The Northern Westchester Examiner

Phoenix House Under Scrutiny from State Comptroller

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Phoenix Houses of New York, which runs a facility in Shrub Oak, provided inappropriate perks to its executives exceeding $223,000 while under contract with the Office of Alcoholism and Substance Abuse Services (OASAS), according to a report released last week by State Comptroller Thomas DiNapoli.

DiNapoli’s report, which was referred to U.S. Attorney Preet Bharara for review, found that Phoenix House, which provides chemical dependency and gambling treatment at various locations in the New York City surrounding area, paid $91,050 for executive bonuses, $40,447 for fringe benefits and $35,996 for vehicle leases from July 2009 to June 2010. Phoenix House claimed more than $75,000 for these and other administrative costs and was reimbursed by OASAS. It also paid a departing director $40,400 plus a car valued at $15,586 as part of a separation agreement, in possible violation of law.

“This was money intended to treat people struggling with substance and gambling addiction, not to subsidize unwarranted perks for high salaried executives,” DiNapoli said. “OASAS has to improve its oversight of service providers to ensure they are not enriching their executives at the expense of New York taxpayers.”

In addition, Phoenix House officials failed to report $290,000 in Medicaid revenue to OASAS, which would have reduced OASAS payments to Phoenix Houses, and auditors and investigators uncovered nearly $4,000 in improper purchases of Wal-Mart gift cards by a Phoenix House employee in Shrub Oak, who used the cards to buy alcohol, cigarettes and other items, and then attempted to conceal the purchases by submitting invalid receipts.

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