S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3377
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 29, 2019
                                ___________
 
 Introduced by M. of A. NORRIS -- read once and referred to the Committee
   on Governmental Operations
 
 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.
   § 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:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02956-01-9

 A. 3377                             2
 
   (A) IS IN THE EXECUTIVE BRANCH OF STATE GOVERNMENT; AND
   (B) IS CREATED BY STATUTE.
   § 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.
   § 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.
   §  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

 A. 3377                             3
 
 SHALL EXPEND OR RETURN THE FEDERAL MONEY IN ACCORDANCE WITH THE RULES OF
 THE FEDERAL PROGRAM THROUGH WHICH THE AGENCY RECEIVED THE FEDERAL MONEY.
   §  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.
   § 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, 2019.
   § 3. This act shall take effect immediately.