Purpose

To determine whether discretionary spending by the New York State Energy Research and Development Authority complied with its prescribed procedures and such expenses were reasonable, adequately supported, and properly approved. The audit covers the period from April 1, 2010 through March 31, 2012.

Background

The New York State Energy Research and Development Authority (Authority) was created in 1975 to use innovation and technology to solve some of New York’s most difficult energy and environmental problems in ways that improve the State’s economy. The Authority places a premium on objective analysis, collaboration, outreach to obtain multiple perspectives, and information sharing. According to Authority officials, the Authority is committed to public service and strives to be a model of what taxpayers expect from government.

During the audit period, we identified approximately $7 million of Authority spending that was discretionary in nature. Each public authority should have formal policies and procedures specifying which types of discretionary costs are appropriate and dollar thresholds, as appropriate, for such items. In addition, the policies should prescribe the types of supporting documentation and formal approvals that are necessary.

Key Findings

• Of the 137 sampled payments we reviewed, we questioned 46 payments totaling about $102,000. In certain instances, the Authority did not have policies and procedures to ensure the propriety and reasonableness of the discretionary expenses. In other instances, existing Authority policy was not followed, or there was no documentation of the necessity for the purchases or their relationship to the Authority’s core mission.
• Among the questionable expenses were payments for meetings, memberships in professional organizations, and training. In addition, an Authority procurement card was used for personal items and other questionable items, such as movie tickets to be sold to employees.

Key Recommendations

• Examine written policies and procedures to ensure they adequately address the various forms of Authority discretionary spending. The policies and procedures should include (but not be limited to): the definitions of such costs, the required written justification for them, the allowable dollar thresholds, and the formal approvals and supporting documentation required.
• Complete actions to strengthen procurement card policy and thereby deter employees from making personal charges with Authority-issued cards. Require formal justification for purchases charged to procurement cards.

Other Related Audits/Reports of Interest

Battery Park City Authority: Selected Aspects of Discretionary Spending (2012-S-158)
State University Construction Fund: Selected Aspects of Discretionary Spending (2013-S-14)