Audit: Treatment center gave questionable perks

ALBANY -- A substance-abuse treatment provider gave questionable perks -- paying bonuses and car leases, and covering cigarette purchases from Walmart -- to executives, including one from Long Island, state Comptroller Thomas DiNapoli said Wednesday.

The comptroller referred the audit to the U.S. attorney's office in Manhattan for possible prosecution.

At issue are operations at Phoenix House, which provides treatment services in 10 states. It operates in more than 20 New York locations, with facilities in Brentwood, East Hampton, Hauppauge and Lake Ronkonkoma, providing services through a contract with the state Office of Alcoholism and Substance Abuse Services.


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DiNapoli's audit found $223,000 in questionable perks, including $91,050 for executive bonuses, $40,447 for fringe benefits and $35,996 to lease vehicles. Among the examples DiNapoli cited were:

A vice president of finance at the Brentwood Residential Campus who got a $10,050 bonus on top of her salary of $175,976.

An administrative assistant who spent almost $4,000 on personal items from Walmart, including alcohol, cigarettes and weight-loss supplements.

A deputy director who supplied forged and backdated bid documents to auditors. The employee claimed she lost her electronic mail from before 2010 when she switched to a new computer. The emails included some bid documents originally sent to her in 2009.

A departing director who was paid $40,400 and got a car valued at $15,586 under a separation agreement DiNapoli said may have violated the 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 in a statement.

"My office will work closely with U.S. Attorney Preet Bharara's office to ensure that those abusing the public trust are held accountable," said DiNapoli, a Democrat.

Howard Meitiner, Phoenix House president and chief executive, said "Phoenix House takes this audit seriously and began addressing the specific findings months ago."

Meitiner said the provider has partnered with the state for 46 years, and helped tens of thousands of people. He said Phoenix House will continue working with officials to "address these issues and bring this matter to a close."

Phoenix House is one of many contractors the state hires to care for substance-abuse patients. The state paid Phoenix House $8.5 million from July 1, 2009, to June 30, 2010, the period of the audit.

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