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Drug Treatment Center Audit Exposes $1 Million In Shady Spending

Samaritan Village has been accused by the IRS of "questionable expenses" that include lavishing clients with "walk around money."

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By McCarton Ackerman

03/05/14

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A New York City drug treatment center is now facing major backlash from the Internal Revenue Service after being accused of nearly $1 million in shady spending. The recent audit showed that Samaritan Village, which provides residential, outpatient and methadone treatment, billed the state for $973,881 between July 1, 2009, and June 30, 2010, for unallowable, inappropriate, questionable, or undocumented expenses. The treatment center is currently under a $73.3 million, five-year contract with the state that expires this June.

The questionable expenses of Samaritan Village involved giving clients nearly $407,000 to spend on day trips and public transportation, including $132,541 for “walk around money.” Most of these payouts were unnecessary because clients already received a personal needs allowance that covered these expenses. The audit conducted by state Controller Thomas DiNapoli also found that that nonprofit gave 203 employees non-performance based bonuses of $1,083, which totaled $220,000. DiNapoli said the bonuses were a reallocation of unspent state money.

The state Office of Alcoholism and Substance Abuse Services was also slammed by the audit for ineffectively monitoring how Samaritan Village spent its money, declaring that the agency “needs to improve its oversight of how contractors are using public money so taxpayers don’t get the short end of the stick.” But the agency’s general counsel, Robert Kent, objected to many of the audit findings and said they had greatly improved monitoring in recent years.

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