Auditors examined a three-year period ending June 30, 2016 and determined that PHNY received reimbursement for expenses that did not comply with the contract. This included approximately $2.9 million in unallowable or unsupported parent organization administrative expenses.
For example, PHNY's parent organization periodically allocates its administrative costs to its affiliates throughout the country. When an affiliate in one state did not have the revenue to fund their share of these costs, the parent organization reallocated a portion to PHNY and New York was billed for the other state's share. All told, New York was billed $850,000 for these costs.