Department of Health, Office of General Services: State Public Health Emergency Medical Stockpile, Report 2023-S-14 (Office of the New York State Comptroller)

Summary

The New York State Comptroller's Report 2023-S-14, dated April 2025, audits how the Department of Health and the Office of General Services bought and maintained medical equipment for the COVID-19 emergency from January 2020 through June 2024. It finds DOH incurred $452.8 million to procure 247,343 items of durable medical equipment, of which only three were distributed during the emergency, leaving 247,340 items unused in warehouses. For four of five sampled credit card transactions worth $329,790, DOH could not provide proof of delivery for 140 items totaling $312,644. As of December 2024, 4,036 (90%) of the 4,468 items recommended for scheduled preventive maintenance were overdue. The audit recommends that DOH keep basic internal controls in emergencies and develop a plan to use surplus equipment.

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Full text

Department of Health
Office of General Services
State Public Health Emergency Medical
Stockpile

Report 2023-S-14 April 2025

OFFICE OF THE NEW YORK STATE COMPTROLLER
Thomas P. DiNapoli, State Comptroller
Division of State Government Accountability
Audit Highlights

Objective
To determine what steps the Department of Health (DOH) and the Office of General Services (OGS)
have taken during the procurement process for medical equipment for public health emergencies
to ensure usability of the equipment purchased and whether DOH and OGS have managed and
maintained—in functioning condition—the inventory of the State’s medical stockpile. Our audit scope
covered the period from January 2020 through June 2024.

About the Program
DOH’s Office of Health Emergency Preparedness (OHEP) is responsible for coordinating and managing
all activities for public health and health care facility emergency preparedness. This includes planning
for public health emergencies and ensuring emergency plans work in drills, exercises, and real life,
such as during the COVID-19 pandemic. OHEP is responsible for purchasing, receiving, maintaining,
and managing DOH’s Medical Emergency Response Cache (MERC), which is located at warehouses
across the State and includes pharmaceuticals and medical supplies, equipment such as beds and
ventilators, and personal protective equipment (PPE) such as masks and gloves. During emergencies,
as needed, OHEP may distribute PPE or durable medical equipment (DME) from its MERC. For the
purposes of this audit, we concentrated on DME that was necessary in response to the COVID-19
public health emergency, such as ventilators and X-ray machines. Unlike normal procurement
circumstances, DOH was not involved in decisions regarding ordering supplies and DME during the
onset of COVID-19. According to DOH officials, the “former Executive Chamber” was responsible for
DME procurement decisions at that time, with direction from a consultant who, according to OGS, was
responsible for projecting the quantity of DME the State would need to respond to COVID-19. During
the public health emergency, based on paid vouchers and credit card transactions provided by DOH,
we determined DOH incurred costs of $452.8 million to procure 247,343 items of DME. As of June
2024, DOH had 9,519 DME items stored in its warehouses, and 240,051 DME items were stored in the
Division of Homeland Security and Emergency Services (DHSES) warehouses as of March 2024, for a
total State DME inventory of 249,570.

OGS Procurement Services is the State’s centralized procurement office. It solicits, administers,
and manages approximately 1,500 contracts on behalf of State agencies and authorities, local
governments, school districts, colleges and universities, and other qualifying non-profit organizations.
Procurement Services also educates vendors and public purchasers regarding how to participate
effectively in the State’s procurement process.

Key Findings
To compete for the purchase of medical equipment to protect the public health and prepare health
care facilities during the onset of the pandemic, the State took steps to expedite its procurement
process, out of alignment with OGS Procurement Services’ guiding principles. The former Executive’s
chamber dictated the procurement orders, with (according to OGS) the quantity of DME projected by
the consultant, and when the MERC received the procured DME, OHEP was often unaware of and
unable to account for what had been purchased. Specifically, credit card transactions appeared to be
an issue; from four out of five credit card transactions sampled worth $329,790, we found that DOH
could not provide proof of delivery for 140 pieces of DME (e.g., ventilators) totaling $312,644. While
factors beyond OHEP’s control initially contributed to OHEP being unable to confirm receipt of all DME

Report 2023-S-14 1
procured during the pandemic, developing new guidance for future public health emergency disasters
could provide the direction needed for staff to ensure transactions are recorded and communicated and
purchases are received.

Based on paid vouchers and credit card transactions provided by DOH, we determined it incurred costs
of $452.8 million to procure 247,343 items of DME and received 51 items donated by others or received
from the federal government, for a total of 247,394 items procured during the onset of COVID-19 (as
of November 2020). Of the total DME available for use (including pre-COVID-19 inventory), only 324
items were distributed during the public health emergency, and only three from the 247,343 DME
purchased during COVID-19. This leaves a significant amount of DME purchased during the pandemic
(247,340 items) still unused in boxes at warehouses, for which the State continues to incur contracted
warehouse management costs.

After the COVID-19 public health emergency ended, according to DOH officials, a Medical Stockpile
Steering Committee recommended DOH retain 51,140 items of DME in its cache, of which 4,468 items
(9%) should receive scheduled preventive maintenance, leaving almost 200,000 DME items without
a strategic plan for utilization. Further, DOH stated it could not provide documentation supporting how
the Steering Committee reached these decisions regarding how much DME to retain and preventively
maintain. Therefore, we could not analyze the Steering Committee’s decisions and conclusions
regarding specific DME and quantities of DME to be retained and maintained. Additionally, DOH has
conducted surveys of the medical community, with facilities expressing interest in 24,585 DME items,
but has taken limited action overall to reduce its stockpile. Reducing inventory that does not have a
strategic plan could reduce State spending on warehousing unused equipment and assist the State’s
medical community.

Early in the pandemic, DOH contracted with a vendor to perform initial inspections of the DME in the
MERC warehouses, as well as preventive maintenance and repairs on certain equipment. That contract
ended in December 2023, and DOH has not been able to secure another. As of December 2024,
4,036 (90%) of the 4,468 DME items recommended to have scheduled preventive maintenance were
overdue. Missed preventive maintenance may affect product warrantees and risk additional costs to the
State for repairs that could have been covered. In addition, failure to maintain DME increases the risk
that equipment will need more costly repairs or will not be ready for emergency distribution or work as
intended on patients in need.

Key Recommendations
To DOH:

Maintain basic internal controls during emergency scenarios to ensure stewardship over State
assets that address concepts such as conducting transactions in an ordinary manner, recording
transactions, effective communication, and documenting receipt of purchases.
Document and preserve the process and/or key factors used when making significant decisions,
and keep documentation of key events, such as the Steering Committee’s recommendation of
DME to be retained and to receive preventive maintenance.
Develop and implement a statewide public health strategic plan to utilize surplus DME.
Develop and implement a strategic plan for DME preventive maintenance so that it is ready and
reliable for use during public health emergencies.

Report 2023-S-14 2
To OGS:

Develop and issue statewide guidance for State agency procurements during declared State
emergency disasters in conjunction with the State Procurement Council.

Report 2023-S-14 3
Office of the New York State Comptroller
Division of State Government Accountability

April 11, 2025

James V. McDonald, M.D., M.P.H. Jeanette M. Moy
Commissioner Commissioner
Department of Health Office of General Services
Corning Tower Building Corning Tower, 41st floor
Empire State Plaza Albany, NY 12242
Albany, NY 12237

Dear Dr. McDonald and Commissioner Moy:

The Office of the State Comptroller is committed to helping State agencies, public authorities, and
local government agencies manage their resources efficiently and effectively. By so doing, it provides
accountability for the tax dollars spent to support government operations. The Comptroller oversees
the fiscal affairs of State agencies, public authorities, and local government agencies, as well as their
compliance with relevant statutes and their observance of good business practices. This fiscal oversight
is accomplished, in part, through our audits, which identify opportunities for improving operations.
Audits can also identify strategies for reducing costs and strengthening controls that are intended to
safeguard assets.

Following is a report of our audit entitled State Public Health Emergency Medical Stockpile. This audit
was performed pursuant to the State Comptroller’s authority under Article V, Section 1 of the State
Constitution and Article II, Section 8 of the State Finance Law.

This audit’s results and recommendations are resources for you to use in effectively managing your
operations and in meeting the expectations of taxpayers. If you have any questions about this report,
please feel free to contact us.

Respectfully submitted,

Division of State Government Accountability

Report 2023-S-14 4
Contents
Glossary of Terms 6
Background 7
Audit Findings and Recommendations 11
Procurement and Receiving 11
Recommendations 14
Management of DME Inventory 15
Recommendations to DOH 18
DME Not Receiving Preventive Maintenance 18
Recommendations to DOH 21
Audit Scope, Objective, and Methodology 22
Statutory Requirements 23
Authority 23
Reporting Requirements 23
Agency Comments - DOH and State Comptroller’s Comments 24
Agency Comments - OGS and State Comptroller’s Comment 28
Contributors to Report 30

Report 2023-S-14 5
Glossary of Terms

Term Description Identifier
DOH Department of Health Auditee
OGS Office of General Services Auditee

DHSES Division of Homeland Security and Emergency Services NYS Agency
DME Durable medical equipment Key Term
MERC DOH’s Medical Emergency Response Cache Key Term
MERITS DOH’s Medical Emergency Response Inventory Tracking System
System
OHEP Office of Health Emergency Preparedness Office within DOH
PPE Personal protective equipment Key Term
QMG Quality Medical Group Key Term
RFP Request for proposals Key Term
TecSys DHSES’ inventory database System

Report 2023-S-14 6
Background
The Department of Health’s (DOH) Office of Health Emergency Preparedness
(OHEP) is responsible for public health and health care preparedness in accordance
with the Public Health Emergency Preparedness and Hospital Preparedness
Cooperative agreements, as well as the coordination of DOH’s Incident Management
System. State and federal regulations require additional preparedness activities by
other DOH program areas, including the Office of Primary Care & Health System
Management, Office of Aging & Long-Term Care, and Office of Public Health.

Additionally, OHEP’s responsibilities include planning for public health emergencies
and ensuring emergency plans work in drills, exercises, and real life, such as during
the COVID-19 pandemic. OHEP is also responsible for purchasing, receiving,
maintaining, and managing DOH’s Medical Emergency Response Cache (MERC),
which is located at warehouses across the State and includes pharmaceuticals
and medical supplies; equipment such as beds, ventilators, and respirators; and
personal protective equipment (PPE) such as masks and gloves. MERC assets
also include durable medical equipment (DME), which encompasses repeat-use
devices and equipment. For the purposes of this audit, we concentrated on DME that
was necessary in response to the COVID-19 pandemic, such as ventilators, bilevel
positive or continuous positive airway pressure (BiPAP/CPAP) machines, and X-ray
machines.

The first case of COVID-19 in the United States was confirmed in the state of
Washington on January 20, 2020. By the end of January 2020, the World Health
Organization had declared the 2019 Novel Coronavirus, or COVID-19, to be a
public health emergency of international concern. The first case in New York State
was confirmed on March 1, 2020. Just 10 days later, the World Health Organization
declared COVID-19 a pandemic.

With worldwide market demands rapidly increasing as individual consumers went
into a panic attempting to purchase excess supplies such as toilet paper, cleaning
products, and groceries, governments around the world were also competing to
purchase medical equipment to protect public health and prepare health care
facilities.

On March 7, 2020, the former Executive issued Executive Order 202, Declaring a
Disaster Emergency in the State of New York. The executive order authorized all
necessary State agencies to take appropriate action to assist local governments
and individuals in containing, preparing for, responding to, and recovering from the
COVID-19 public health emergency. To expedite the State’s procurement process
in a changing environment, the executive order temporarily suspended typical
procurement such as State Finance Section 112 (requiring Accounting Systems
and New York State Comptroller Approval of Contracts), Section 163 (requiring a
competitive process for Purchasing Services and Commodities), and Section 97-G
(Centralized Services Funds).

Due to the worldwide demand for DME, State officials had limited time when
vetting vendor responsibility and purchasing DME. OGS was responsible for
identifying vendors the State could purchase DME from. OGS began with known

Report 2023-S-14 7
contracted vendors that could provide DME, followed by vendors who had previously
participated in the State’s bidding process but had not been awarded a State contract
or that had been vendors for other states. OGS then contacted familiar entities that
did not manufacture DME (e.g., General Electric, Ford). Finally, when the former
Executive issued an “all-out-call” for any vendor who could provide the needed DME
as a last resort, OGS reached out to vendors previously unknown to the
State. According to OGS, vetting for the unknown vendors was done by
a risk committee that consisted of members of the Executive Chamber,
OGS legal counsel, Division of the Budget, and DOH (but not OGS).
DOH officials advised us they were involved in vetting some vendors in
the DME industry that OGS identified.

According to DOH officials, prior to COVID-19, there were three
MERC warehouses in the State. The number of warehouses used to
accommodate the influx of PPE supplies and DME expanded to around
20 during the COVID-19 public health emergency. By April 2024, MERC
equipment was consolidated down to two DOH and three Division of
Homeland Security and Emergency Services (DHSES) warehouses,
with the DHSES warehouses managed by the contractor LifeScience
Logistics. OHEP uses its in-house database, the Medical Emergency
Response Inventory Tracking System (MERITS), to track its inventory, Pallets of ventilators in their boxes,
and LifeScience Logistics uses a separate database, TecSys, to track plugged in, and charging at the
inventory in the DHSES warehouses. These systems are independent, Guilderland MERC warehouse
and OHEP does not have access to TecSys.

As of June 2024, DOH had 9,519 DME items stored in its warehouses,
and as of March 2024, 240,051 DME items were stored in the DHSES
warehouses, for a total State DME inventory of 249,570. During the
COVID-19 public health emergency, based on paid vouchers and credit
card transactions provided by DOH, we determined the State incurred
costs of $452.8 million to procure 247,343 items of DME and received
51 items either donated by others or the federal government, for a total
of 247,394 items as of November 2020. Purchases included pulse
oximeters, oxygen tanks, infusion pumps, oxygen concentrators,
BiPAP/CPAP machines, ventilators, and X-ray machines.

New York Responds is an online management system used to coordinate
the sharing of emergency resources across the State. To meet an
emergency need for supplies or equipment, a facility contacts its county
emergency manager to request equipment through New York Responds.
DHSES then validates the request and sends the request to the Pallets of ventilators in their
appropriate State agency to be fulfilled. Requests for DME are then sent boxes at the Guilderland MERC
warehouse
to OHEP.

When OHEP “forward deploys” DME to a hospital or medical facility, DOH retains
ownership and may recall the equipment if necessary. Typically, DOH signs a
Letter of Agreement with the requester before forward deploying items. During the
COVID-19 public health emergency, DOH did not enter into Letters of Agreement, but

Report 2023-S-14 8
did record any DME sent (but not sold) to requesters in MERITS as being forward
deployed.

To ensure readiness for forward deployment, maintain manufacturer warranties,
and extend the useful life of DME, preventive maintenance is performed. DOH is
responsible for tracking and coordinating preventive maintenance for its DME at all
warehouses. DOH entered into a contract with Quality Medical Group (QMG) in April
2020 to perform initial inspections of the DME as well as preventive maintenance and
repairs on certain equipment. Facilities with forward-deployed DME are responsible
for the preventive maintenance and repairs while the DME is in their possession.

The focus of this audit is on DOH, as OHEP is typically responsible for the MERC,
and OGS, as the State’s centralized procurement office. However, we note that
during the early stages of the pandemic, several entities, including DOH, OGS,
DHSES, and the New York National Guard may have assisted with purchasing,
storing goods in warehouses, or transporting PPE or DME, as well as confirming the
receipt of equipment when DME was delivered at warehouses throughout the State.
We did not engage the other entities.

OGS Procurement Services is the State’s centralized procurement office. It solicits,
administers, and manages approximately 1,500 contracts on behalf of authorized
contract users including State agencies and authorities, local governments, school
districts, colleges and universities, and other qualifying non-profit organizations. Its
contract offerings include a wide range of commodities, services, and technology
available at competitive, volume-discounted/reduced prices while maintaining
statutory compliance. Procurement Services also educates vendors and public
purchasers regarding how to participate effectively in the State’s procurement
process.

OGS has issued Procurement Guidelines, developed by the State Procurement
Council in accordance with the State Finance Law for State agencies, that provide
an overview of procedural requirements and procurement methodologies. According
to the guidelines, the primary responsibility for procurement decisions rests with the
State agency procuring the commodity, service, or technology. The guidelines also
discuss the values of public procurement including transparency, accountability, and
fair competition and operating principles designed to protect the interests of the State
and its taxpayers.

The Procurement Guidelines also define an emergency procurement as “one in
which an urgent and unexpected situation occurs where health and public safety
or the conservation of public resources is at risk” and states that “State agencies
shall document in the procurement record the circumstances and the material
and substantial reasons why a formal competitive process is not feasible.” The
procurement record documents purchasing decisions made.

State agencies are responsible for recording transactions in the Statewide Financial
System, New York State’s accounting and financial management system. This
system is also where agencies record purchase orders and create and approve
vouchers.

Report 2023-S-14 9
DOH policies and procedures establish controls for its procurement, receiving,
inventory, and shipping. During normal circumstances, OHEP completes its own
purchasing and, in advance of receiving the items, is aware of and documents the
quantity and description of the products ordered, the receiving date, the vendor,
and the purchase order number. This allows OHEP to control and communicate
information for the procurement, receipt, payment, and inventory of equipment.
For example, when purchases are received as scheduled, OHEP is responsible for
entering the product information into MERITS and the Statewide Financial System,
as well as ensuring the items received match the intended procurement. Additionally,
OHEP staff are responsible for filling out a carrier delivery receipt, including the
carrier, supplier quantity, purchase order number, type of item, and any damage to
the items.

Executive Order 202, and subsequent orders, suspended OGS Procurement
Guidelines during the COVID-19 public health emergency, yet bulletin H-0501 issued
by the Division of the Budget clarified the following were still required:

reasonableness of cost/price
documented rationale and need for purchases
quotes from multiple vendors or documentation that vendors could not supply
needed items
use of OGS Procurement Services
use of purchase and receiving orders, and procurement card reconciliation

Report 2023-S-14 10
Audit Findings and Recommendations
Lack of controls during the COVID-19 pandemic contributed to OHEP being unable
to account for all DME purchased. Specifically, credit card transactions appeared to
be an issue: from four of five credit card transactions sampled worth $329,790, we
found that DOH could not provide proof of delivery for 140 pieces of DME totaling
$312,644. While factors beyond DOH’s control affected its ability to account for all
DME procured during the pandemic public emergency disaster, developing State
guidance for future State emergency disasters could help ensure transactions are
recorded and communicated and purchases are received.

Unlike normal procurement circumstances, DOH was not involved in decisions
regarding the ordering of supplies and DME during the onset of COVID-19.
According to DOH officials, the former Executive Chamber was responsible for DME
procurement decisions at that time, with direction from a consultant who, according
to OGS, was responsible for projecting the quantity of DME the State would need to
respond to COVID-19. A significant amount of DME (247,391 items) was acquired
during the pandemic. Of the total DME available for use (including pre-COVID-19
inventory), only 324 items were distributed during the public health emergency, only
three of which were from the 247,343 DME purchased at the onset of COVID-19
at an estimated cost of $452.8 million. This leaves a significant amount of DME
purchased during the pandemic (247,340 items) still unused in boxes at MERC or
DHSES warehouses even though, according to DOH officials, medical facilities in
the State have expressed interest in acquiring it. By not disbursing the unused DME
items, the State continues to incur contracted warehouse management costs. After
the COVID-19 public health emergency ended, according to DOH officials, a steering
committee recommended keeping 51,140 DME items, leaving a surplus of almost
200,000 items without a strategic plan for utilization. DOH has taken limited action
to address the surplus DME stockpile and, according to officials, is in the process of
finalizing how the remaining DME will be distributed.

The contract to perform initial inspections of the DME in the MERC warehouses,
as well as preventive maintenance and repairs on certain equipment, ended in
December 2023, and DOH has not secured another contract for these services. With
no preventive maintenance contract in place, as of December 2024, 4,036 of 4,468
DME items (90%) recommended to receive this maintenance were overdue, along
with six items that do not have a preventive maintenance due date listed. DME that
does not receive preventive maintenance may not work immediately when needed
for a patient, as users may have to order parts or make repairs. Furthermore, failing
to meet preventive maintenance requirements can invalidate warranties and increase
the risk that the State will be responsible for repairs or replacements otherwise
covered at the manufacturer’s expense.

Procurement and Receiving
Lack of controls during the pandemic contributed to OHEP being unable to account
for all DME purchased. Purchasing equipment without confirming its receipt leaves
the State with less assurance that all goods paid for have been received and
potentially wastes funds that could have been used for other purposes.

Report 2023-S-14 11
To compete for the purchase of medical equipment during the onset of the COVID-19
pandemic, the State took steps to expedite its procurement process in a changing
environment. These steps included purchases without formal purchase orders,
purchase orders with incomplete information, down payments on DME prior to
receiving equipment, and credit card purchases. As a result of the expedited process,
the State also failed to follow the OGS Procurement Guidelines. While those involved
in procuring DME were most likely under a great deal of pressure to secure medical
equipment for the people of New York, they did not fulfill their stewardship obligation:
responsible management and planning and use of public resources for the protection
of the State and taxpayers’ interests. Additionally, the basic concepts of internal
controls—recording transactions and communicating information—did not occur.

Unlike normal procurement circumstances, DOH was not involved in decisions
regarding ordering supplies and DME during the onset of COVID-19. According to
DOH officials, the former Executive Chamber was responsible for DME procurement
decisions at that time, with direction from a consultant who, according to OGS, was
responsible for projecting the quantity of DME the State would need to respond
to COVID-19. The former Executive Chamber entered into a contract with the
consulting company, McKinsey & Company (McKinsey), on March 9, 2020. The
contract ended in July 2020 with a total cost of $5.1 million. DOH then entered into
another contract with McKinsey in July 2020 with a total cost of
$10.1 million, which ended on April 30, 2021.

According to DOH officials, the former Executive Chamber ultimately dictated the
DME and quantities to be procured early in the pandemic. OGS officials stated
McKinsey was responsible for projecting the quantity of DME the State would need
to respond to COVID-19. Initially, according to OGS’ Chief Procurement Officer, at
the start of COVID-19, McKinsey provided OGS with a list of DME (e.g., ventilators,
CPAPs, X-ray machines) and the recommended quantities to be procured.

During the course of the audit, we requested OGS provide the DME procurement list
prepared by McKinsey; however, the individual who was OGS Chief Procurement
Officer at the time has since left State service, and OGS could not locate the
requested information. OGS further clarified that it should be part of the procurement
records for the purchasing agencies. As DOH was not involved in ordering supplies
and DME for the State during the pandemic, we were unable to obtain many details
regarding these purchases. For example, we requested the documentation of
McKinsey’s recommended DME procurement from DOH, but DOH officials also
stated they did not have it. Additionally, DOH officials stated the decision-makers
from the prior administration are no longer available to ask for more specific details,
further illustrating the need for appropriate documentation during the purchasing
process. Only after we presented written findings did DOH find a “Pending supply
list.” Officials stated the list was after a majority of the purchasing was done with
bigger projections, but the larger projections were not provided to us.

Although the MERC was receiving DME during COVID-19, OHEP was often
unaware of what had been purchased. While DOH was the funding stream for
DME, DOH officials stated DOH did not approve the type of DME or the quantities

Report 2023-S-14 12
procured. Consequently, at the onset of COVID-19, deliveries of DME,
some scheduled and some unscheduled, would arrive at warehouse
locations and DHSES, the New York National Guard, OGS, or OHEP—
whoever was staffing the warehouse at the time—would record receipt.
Shipments were sometimes received with purchase order information,
with partial purchase order information, or with no purchase order at all.
Regardless, OHEP would determine what was received and enter the
equipment received into MERITS and the Statewide Financial System.
OHEP would then provide detailed information about what was received
to DHSES through email. As the COVID-19 pandemic continued, OHEP
began to require that shipments include purchase order information prior
to accepting them or at least that purchase order numbers be included
with each shipment to ensure what was received was actually ordered.
At the height of the pandemic, MERC officials estimated that as many as
12 trucks arrived at a MERC with DME and PPE per day, and 10 trucks Pallets of oxygen concentrators
would deliver the equipment across the State. and ventilators in their boxes at the
Brentwood MERC warehouse
Based on paid vouchers and credit card transactions provided by DOH,
we determined the State incurred costs of $452.8 million to procure
247,343 items of DME and received 51 items donated by others or received from
the federal government, for a total of 247,394 items as of November 2020. Overall,
between DME owned before the pandemic and DME acquired during COVID-19, we
determined that DOH owned and was responsible for tracking 252,235 items of DME
as of June 2024 (see Table 1).

Table 1 – DOH Durable Medical Equipment Inventory Responsibility
DME Before and During COVID-19
Pre-COVID-19 inventory 4,841
Purchases during COVID-19 247,343
Donated by others or received from the federal government 51
Inventory DOH must track (including forward-deployed DME) 252,235
*This table represents information from beginning inventory March 2020 and January 2024
inventory provided by DOH and LifeScience Logistics inventory provided March 2024.

To assess whether specific purchased items were received into the warehouse,
we compared voucher payment information to inventory data. However, we found
transactional information was not always recorded with details such as serial
numbers for goods shipped. DOH did not have a methodology for tracing voucher
data to the inventory, as there were no common identifiers or fields, and voucher
information did not contain the quantity purchased. When we asked DOH how they
accounted for the transactions, DOH officials stated that they cannot trace a voucher
to a specific item of equipment or the inverse.

While the vouchers and invoices did not contain enough information to relate to
specific items in inventory, we attempted to verify the delivery of goods by matching
purchase orders to the paid voucher data. Purchase orders included the specific
type of equipment (e.g., an LTV 1200 Ventilator or a GE AMX-4 Plus Portable X-Ray
system) and the quantity ordered.

Report 2023-S-14 13
We requested proof of delivery for a sample of nine purchases totaling more than
$62 million, out of 80 purchase orders totaling more than $452 million, that DOH
identified as DME purchases. Of the 80 DME purchase orders, 26 totaling more
than $297 million were payment advances and five were procurement credit card
purchases totaling $329,790. We judgmentally selected nine transactions—four
purchase orders and five procurement credit card transactions—for testing. For the
four purchase orders totaling 1,270 pieces of DME worth $61,973,800, DOH was
able to provide either proof of delivery or an explanation regarding the purchases.

When purchases are made by procurement credit card, a purchase order is not
used and a receiving order is not generated, resulting in warehouses receiving
unscheduled shipments without notice. Of the five procurement credit card
transactions for 444 items of DME totaling $329,790, we found DOH could not
provide proof of delivery for four transactions for 140 pieces of DME totaling
$312,644. Although DOH is required to enter receiving documents when
reconciling the charges in the Statewide Financial System, there were no system
checks because these were pre-payments. According to DOH, it does not have
documentation showing proof of delivery for these four purchase orders. As a result,
there was no assurance that the equipment ordered—and already paid for—was
received. For the remaining transaction for 304 pieces of DME totaling $17,146,
DOH provided proof of delivery.

The steps taken by the State to expedite the procurement process at the onset
of COVID-19, although well intended, resulted in breakdowns of the control
environment for communication and the recording and documenting of transactions,
limiting OHEP’s ability to account for DME. Stronger controls could have aided in the
overall management of DME by maintaining a perpetual quantity of items purchased,
their cost, anticipated arrival, and the logistics to serve those in need.

Without minimal controls, purchases and receiving were not appropriately
documented, and assurances do not exist that the goods ordered and paid for were
actually received. While factors beyond OHEP’s control prevented it from confirming
receipt of all procured DME during the pandemic, moving forward, developing new
guidance for future State disaster emergencies could provide the direction needed
for staff to ensure transactions are recorded and communicated and purchases are
received.

Recommendations
To OGS:

1. Develop and issue statewide guidance for State agency procurements
during declared State emergency disasters in conjunction with the State
Procurement Council.
To DOH:

2. Maintain basic internal controls during emergency scenarios to ensure
stewardship over State assets that address concepts such as conducting

Report 2023-S-14 14
transactions in an ordinary manner, recording transactions, effective
communication, and documenting receipt of purchases.

Management of DME Inventory
The purpose of managing inventory is to ensure that there is enough stock to meet
demands by ensuring the right items are available in the right quantities at the
right time, without creating an overstock. This may include analyzing demands and
historical trends, tracking inventory levels, and placing orders to replenish inventory
to maintain an optimal level of stock while preventing shortages. Excess stock can
lead to excessive storage costs as well as items becoming obsolete or expiring or
needing repairs from not being used. Storing unused DME in warehouses is costing
the State annually, while the medical community has also expressed interest in this
equipment. Finding new solutions for distributing this stockpile would reduce State
spending on warehousing and assist the State’s medical community.

Unused Stockpile of DME
According to DOH officials, a Medical Stockpile Steering Committee (Steering
Committee) was created to recommend the quantity and type of DME to be retained
in the MERC’s emergency stockpile. From May 2021 through January 2022, the
Steering Committee identified 51,140 DME items to be retained, leaving a surplus
of 198,430 DME in State warehouses without a strategic plan for utilization.
Additionally, the Steering Committee recommended that a subset of 4,468 DME
items continue to receive preventive maintenance. According to DOH officials, the
Steering Committee’s recommendations were subsequently forwarded to subject
matter experts from DHSES and the former Executive Chamber for review and
acceptance. On multiple occasions, we requested documentation of the Steering
Committee’s decisions and decision-making process on the quantity and type
of DME to retain and to receive preventive maintenance. DOH did not provide
the requested documentation. Without the requested documentation, we cannot
analyze the information or the processes used to understand how or why the
Steering Committee made the decision to keep over 51,000 items when the MERC
originally had 4,481 and only disbursed 324 items during the COVID-19 public health
emergency disaster.

When DME is forward deployed to a hospital or medical facility, DOH retains
ownership and may recall the equipment if necessary. Typically, DOH signs a
Letter of Agreement with the requester before forward deploying items. During the
COVID-19 public health emergency, DOH did not enter into Letters of Agreement, but
did record DME sent to requesters in MERITS as being forward deployed. According
to DOH officials, very few deployed items have been returned. Usually, they are kept
at the location to which they had been deployed or sent to another facility that needs
them.

Of the total DME available (according to MERITS), only 324 items were forward
deployed during the public health emergency. According to DOH records, of the 324
forward-deployed DME items, 321 came from the pre-COVID-19 DME stock and

Report 2023-S-14 15
three from the 247,394 DME acquired during COVID-19. This leaves a significant
amount of DME purchased during the pandemic still unused in boxes at warehouses
for which the State continues to incur contracted warehouse management costs.

Table 2 illustrates DOH’s DME stockpile before, during, and after COVID-19 (as of
June 2024).
Table 2 – DOH Durable Medical Equipment Stockpile
Pre-COVID-19 DME
DOH-owned DME 4,841
DME forward deployed pre-COVID-19 (1,046)
DME forward deployed during COVID-19 (321)
COVID-19 Acquired/Purchased DME
Purchases and donations 247,394
DME forward deployed during COVID-19 (3)
Total Owned and Forward-Deployed DME
Total DOH-owned DME 252,235
Total forward-deployed DME (1,370)
Total DME available for use 250,865*
*This table represents information from beginning inventory March 2020 and
January 2024 inventory provided by DOH and LifeScience Logistics
inventory provided March 2024.

In the years following the height of the COVID-19 pandemic, DOH began to seek
ways to reduce its inventory, but has not finalized a process or created written
procedures. As part of determining how to manage the surplus DME, DOH
conducted a survey in December 2021 to gauge health care facilities’ interest.
DOH surveyed 829 medical facilities and received 546 responses. The responses
indicated interest in 24,585 items of DME. DOH conducted a follow-up survey to
ensure that there was still interest. According to DOH officials, to receive the DME,
any facility that replied to the survey would have to sign a Letter of Agreement.
In August 2023 and February 2024, DOH sent Letters of Agreement and forward
deployed four corresponding items of DME to two facilities that responded to
the survey. DOH officials stated that they are in the process of finalizing how the
remaining DME will be forward deployed.

The ongoing DHSES contract with LifeScience Logistics to manage the DHSES
warehouses’ storing of PPE and DME runs from November 2020 to November
2025. A significant amount of DME purchased (247,391 items) during the pandemic
is still unused in boxes at MERC or DHSES warehouses, even though, according
to DOH officials, medical facilities in the State have expressed a need for it. By not
forward deploying the DME stockpile prudently, the State continues to incur related
contracted warehouse management costs.

State Finance Law Section 167 provides specific manners in which agency heads
may transfer or dispose of State property that has been deemed no longer useful.
Disposal may include using the property as a partial payment on a new item—such
as for a trade-in—or placing the property in OGS custody or control for reuse by
other State agencies. Where the fair market value of the property is less than an

Report 2023-S-14 16
amount established from time to time by OGS, the agency may dispose of such
property by such means as the agency head deems “to be in the best interest of
the State.” Also, where personal property has been purchased from special funds,
a State agency, upon designation of the source of funds from which such property
was purchased, may condition the disposal of such property. All proceeds realized
on the sale or other transfer not authorized to be deposited in a special fund shall be
deposited in the general fund of the State.

Overall, DOH has taken limited action to address the DME surplus of just under
200,000 items, stating State Finance Law Section 167 prevents surplus DME from
being given to facilities. DOH said it is considering a new forward deployment
program as an alternative. As of December 2024, 3 years after starting the process,
DOH has done little to reduce its inventory. DOH is in the process of final reviews
that would allow forward deployment of DME to facilities that expressed interest and
is still finalizing how the remaining DME will be forward deployed.

While DOH was unable to control the acquisition of DME early in the pandemic,
it does have the ability to reduce inventory moving forward, which could reduce
State spending on warehousing unused equipment and assist the State’s medical
community. As of December 17, 2024, DOH stated it continues to re-evaluate the
stockpile.

Tracking of Equipment
As of June 2024, DOH had 9,519 DME items stored in its warehouses, and as of
March 2024, DHSES warehouses held 240,051 DME items, for a total State DME
inventory of 249,570.

DOH initially provided us with DME inventory data as of October 2023 and updated
data in June 2024; however, the data provided did not include DOH-owned DME
stored in DHSES warehouses and maintained in TecSys, as DOH does not have
access to the vendor’s (LifeScience Logistics) inventory records or physical
inventory. DOH requested TecSys inventory data from DHSES and provided it to us
as of March 2024. From this, we judgmentally selected a sample of DME to test at
each warehouse.

We visited and toured each of the five warehouses. Across the five warehouses,
our sample included 4,728 DME items. During our visits, for each item sampled, we
verified that it existed and was in its proper location. For DME items in our sample
that were on the preventive maintenance cycle, we verified that the most recent
preventive maintenance had been properly recorded. For DME still in individual
manufacturer sealed boxes, we verified the items using the information on the
product’s packaging.

Overall, we found the warehouses to be generally organized, clean, and
well-maintained, with the majority of items in the locations reflected in each
database. For our sample of 4,728 DME items, we could not locate 12 pulse
oximeters that should have been at the Brentwood warehouse. DOH officials

Report 2023-S-14 17
said that it is possible that they were put into use at some point and
not recorded. Given the physical size and dollar value, we found
this explanation to be reasonable. Additionally, during our preventive
maintenance analysis and physical inventory testing, we found 1,008
infusion pumps listed as being located in the Amsterdam warehouse,
but 12 were not included in either MERITS or TecSys, the warehouse’s
inventory systems. The missing infusion pumps were initially
warehoused with DHSES and sent to QMG for servicing. According to
DOH officials, the infusion pumps that received preventive maintenance
were directly returned to DHSES with the exception of a few that needed
repairs; these were replaced to avoid repair costs and returned to the
MERC. According to DOH, DHSES picked up these infusion pumps
to return to the DHSES warehouse. According to DHSES warehouse
officials, after being serviced, these infusion pumps were not returned
to DHSES’ warehouse. Based on purchase orders, the 12 pumps were
valued at $23,940. Since sharing our findings with DOH, officials stated Pallets of infusion pumps in their
boxes at the Geneva DHSES
they have found all but two of the pumps, but did not share supporting
warehouse
documentation with us. This further illustrates the need for DOH to have
access to the inventory data.

Recommendations to DOH
3. Develop and implement a statewide public health strategic plan to utilize
surplus DME.
4. Document and preserve the process and/or key factors used when making
significant decisions, and keep documentation of key events, such as the
Steering Committee’s recommendation of DME to be retained and to receive
preventive maintenance.
5. Obtain and maintain access to DOH’s inventory and inventory records at
non-DOH warehouses as part of asset management.

DME Not Receiving Preventive Maintenance
According to OHEP, certain DME needs preventive maintenance—which includes
activities such as replacing batteries or power boards or cleaning internal
components—to comply with the manufacturer’s specification, maintain the
manufacturer’s warranty and the equipment’s readiness for use and forward
deployment, reduce the need for larger repairs, and extend the equipment’s useful
life.

DOH officials stated that any equipment that has not received preventive
maintenance would not be forward deployed, except as a last resort, and that there
are standards for equipment being tested and inspected after being transported. Per
The Joint Commission—an independent, non-profit organization and, founded in
1951, the nation’s oldest and largest standards-setting and accrediting body in health
care—any equipment that has been transported between locations should be tested

Report 2023-S-14 18
to ensure its electrical safety and that proper operation has not been compromised
during transit. Similarly, the Centers for Medicare & Medicaid Services states that all
equipment must be inspected and tested for performance and safety before initial
use and after major repairs or upgrades.

As previously stated, the Steering Committee recommended 51,140 DME items be
kept in the cache, of which 4,468 items (9%) should receive scheduled preventive
maintenance. DOH stated that, going forward, providing preventive maintenance for
only the specified items would reduce the annual maintenance costs and the need
for related coordination and logistical efforts. However, as there are no immediate
plans to forward deploy the stockpile, this leaves a significant amount of the DME in
the MERC (91%) without preventive maintenance, which could potentially invalidate
the manufacturer’s warranty or reduce its immediate usability in an emergency.

On multiple occasions, we requested documentation regarding how the Steering
Committee determined the amount of DME to be retained and the quantity to receive
preventive maintenance. DOH did not provide us with the requested documentation
or a reason that it could not do so. DOH’s response to us—a list of DOH units that
participated in the process and a meeting agenda without meeting minutes—did not
address our request. DOH did state that the May 2023 request for proposals (RFP)
for preventive maintenance represents the DME to be retained and maintained on
the preventive maintenance cycle. However, without additional information, we could
not analyze the Steering Committee’s decisions and conclusions regarding specific
DME and quantities of DME to be retained and maintained.

Early in the pandemic, DOH contracted with QMG to work in the
MERC warehouses to perform initial inspections of the DME as well as
preventive maintenance and repairs on certain equipment. The QMG
contract ended in December 2023, and DOH did not issue an RFP for a
replacement contract until May 2023, with a deadline for proposals due in
June 2023 and an anticipated contract start date of January 2024. DOH
officials stated a normal contract process takes, on average, 12 months
to complete; therefore, DOH may not have allowed enough time for the
contract to be processed prior to the expiration of the prior contract.
Additionally, DOH submitted documentation to the Division of the Budget
in August 2023 and it was not approved.

As of December 2024, a contract had not been awarded. DOH is still Oxygen concentrator at the
reassessing the amount of DME and plans to issue a new RFP in the Brentwood MERC warehouse
future. As a result, a preventive maintenance contract has not been in
place for at least 12 months since the expiration of the QMG contract. A large portion
of the DME is on a similar 2-year preventive maintenance schedule and is due for
preventive maintenance in the same quarter, which, compounded by the expiration
of the prior contract, has significantly added to number of items behind on preventive
maintenance.

Report 2023-S-14 19
Given that some equipment warranties are contingent on preventive maintenance,
we requested—on multiple occasions—a list of DME items with invalid warranties
as the result of not receiving the required preventive maintenance. However, DOH
stated that it does not have this information because it did not make the DME
purchases.

According to DOH officials, OHEP is required to track due dates and schedule
and record completed preventive maintenance and new due dates in MERITS.
Based on MERITS data, we determined that at least 4,036 of the 4,468 DME
items recommended to receive preventive maintenance (90%) are past due as of
December 2024 (see Table 3).

Table 3 – DME With Past Due Preventive Maintenance
Date Range DOH Warehouse DHSES Warehouse Total Items
Items* Items**
Due before Oct. 2023 16 2 18
Due Oct.–Dec. 2023 19 – 19
Due Jan.–Mar. 2024 699 991 1,690
Due Apr.–June 2024 2,236 9 2,245
Due July 1–Sept. 30, 2024 32 – 32
Due Oct. 1–Dec. 31, 2024 32 – 32
Due in 2025 414 – 414
Forward deployed 12 – 12
No preventive maintenance – 6 6
due date listed
Totals 3,460 1,008 4,468
Past due as of December 2024 3,034 1,002 4,036
*Determined based on October 2023 DOH data
**Determined based on March 2024 DHSES data

With no preventive maintenance contract in place, DOH has 4,036 DME
items overdue for preventive maintenance, along with six DME items
that do not have a preventive maintenance due date listed.

Essentially, all equipment must be inspected, tested, and maintained
to ensure its safety, availability, and reliability. However, while this
minimizes the risk to patients using equipment, it does not mean
the equipment will be usable when forward deployed. If preventive
maintenance is not completed and the equipment is forward deployed
in an emergency, this increases the chance that facilities may not be
able to use the DME immediately on a patient in need as they may have
to order parts or make needed repairs before the DME is functional.
Furthermore, failing to meet preventive maintenance requirements as
specified by the manufacturers for potentially thousands of DME items
can invalidate their warranties and increase the chances that necessary
repairs or replacements will not be covered at the manufacturers’ X-ray machines in plastic wrap at
expense. the Amsterdam DHSES warehouse

Report 2023-S-14 20
Recommendations to DOH
6. Develop and implement a strategic plan for DME preventive maintenance so
that it is ready for use during public health emergencies.
7. Finalize analysis on DME to keep and preventively maintain, and issue an
RFP for any needed services.
8. As part of creating a transparent environment, maintain records and
supporting documentation for decision-making so that requests for public
information can be fulfilled.

Report 2023-S-14 21
Audit Scope, Objective, and Methodology
The objective of our audit was to determine what steps DOH and OGS have taken
during the procurement process for medical equipment for public health emergencies
to ensure usability of the equipment purchased and whether DOH and OGS have
managed and maintained—in functioning condition—the inventory of the State’s
medical stockpile. Our audit scope covered the period from January 2020 through
June 2024.

To accomplish our objective and assess related internal controls, we reviewed
relevant laws, policies, procedures, guidelines, executive orders, ongoing contracts,
and RFPs. We met with DOH, OGS, DHSES, and LifeScience Logistics employees.
We also reviewed inventory data and Statewide Financial System data such as
paid voucher data, purchase order information, and invoices; and we visited five
warehouses.

We used a non-statistical sampling approach to provide conclusions on our audit
objective and to test internal controls. We selected judgmental samples; because
we used a non-statistical sampling approach for our tests, we cannot project the
results to the respective populations, even for the samples. Our samples, which are
discussed in the detail in the body of the report, include:

Judgmental samples at each of the five warehouses (for a total of 4,728 of the
249,570 DME items at these warehouses) selected based on past-due dates
and an assortment of types of DME.
A judgmental sample of nine transactions—four purchase orders (1,270 pieces
of DME worth $61,973,800) and five procurement credit card transactions (444
items of DME with a value of $329,790)—for testing out of 80 procurement
transactions totaling $452 million.
We obtained data from both DOH’s MERITS and LifeScience Logistics’ TecSys
databases used to track DME inventory owned by DOH. Both datasets included
the product, its location, and serial number. Additionally, MERITS tracks the most
recent preventive maintenance date and when the next is due. We verified this
information was accurate by reviewing source documentation at the warehouses.
We also selected DME items while on site to trace back to the databases. Through
our testing, we determined that the data from both these systems were sufficiently
reliable for the purposes of this report.

Due to the lack of documentation throughout our audit, we had to rely on testimonial
evidence regarding what occurred during COVID-19 and we use the term “some,”
as the actual quantity was unknown or could not be documented. Therefore, we
reviewed the processes followed and the documentation available to understand
the procurement process during COVID-19 and identified opportunities to provide
guidance for improvement in advance of another statewide disaster emergency.

Report 2023-S-14 22
Statutory Requirements

Authority
The audit was performed pursuant to the State Comptroller’s authority as set forth in
Article V, Section 1 of the State Constitution and Article II and Section 8 of the State
Finance Law.

We conducted our performance audit in accordance with generally accepted
government auditing standards. Those standards require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objective. We believe that the
evidence obtained provides a reasonable basis for our findings and conclusions
based on our audit objective.

In addition to being the State Auditor, the Comptroller performs certain other
constitutionally and statutorily mandated duties as the chief fiscal officer of New
York State. These include operating the State’s accounting system; preparing the
State’s financial statements; and approving State contracts, refunds, and other
payments. These duties could be considered management functions for purposes
of evaluating organizational independence under generally accepted government
auditing standards. In our professional judgment, these duties do not affect our ability
to conduct this independent performance audit of DOH and OGS oversight and
administration of the State’s public health emergency medical stockpile.

Reporting Requirements
A draft copy of this report was provided to DOH and OGS officials for their review
and formal comment. We considered their comments in preparing this final report,
and they are attached in their entirety at the end of the report. DOH officials took
exception to certain statements in the report while OGS generally agreed with our
recommendation. Our responses to certain DOH and OGS remarks are embedded
within their responses as State Comptroller’s Comments.

Within 180 days after final release of this report, as required by Section 170 of the
Executive Law, the Commissioners of the Department of Health and the Office
of General Services shall report to the Governor, the State Comptroller, and the
leaders of the Legislature and fiscal committees, advising what steps were taken to
implement the recommendations contained herein, and where recommendations
were not implemented, the reasons why.

Report 2023-S-14 23
Agency Comments - DOH and State Comptroller’s Comments

March 10, 2025

Nadine Morrell
Audit Director
Office of the State Comptroller
Division of State Government Accountability
110 State Street – 11th Floor
Albany, New York 12236-0001

Dear Nadine Morrell:

Enclosed are the Department of Health’s comments on the Office of the State
Comptroller’s Draft Audit Report 2023-S-14 entitled, “State Public Health Emergency Medical
Stockpile.”

Thank you for the opportunity to comment.

Sincerely,

Johanne E. Morne, M.S.
Executive Deputy Commissioner

Enclosure

cc: Melissa Fiore
Michael Atwood

Empire State Plaza, Corning Tower, Albany, NY 12237│health.ny.gov

Report 2023-S-14 24
Department of Health
Comments on the
Office of the State Comptroller’s
Draft Audit Report 2023-S-14 entitled,
“State Public Health Emergency Medical Stockpile”
The following are the Department of Health’s (DOH) comments in response to the Office of the
State Comptroller’s (OSC) Draft Audit Report 2023-S-14 entitled, “State Public Health
Emergency Medical Stockpile.”

Audit Recommendation Responses

Recommendation #2

DOH Response #2

DOH maintains appropriate internal controls and processes to maintain appropriate stewardship
over State assets. As noted in the report, DOH was not involved in decisions to order supplies
and DME during the onset of the COVID-19 pandemic.
State Comptroller’s Comment – Throughout the report, we note that DOH was not involved in
decisions regarding the ordering of supplies and DME and was often unaware of what had been
purchased. However, DOH was responsible for other internal control processes such as credit card
transactions, paying vouchers, and receiving equipment—over which it did not maintain appropriate
controls. When we asked DOH officials how they accounted for these transactions and receipt of
DME purchases, officials stated they cannot trace a voucher to a specific item of equipment or the
inverse.
Recommendation #3

Develop and implement a statewide public health strategic plan to utilize surplus DME.

DOH Response #3

DOH has confidence in its utilization of surplus DME. DOH conducts surveys of healthcare
facilities to assess need and interest level specific DME and, upon issuing a Letter of Agreement,
forward deploys based on the results. All other surplus DME will follow OGS rules and regulations
for surplus of equipment.
State Comptroller’s Comment – DOH has only deployed another four pieces of surplus DME in
the years following the height of the COVID pandemic, in August 2023 and February 2024,
utilizing Letters of Agreements. There are still 198,430 items of surplus DME in State warehouses.
In addition, as noted on page 16 of the report, DOH officials stated that they are in the process of
finalizing how the remaining DME will be forward deployed.

Report 2023-S-14 25
Recommendation #4

Document and preserve the process and/or key factors used when making significant decisions,
and keep documentation of key events, such as the Steering Committee’s recommendation of
DME to be retained and to receive preventive maintenance.

DOH Response #4

Steering Committee decisions were documented and forwarded to subject matter experts from
other state agencies for review. The former Executive Chamber provided final approval for the
preventative maintenance recommendation. DOH provided OSC with a sample Steering
Committee agenda and the methodology that the Steering Committee used, including factors it
considered. Additionally, workgroup meetings are now documented with more in-depth notes.
State Comptroller’s Comment – DOH itself did not document or preserve the process and key
factors used when making significant decisions. DOH did not provide us with the requested
documentation or a reason that it could not do so. DOH’s response to us—a list of DOH units that
participated in the process and a meeting agenda without meeting minutes—does not provide
evidence that a meeting was held or how participants may have made decisions.

Recommendation #5

Obtain and maintain access to DOH’s inventory and inventory records at non-DOH warehouses
as part of asset management.

DOH Response #5

Access to non-DOH warehouses is at the discretion of the owner of the warehouse.
State Comptroller’s Comment – As part of asset management, DOH should have access to
records of inventory owned by DOH. DME equipment is consolidated into two DOH and three
DHSES warehouses, yet DOH does not have direct access to the inventory or the inventory
tracking system used in DHSES warehouses for DOH-owned DME equipment. DOH also doesn’t
receive any periodic inventory reports. During the audit, DOH could not provide us with an inventory
listing of DME in the DHSES warehouses and had to obtain this information from DHSES.
Recommendation #6

Develop and implement a strategic plan for DME preventive maintenance so that it is ready for
use during public health emergencies.

DOH Response #6

DOH conducts preventive maintenance programs pursuant to manufacturers’ recommendations.

State Comptroller’s Comment – As noted on page 19 of our report, as of December 2024, there
was no preventive maintenance contract in place for DME and one had not been in place for at least
12 months. In fact, 90% of the DME with scheduled preventive maintenance was past due. DOH
also noted it was still reassessing the amount of DME and planned to issue an RFP in the future.

Report 2023-S-14 26
If preventive maintenance is not completed and the equipment is forward deployed in an
emergency, this increases the chance that a facility may not be able to use the DME immediately
on a patient in need, as the facility may have to order parts or make needed repairs before the
DME is functional. Failing to meet preventive maintenance requirements as specified by the
manufacturers for potentially thousands of DME items can invalidate their warranties and increase
the chances that necessary repairs or replacements will not be covered at the manufacturer’s
expense.
Recommendation #7

Finalize analysis on DME to keep and preventively maintain and issue an RFP for any needed
services.

DOH Response #7

DOH utilizes a medical warehouse workgroup, which meets every two weeks. Once the
workgroup compiles an approved list of necessary DME preventative maintenance, an RFP will
be issued for all necessary services.
State Comptroller’s Comment – As noted on page 19 of our report, as of December 2024, there
was no preventive maintenance contract in place for DME and one had not been in place for at
least 12 months. DOH should ensure this is done as soon as possible.

Recommendation #8

As part of creating a transparent environment, maintain records and supporting documentation
for decision-making so that requests for public information can be fulfilled.

DOH Response #8

DOH maintains such records which are available to fulfill requests for public information.
State Comptroller’s Comment – Throughout our audit, there were multiple times when DOH
could not provide records or supporting documentation related to decisions that it or the former
Executive made but that affected DOH responsibilities. Examples include documentation of
recommended DME for purchase, proof of delivery for 140 pieces of DME totaling $312,644, and
documentation of the Steering Committee’s decision on the quantity and type of DME to retain.

Report 2023-S-14 27
Agency Comments - OGS and State Comptroller’s Comment

KATHY HOCHUL JEANETTE M. MOY
Governor Commissioner

February 25, 2025

Nadine Morrell, Audit Director
NYS Office of the State Comptroller
Division of State Government Accountability
110 State Street, 11th Floor
Albany, NY 12236

Re: Draft Audit Report- 2023-S-14, Emergency Medical Stockpile

Dear Nadine Morrell,

Thank you for the opportunity to respond to the Office of the State Comptroller’s (“OSC”)
draft audit report referenced above (the “Report”). On behalf of the Office of General Services
(“OGS”) and pursuant to Executive Law § 170, I am submitting our response to the following
recommendation.

OGS generally agrees with the recommendation outlined in the report. We would also
like to highlight how the recommendation is currently being implemented through The New York
State Procurement Guidelines and The New York State Guide to Financial Operations.

OGS Response:
Recommendation from the report:

1. Develop and issue statewide guidance for State agency procurements during
declared State emergency disasters in conjunction with the State Procurement Council.

New York State Procurement Guidelines
The New York State Procurement Guidelines are established by the State Procurement Council
pursuant to State Finance Law § 161(2)(d). The Council consists of 21 members, plus two non-
voting observers. Ex officio members include the Commissioner of General Services (Chair), the
State Comptroller, the Director of the Budget, the Chief Diversity Officer, and the Commissioner
of Economic Development or their respective designees.

Emergency Procurement: An emergency procurement is one in which an urgent and
unexpected situation occurs where health and public safety or the conservation of public
resources is at risk. Where an emergency exists, an Agency may issue procurement
contracts without complying with formal competitive bidding requirements. However, an
Agency should make a reasonable attempt to obtain at least three oral quotes. An
Agency’s failure to properly plan in advance – which then results in a situation where
normal practices cannot be followed – does not constitute an emergency. OSC approval
must be obtained for an emergency procurement if the value is over the Agency’s
contract approval threshold as set forth in State Finance Law § 112. In addition, if the

Mayor Erastus Corning 2nd Tower, Governor Nelson A. Rockefeller Empire State Plaza, Albany, New York 12242 │www.ogs.ny.gov

Report 2023-S-14 28
Nadine Morrell
Page 2
November 9, 2023

Agency is seeking a waiver from advertising in the New York State Contract Reporter,
OSC must approve the exemption. State Agencies shall minimize the use of emergency
procurements and shall use emergency procurements only when a formal competitive
process is not feasible. State Agencies shall document in the procurement record
the circumstances and the material and substantial reasons why a formal
competitive process is not feasible.

Reference: New York State Procurement Guidelines (Revised September 2023)

State Comptroller’s Comment – Our report acknowledges that OGS issued Procurement
Guidelines that include emergency procurement. However, the emergency guidelines do not
include an agency’s responsibilities during a declared State disaster emergency—particularly
when the duration of the disaster extends beyond a one-time emergency situation. Additional
written guidance could provide the direction needed for agency staff to ensure transactions are
recorded and communicated, including when purchases are received.

New York State Guide to Financial Operations
The New York State Guide to Financial Operations serves as a reference for statewide
accounting policies, procedures and the OSC related mandates for use by State agencies. This
guide is established and maintained by the New York State Comptroller’s Office.

Receiving: The purpose of this section is to provide guidance to ensure that agencies
receive the goods and services they ordered in the proper condition and in accordance
with the terms and conditions of the purchase agreement. The agency must complete
the receiving processes timely to establish what was received, the quantity or
amount received, the date of receipt, and who received the goods or services.
Agencies should use the receiving module in SFS to store documentation supporting
receipt of goods or services. Prior to certifying a claim for payment for goods and
services, agency staff must confirm the agency received the quantity and quality of
goods or services from the vendor based on the agency’s expectations,

Reference: NYS Guide to Financial Operations, Receiving

We appreciate the opportunity to review and provide comments on the Report. Please feel free
to contact me if you have any questions or require further clarification.

Sincerely,

David Sears
Director of Internal Audit

Report 2023-S-14 29
Contributors to Report

Executive Team
Andrea C. Miller - Executive Deputy Comptroller
Tina Kim - Deputy Comptroller
Stephen C. Lynch - Assistant Comptroller

Audit Team
Nadine Morrell, CISA, CISM - Audit Director
Bob Mainello, CPA - Audit Manager
Theresa M. Nellis-Matson, CPA - Audit Supervisor
Adriane Inman - Examiner-in-Charge
Ryan Chauvin - Senior Examiner
Dustin Moore - Senior Examiner
Andrea Majot - Senior Editor

Contact Information
(518) 474-3271
StateGovernmentAccountability@osc.ny.gov
Office of the New York State Comptroller
Division of State Government Accountability
110 State Street, 11th Floor
Albany, NY 12236

For more audits or information, please visit: www.osc.state.ny.us/state-agencies/audits

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