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Last month as the state deficit continued to grow the legislature’s Democratic Majority called for an audit of the Department of Social Services, which it claims may have a $100 million surplus in its Medicaid account that it has continued to carry over from year to year.

State Comptroller Nancy Wyman said her office will hire a private company to see if DSS is wasting taxpayer money and whether efficiencies can be achieved. 

However, DSS Commissioner Michael Starkowski warned Wyman in this letter last week that the company she intends to hire for the audit may have a conflict of interest.

Wyman announced on Sept. 24 that her office was negotiating a contract to hire UHY International to conduct the audit, which she estimated would cost the state less than $100,000.

“I feel compelled to bring to your attention that UHY Advisors, affiliated with Urbach Hacker Young International Limited, is currently representing two service providers who have rate appeals before the Department of Social Services,” Starkowski wrote in this Oct. 1 letter to Wyman.

“Moreover, UHY Advisors is – -on record as representing 41 other private providers at DSS,” he wrote.

“Given that UHY would be looking at DSS records, logs, financial statements and other documents as part of your audit, it is highly inappropriate and, in fact, a gross conflict of interest for this organization to have access to such information while representing and attempting to “deliver” for private clients,” Starkowski wrote.

In this attachment, Starkowski outlined six reasons why Wyman should not use UHY for the audit. The fourth reason being, “UHY would have perceived ability to leverage DSS on rate-setting appeals involving taxpayer dollars. Potential for attempted undue influence on DSS decisions because of powerful position as an auditor of the department.”

Wyman said last Thursday that Starkowski’s response was a little premature. She said her office looked at UHY because it knows it has expertise in the health care industry. She said her office has discussed subcontracting out any work it perceives would be a conflict of interest for UHY.

“We want someone going in there with an open mind,” she said.