S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7384

                            I N  S E N A T E

                              April 6, 2010
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Finance

AN ACT to amend the state  finance  law,  in  relation  to  establishing
  audits  of  state agency expenditures to recover overpayments and lost
  discounts

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  state finance law is amended by adding a new article
7-B to read as follows:

                               ARTICLE 7-B
              RECOVERY OF CERTAIN STATE AGENCY OVERPAYMENTS
SECTION 124. DEFINITIONS.
        124-A. CONTRACT CONSULTANTS  FOR  RECOVERY  AUDITS  FOR  CERTAIN
                 OVERPAYMENTS.
        124-B. STATE AGENCIES SUBJECT TO MANDATORY RECOVERY AUDITS.
        124-C. PAYMENT TO CONTRACTORS.
        124-D. FORWARDING REPORTS.
  S 124. DEFINITIONS. AS USED IN THIS ARTICLE:
  1.  OVERPAYMENT.  "OVERPAYMENT" INCLUDES A DUPLICATE PAYMENT MADE TO A
VENDOR FOR A SINGLE INVOICE AND A PAYMENT MADE TO A VENDOR:
  (A) WHEN AN AVAILABLE DISCOUNT FROM THE VENDOR WAS NOT APPLIED;
  (B) FOR A LATE PAYMENT PENALTY THAT  WAS  IMPROPERLY  APPLIED  BY  THE
VENDOR;
  (C)  FOR  SHIPPING COSTS THAT WERE COMPUTED INCORRECTLY OR INCORRECTLY
INCLUDED IN AN INVOICE;
  (D) FOR STATE SALES TAX; OR
  (E) FOR A GOOD OR SERVICE THE VENDOR DID NOT PROVIDE.
  2. STATE AGENCY. "STATE AGENCY" MEANS A DEPARTMENT, COMMISSION, BOARD,
OFFICE, OR OTHER AGENCY, INCLUDING A UNIVERSITY SYSTEM OR AN INSTITUTION
OF HIGHER EDUCATION THAT:
  (A) IS IN THE EXECUTIVE BRANCH OF STATE GOVERNMENT; AND
  (B) IS CREATED BY STATUTE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16251-01-0
              

S. 7384                             2

  S 124-A. CONTRACT CONSULTANTS FOR RECOVERY AUDITS FOR CERTAIN OVERPAY-
MENTS. 1. THE COMPTROLLER SHALL CONTRACT WITH ONE OR MORE CONSULTANTS TO
CONDUCT RECOVERY AUDITS OF PAYMENTS MADE BY STATE AGENCIES  TO  VENDORS.
THE  AUDITS  MUST BE DESIGNATED TO DETECT AND RECOVER OVERPAYMENT TO THE
VENDORS AND TO RECOMMEND IMPROVED STATE AGENCY ACCOUNTING OPERATIONS.
  2. A CONTRACT UNDER THIS SECTION:
  (A)  MAY  PROVIDE  FOR  REASONABLE  COMPENSATION FOR SERVICES PROVIDED
UNDER THE CONTRACT, INCLUDING COMPENSATION DETERMINED BY THE APPLICATION
OF A SPECIFIED PERCENTAGE OF THE TOTAL AMOUNT RECOVERED BECAUSE  OF  THE
CONSULTANT'S AUDIT ACTIVITIES OR RECOMMENDATIONS AS A FEE FOR SERVICES;
  (B)  MAY  PERMIT OR REQUIRE THE CONSULTANT TO PURSUE A JUDICIAL ACTION
IN A COURT INSIDE OR OUTSIDE THIS STATE TO RECOVER AN  OVERPAID  AMOUNT;
AND
  (C) TO ALLOW TIME FOR THE PERFORMANCE OF EXISTING STATE PAYMENT AUDIT-
ING  PROCEDURES,  MAY NOT ALLOW A RECOVERY AUDIT OF A PAYMENT DURING THE
ONE HUNDRED EIGHTY DAY PERIOD AFTER THE DATE THE PAYMENT WAS MADE.
  3. THE COMPTROLLER OR A STATE AGENCY WHOSE PAYMENTS ARE BEING  AUDITED
MAY  PROVIDE A PERSON ACTING UNDER A CONTRACT AUTHORIZED BY THIS SECTION
WITH ANY CONFIDENTIAL INFORMATION IN THE CUSTODY OF THE  COMPTROLLER  OR
STATE  AGENCY  THAT IS NECESSARY FOR THE PERFORMANCE OF THE AUDIT OR THE
RECOVERY OF AN OVERPAYMENT, TO THE  EXTENT  THE  COMPTROLLER  AND  STATE
AGENCY  ARE  NOT PROHIBITED FROM SHARING THE INFORMATION UNDER AN AGREE-
MENT WITH ANOTHER STATE OR THE FEDERAL GOVERNMENT. A PERSON ACTING UNDER
A CONTRACT AUTHORIZED BY THIS SECTION, AND EACH EMPLOYEE OR AGENT OF THE
PERSON, IS SUBJECT TO ALL PROHIBITIONS AGAINST THE DISCLOSURE OF  CONFI-
DENTIAL  INFORMATION  OBTAINED  FROM  THE  STATE  IN CONNECTION WITH THE
CONTRACT THAT APPLY TO THE COMPTROLLER OR APPLICABLE STATE AGENCY OR  AN
EMPLOYEE  OF THE COMPTROLLER OR APPLICABLE STATE AGENCY. A PERSON ACTING
UNDER A CONTRACT AUTHORIZED BY THIS SECTION OR AN EMPLOYEE OR  AGENT  OF
THE  PERSON  WHO  DISCLOSES  CONFIDENTIAL  INFORMATION IN VIOLATION OF A
PROHIBITION MADE APPLICABLE TO THE  PERSON  UNDER  THIS  SUBDIVISION  IS
SUBJECT  TO  THE  SAME  SANCTIONS  AND PENALTIES THAT WOULD APPLY TO THE
COMPTROLLER OR APPLICABLE STATE AGENCY OR AN EMPLOYEE OF THE COMPTROLLER
OR APPLICABLE STATE AGENCY FOR THAT DISCLOSURE.
  S 124-B. STATE AGENCIES SUBJECT TO MANDATORY RECOVERY AUDITS.  1.  THE
COMPTROLLER  SHALL  REQUIRE  THAT  RECOVERY  AUDITS  BE PERFORMED ON THE
PAYMENTS TO VENDORS MADE BY EACH STATE AGENCY THAT  HAS  TOTAL  EXPENDI-
TURES  DURING  A  STATE  FISCAL  BIENNIUM  IN AN AMOUNT THAT EXCEEDS ONE
HUNDRED MILLION DOLLARS. EACH STATE AGENCY SHALL  PROVIDE  THE  RECOVERY
AUDIT CONSULTANT WITH ALL INFORMATION NECESSARY FOR THE AUDIT.
  2.  THE COMPTROLLER MAY EXEMPT FROM THE MANDATORY RECOVERY AUDIT PROC-
ESS A STATE AGENCY THAT HAS A LOW PROPORTION OF ITS EXPENDITURES MADE TO
VENDORS, ACCORDING TO CRITERIA THE  COMPTROLLER  ADOPTS  BY  RULE  AFTER
CONSIDERATION  OF  THE  LIKELY COSTS AND BENEFITS OF PERFORMING RECOVERY
AUDITS FOR AGENCIES THAT  MAKE  RELATIVELY  FEW  OR  SMALL  PAYMENTS  TO
VENDORS.
  S  124-C.  PAYMENT  TO  CONTRACTORS. 1. A STATE AGENCY SHALL PAY, FROM
RECOVERED MONEY  APPROPRIATED  FOR  THAT  PURPOSE,  THE  RECOVERY  AUDIT
CONSULTANT RESPONSIBLE FOR OBTAINING FOR THE AGENCY A REIMBURSEMENT FROM
A VENDOR.
  2. A STATE AGENCY SHALL EXPEND OR RETURN TO THE FEDERAL GOVERNMENT ANY
FEDERAL MONEY THAT IS RECOVERED THROUGH A RECOVERY AUDIT CONDUCTED UNDER
SECTION  ONE  HUNDRED  TWENTY-FOUR-A  OF  THIS ARTICLE. THE STATE AGENCY
SHALL EXPEND OR RETURN THE FEDERAL MONEY IN ACCORDANCE WITH THE RULES OF
THE FEDERAL PROGRAM THROUGH WHICH THE AGENCY RECEIVED THE FEDERAL MONEY.

S. 7384                             3

  S 124-D. FORWARDING REPORTS. 1. THE COMPTROLLER SHALL PROVIDE  COPIES,
INCLUDING  ELECTRONIC  FORM  COPIES,  OF  ANY  REPORTS  RECEIVED  FROM A
CONSULTANT CONTRACTING PURSUANT TO SECTION ONE HUNDRED TWENTY-FOUR-A  OF
THIS ARTICLE TO:
  (A) THE GOVERNOR;
  (B)  THE  SPEAKER  OF  THE ASSEMBLY AND THE TEMPORARY PRESIDENT OF THE
SENATE; AND
  (C) THE MINORITY LEADERS OF THE SENATE AND THE ASSEMBLY.
  2. THE COMPTROLLER SHALL PROVIDE THE COPIES  REQUIRED  BY  SUBDIVISION
ONE  OF  THIS  SECTION NOT LATER THAN THE SEVENTH DAY AFTER THE DATE THE
COMPTROLLER RECEIVES THE CONSULTANT'S REPORT.
  3. NOT LATER THAN AUGUST FIRST OF EACH ODD NUMBERED  YEAR,  THE  COMP-
TROLLER SHALL ISSUE A REPORT TO THE LEGISLATURE SUMMARIZING THE CONTENTS
OF ALL REPORTS RECEIVED UNDER THIS ARTICLE DURING THE STATE FISCAL BIEN-
NIUM ENDING MARCH THIRTY-FIRST OF THE PREVIOUS YEAR.
  S 2. The comptroller shall adopt rules to administer the provisions of
article 7-B of the state finance law as added by section one of this act
not later than August 1, 2010.
  S 3. This act shall take effect immediately.