeting statutory requirements when it comes to reporting results.

The state has been criticized in recent years for funding economic programs that has produced mixed results in producing jobs, though administration officials have urged patience and that some efforts, such as the START-UP NY program, are starting bear fruit.

The Empire State Development Corp. in a statement blasted the report, calling it “another example of a political motivated ‘independent audit'” that doesn’t include all the facts.

“‎While this might be a convenient way to distract from what the Comptroller has not done to clean up his own house following a massive fraud within the $178 billion State pension system, we encourage OSC to be more objective in their review of our efforts,” said ESD spokesman Jason Conwall.

“ESD holds itself to the highest standards and consistently adheres to robust standards of transparency and disclosure, while providing sound and timely information to the public – including thousands of pages of reporting, hundreds of publicly accessible meetings, and regular dissemination of important information through email, social media, live webcast and other platforms.”

ESD insisted, too, it remains transparent when conducting reviews of its programs and that it complied with auditors’ requests for information.

Both Cuomo and DiNapoli have had a chilly relationship over the years.

Updated: The comptroller’s office responded to ESD’s claims in a statement of their own.

“Our report deals with facts, not politics,” said spokesman Mark Johnson. “Our audit showed that, despite its protestations, ESD is not reporting to the public the results of myriad programs that are supposed to create economic development and jobs. The comprehensive audit, conducted by professional staff, is an honest assessment of ESD’s failure to show taxpayers what they are getting for their money.”

16s40 by Nick Reisman on Scribd

Tax Collections Decline $300M

The state’s tax collections declined in the fiscal year that ended March 31 by $300 million, according to a year-end cash report released on Wednesday by Comptroller Tom DiNapoli’s office.

Percentage-wise, the decline is a relatively small one, only 0.4 percent from the previous fiscal year.

And DiNapoli in a statement said the state’s cash position remains relatively strong.

“While personal income tax and consumption tax receipts exceeded the latest projections at the end of the fiscal year, they were more than offset by lower business tax collections,” DiNapoli said. “The state remained in a strong cash position starting the new fiscal year, because of factors including General Fund spending that was well below projections and unspent funds from financial settlements.”

All told, the state’s receipts from the fiscal year hit $156.4 billion, a 2 percent increase from the previous year. The received an 8 percent boost in federal aid during 2016-17 fiscal year.

DiNapoli And Church Of England Pressure Exxon On Climate Change

Comptroller Tom DiNapoli and the Church of England are teaming up to pressure ExxonMobil to reveal how it expects its business across the globe will be impacted by efforts to combat climate change.

DiNapoli is once again leveraging the state’s pension fund’s investment in a company to act as an activist investor in order to produce change in how a company functions.

“ExxonMobil has said it supports the Paris Agreement, but those are empty words unless the company backs them up with action,” DiNapoli said in a statement.

“Exxon’s business is extremely vulnerable to changes in climate regulation and consumer demand. Unlike its peers that have agreed to analyze how the effort to limit global warming impacts their portfolio and share those results with investors, Exxon refuses to account for the goals of the Paris Agreement. Irrespective of the current administration’s stance on climate change, countries around the world are moving ahead with policies that will limit greenhouse gas emissions and will likely impact the market for ExxonMobil’s products. ExxonMobil puts itself and its long-term investors at risk by failing to acknowledge this reality.”

DiNapoli’s office and the Church of England have co-filed the proposal with other company investors, including the New York City Retirement Systems and CalPERS.

DiNapoli is not the only state elected official to set Exxon in his sights. Attorney General Eric Schneiderman has been embroiled in a legal battle over the company’s climate change claims and whether it understated its impact.

DiNapoli: If Economic Development Programs Don’t Work, Maybe Pull The Plug

Comptroller Tom DiNapoli in a radio interview on Wednesday questioned why the state continues to spend heavily on economic development programs that have in some cases yielded few gains.

DiNapoli, interview on Fred Dicker’s Talk-1300 radio show, was responding to a question over the 2017-18 state budget removing language that would require reporting for the START-UP NY program, an omission state officials insist was accidental.

“If the program is not working, maybe we don’t need that program,” DiNapoli said, adding, “We don’t have a bottomless pit of money. I do think it’s a fair question to say are there across the board ways this money would be better spent.”

START-UP NY in particular has come under scrutiny for its job creation figures, which Gov. Andrew Cuomo’s administration says is picking up after being in place for the last several years. The program created 757 total jobs in 2016, according to a report released by the Empire State Development Corp. earlier in this month.

DiNapoli, meanwhile, was critical of the budget for not included reforms he believes are necessary for reforming how government contracts are doled out, which were proposed in the wake of a dozen arrests stemming from bid rigging of economic development programs.

“People feel it’s not an honest process, that it’s not a level playing field,” he said.

Considered to have a frosty relationship with Cuomo, DiNapoli plans to run for re-election, he said, and not challenge the governor in a Democratic primary.

“The secret is I’ve got the best job in state government and I’m holding on to it,” DiNapoli said.

He added he doesn’t expect Cuomo to face a Democratic primary challenge as he seeks a third term next year.

“He’s in a very strong position,” DiNapoli said. “I don’t see anyone challenging him for the nomination.”

Comptroller Blocks $21.3M In Questionable Tax Refunds

The state comptroller’s office has blocked the payment of $21.3 million in tax refunds that were deemed either questionable or fraudulent, his office on Monday announced.

The money is a fraction of the $4.4 billion Comptroller Tom DiNapoli’s office has paid out to date for some 4.6 million state refunds. In the coming days, $466 million is expected to be paid out for 471,000 refunds.

“My auditors are committed to safeguarding the funds of honest New Yorkers,” DiNapoli said. “We’ll stay one step ahead of the schemes used by tax cheats, and look to ensure only legitimate refunds are paid.”

Most of the questionable refunds that were stopped had been filed by taxpayers who claimed refundable credits that was based on incorrect information such as inflated or fraudulent dependents or understated income.

There has also been $2.2 million in refunds linked to tax preparers who filed fraudulent returns, DiNapoli’s office said.