The New York Power Authority over reported jobs retained through its ReCharge NY program by nearly 30,000 and denied at least 37 companies power through the program due to errors and overrides, an audit from the state comptroller said.

According to the comptroller, NYPA made errors and overrode applicant scores when it distributed low-cost power to companies.

NYPA disputes those claims.

Comptroller Thomas P. DiNapoli’s auditors found NYPA overstated the number of jobs retained under the ReCharge NY program by nearly 30,000 in public reporting.

Auditors were also critical of NYPA’s efforts to monitor whether customers met job targets. It allowed 12 customers, who refused to provide payroll information, to self-certify or provide alternative data, which provided limited assurance that promised job targets were met.

“The New York Power Authority grants low-cost power to hundreds of businesses and not-for-profits, but its methods for determining eligibility were not implemented consistently and contained errors, giving some applicants advantages over others with higher scores,” DiNapoli said.

“NYPA also needs to hold all customers to the same rules when verifying job promises and accurately report this information to taxpayers. NYPA has already acted on some of the auditors’ recommendations, but needs to do more. NYPA should take the measured steps recommended by our auditors to improve operations.”

For its part NYPA largely dismissed the majority of complaints in a lengthy response to the audit.

“The OSC's draft audit makes significant errors in analysis, and recommends actions that NYPA is already undertaking. Regarding NYPA's ReCharge New York Program ("RNY"), the OSC recommends independent and objective review of applicant scoring, omitting that NYPA already provides effective controls,” NYPA’s response said.

“The OSC further reaches conclusions about the RNY program based on outdated statistics in improper interpretations of data NYPA provided to the OSC. OSC reaches these conclusions without having given NYPA management the opportunity to comment during the audit on a number of its conclusions. This resulted in flawed recommendations on the RNY program. Similarly flawed reasoning led to equally erroneous conclusions and recommendations for NYPA's personal property disposal, and energy efficiency programs. Below, NYPA's management responds to each recommendation.”

NYPA spokesman Steven Gosset said charges made by the comptroller's office were based on poor interpretation of data and out dated numbers.

"NYPA stands behind every job saved and created and the commitment it has made to hundreds of companies in helping them achieve low-cost power. ReCharge NY program has been an important driver of economic development responsible for creating 15,000 jobs since 2011 and retaining more than 359,000 jobs while helping leverage more than $30 billion in capital investments, all at no cost to taxpayers.  Any supposed deficiencies in the ReCharge NY program identified in the report, including the calculation of retained jobs, are erroneous.  As pointed out in NYPA’s response to the audit, OSC’s conclusions are based on outdated statistics, a faulty interpretation of data and a failure to understand the mechanics of the RNY program, despite NYPA working closely with OSC over the last 14 months prior to the issuance of this audit," he said in a prepared statement.

Since 2012, NYPA has allocated power through ReCharge NY to businesses and not-for-profits that agreed to retain or create jobs in New York and to make capital investments.

Businesses and not-for-profits must apply to the program, and applications are scored based on 12 criteria for job retention or business expansion.

Overall, NYPA has 910 megawatts (MW) of power it can allocate statewide for economic development. Fifty percent of the power comes from hydropower, and the remaining 50 percent is purchased by NYPA on the open market.

Auditors determined that NYPA overrode several applicants’ scores without publicly disclosing it.

This resulted in 36 applicants receiving no power when they could have based on their scores. It also made errors in the scoring method used to rank applicants for power. For example, auditors examined 41 applicants and found 18 mistakes in how data was entered, causing one company to not get power.

When auditors examined whether NYPA properly disposed of property, they found NYPA sold vehicles below average trade-in values and got rid of scrap metal and plant equipment valued at over $900,000 without ensuring they received a fair price.

Overall, auditors found that NYPA's energy efficiency program was relatively well-run. Auditors encouraged NYPA to ensure it had proper documentation to demonstrate cost savings.

DiNapoli recommended NYPA:

• Conduct an independent and objective review of the power allocation models for accuracy and completeness before applicants are recommended for approval;

• Exclude businesses and not-for-profits that have not signed a contract from any public reporting of program results;

• Take action to reduce contract power allocations when customers do not meet contract commitments, such as power utilization or base employment levels, or document the reasons why no action was taken;

• Establish controls over the valuation and sale of scrap metal and improve controls over fleet asset sales; and

• Require project managers to prepare and maintain records to document the energy efficiency savings.

NYPA officials disputed the auditors’ findings, even though they were given multiple opportunities to weigh in on the auditors’ conclusions, the Comptroller's Office says. NYPA’s full response is included in the audit report, as are detailed comments provided by auditors disputing and clarifying issued raised by NYPA.

Read the report, or go to: http://www.osc.state.ny.us/audits/allaudits/093016/15s20.pdf

DiNapoli has cited numerous concerns on how the state awards economic development benefits, measures success of the various programs and reports to the public.