Senate Bill S8661

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8661
 
                             I N  S E N A T E
 
                              January 7, 2026
                                ___________
 
 Introduced  by  Sen.  ORTT  --  read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN ACT to require an independent audit  of  New  York  state  government
   programs by a private professional services firm and to mandate refer-
   ral  of  findings  of  fraud  or  abuse to appropriate law enforcement
   authorities

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  findings.  The legislature finds that recent
 reports of widespread fraud involving  government-administered  programs
 in  the  State of Minnesota creates an urgent need for New York State to
 conduct its own independent review of government  spending  programs  to
 identify and prevent fraud and abuse.
   An  independent audit would help ensure that public funds are distrib-
 uted solely to eligible  individuals  and  families  and  to  legitimate
 service  providers  and  not  exploited  by  scammers seeking to exploit
 taxpayer-funded programs.
   The New York State budget has grown  to  approximately  $254  billion,
 representing an unprecedented level of public spending. The size of this
 budget,  which is nearly the size of Florida and Texas budgets combined,
 creates increased opportunities for fraud, waste, and abuse if  adequate
 oversight is not maintained.
   There  is no doubt there is fraud occurring in this state as evidenced
 by recent scandals.  In July, the United States  Department  of  Justice
 uncovered a $68 million Medicaid fraud scheme involving a Brooklyn-based
 operator  who  paid  illegal  kickbacks  through  social  adult day care
 centers.
   Accordingly, the legislature determines that requiring an independent,
 professional audit of state government programs, with  mandatory  refer-
 rals  of  substantiated  findings  of  fraud or abuse to appropriate law
 enforcement agencies, is necessary to ensure taxpayer dollars  are  only
 being  sent  to  legitimate individuals and organizations and fraudsters
 are  held accountable.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14336-02-6
              

 S. 8661                             2
 
   § 2. Independent audit. The state comptroller,  in  consultation  with
 the director of the budget, shall procure, pursuant to article 11 of the
 state  finance  law,  the  services  of  one or more independent private
 professional services firms with expertise in accounting, auditing,  and
 fraud  detection  to  conduct  a comprehensive audit of state government
 programs receiving state funds.
   (a) The audit shall examine, among others:
   1. Whether individuals receiving state funds are eligible  to  receive
 such funds;
   2.  Whether  contractors,  grantees or service providers are complying
 with applicable state and federal laws and rules;
   3. Internal controls used by state agencies to  prevent,  detect,  and
 address fraud, waste, and abuse; and
   4. Any payments, claims, or expenditures that appear improper or frau-
 dulent, or are an abuse of taxpayer money.
   (b) All state agencies and public authorities shall provide the audit-
 ing  firm with full and prompt access to information deemed necessary to
 carry out the audit, including any records  or  data  related  to  state
 funds.
   (c) The auditing firm shall submit a written report of its findings to
 the  governor, the temporary president of the senate, the speaker of the
 assembly, the minority leader of the senate, the minority leader of  the
 assembly,  the state comptroller, and the attorney general no later than
 twelve months after the effective date  of  this  section.  Such  report
 shall  include  recommendations for corrective action and improved over-
 sight of government spending programs.
   § 3. Referral of fraud or abuse.  If the auditing firm identifies  any
 fraud,  abuse, or other unlawful conduct that has occurred, the auditing
 firm shall immediately refer such  findings,  together  with  supporting
 documentation,  to  the  appropriate  law enforcement agency.   Such law
 enforcement agency shall include but not  be  limited  to  the  attorney
 general,  district attorney, or the United States Department of Justice,
 as applicable.
   § 4. Public disclosure of report. The final audit report shall be made
 publicly available on the websites of  the  state  comptroller  and  the
 division of the budget.
   § 5. This act shall take effect immediately.