A comprehensive review of New York state audits has uncovered massive oversight failures that left taxpayers vulnerable to billions in potential fraud and waste, including $14.5 billion in Medicaid payments made without proper verification and an estimated $11 billion in improper unemployment benefits during the pandemic.
Missing Records for Nearly Half of Personal Care Payments
Between January 2021 and March 2023, New York distributed approximately $31.5 billion for Medicaid personal care services. Shockingly, $14.5 billion of these payments—roughly 46 percent—lacked matching electronic records confirming when services occurred or their duration. State auditors discovered that New York possessed a system capable of blocking payments without required Electronic Visit Verification records, but officials never activated this safeguard feature.
State Comptroller Thomas DiNapoli condemned the failures in stark terms. The audit revealed a disturbing lack of oversight and failure to comply with required service verifications, he stated, emphasizing that the Department of Health must better protect Medicaid program integrity. Auditors separately identified $21.3 million in potentially improper payments, including services billed while patients were hospitalized or visits too brief to qualify for reimbursement.
That’s how much the FBI says Medicaid paid for social adult daycare in New York in just five years.
Now, more than 100 providers are under investigation for fraud. Medicaid must be protected for Americans who truly need it.
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Pandemic Unemployment System Failures
The report highlighted catastrophic unemployment insurance problems during the COVID-19 pandemic, when New York distributed $76.3 billion in benefits during fiscal year 2020-21 alone. Analysts estimate $11 billion in improper payments based on fraud rate extrapolations, though the Comptroller’s Office warned this figure likely understates actual losses given heightened pandemic-era fraud risks. The unemployment system’s vulnerabilities were no secret—officials flagged it as outdated in 2010 and identified additional weaknesses in 2015, yet the state failed to modernize before the pandemic struck.
Widespread Financial Control Failures
The investigation exposed additional breakdowns across multiple programs. Auditors questioned nearly $1.2 billion in Medicaid managed-care premiums paid for recipients who may no longer have resided in New York, raising serious eligibility verification concerns. Local government oversight also failed spectacularly. A treasurer at the Hannibal Fire Company in Oswego County misappropriated over $850,000 across eight years, while a Town of Marion court clerk stole nearly $60,000 in public funds before facing criminal charges.
What This Means for Taxpayers
The State Financial Officers Foundation and OpenTheBooks.com compiled this analysis by reviewing New York State Comptroller audits from 2018 through mid-2026. While the figures cannot be combined into a single loss total—they include confirmed theft, potentially improper payments, missing documentation, and statistical estimates—the pattern reveals systemic failures to protect taxpayer dollars. These findings demonstrate how weak government oversight and failure to implement basic financial controls enable massive waste and potential fraud, ultimately forcing hardworking taxpayers to bear the burden of bureaucratic incompetence.