NORWICH – The City of Norwich has been flagged by the New York State Comptroller's Office which released two audit reports Wednesday, one condemning the city's handling of emergency medical services (EMS) billing; and the other chastising city officials for not having a plan to meet an estimated $1.8 million in future capital needs.

According to the audit report on the city's EMS billing, the city has missed out on an estimated $200,000 in revenues. The EMS department did not bill for 614 incidents between Jan. 1, 2017, and Oct. 31, 2018, resulting in $417,600 of unbilled medical services. Moreover, the comptroller found nine incidents totaling $8,300 that were inaccurately billed.

The report also found 903 unserviceable incidents resulting in roughly $400,000 in unrecoverable costs, and that no one reconciles the billings to the medical services provided.

The comptroller gave recommendations that all EMS services provided are billed appropriately in accordance to an up-to-date rate schedule, and that department heads routinely reconcile billings to medical service providers. The city should also consider billing for unserviceable incidents, the report says.

However, city officials argue that the comptroller's audit amounts are “overstated” (although the city council did approve updated ambulance recovery rates earlier this week).

Norwich Mayor Christine Carnrike credits much of the EMS shortfalls to the amount of calls billed to Medicaid. About 80 percent of the population served by Norwich EMS is Medicare or Medicaid patients. Since fees covered by Medicare and Medicaid don't typically cover the whole cost of an EMS call, the city often takes a loss.

What's more, the city usually doesn't charge patients who don't need medical treatment. This includes elderly patients who need help up after a fall; patients who accidentally triggered a medical alarm; those who refuse treatment after someone called an ambulance on their behalf; and calls that are canceled en route.

Nor does the city charge for DOAs (dead on arrival). City officials point to 20 DOA incidents during the audit period. At $900 each, that totals $18,000 not billed.

“It is the position of this administration that those calls where there are no medical services provided due to Death on Arrival are not billed to the decedent's family/estate,” Carnrike wrote in response to the comptroller's report. “Also, the City of Norwich does not plan to bill for 'accidental' emergency alert calls (i.e. Lifeline, etc.).”

Carnrike also said that the city's taken steps to reconcile billing by using software upgrades purchased in April.

“The City of Norwich believes the OSC audit amounts are overstated,” said Carnrike. “However, practices have been implemented to remedy data entry errors by EMS personnel to accurately reflect services provided or services not provided.”

In addition to auditing the city's EMS services, the NYS Comptroller also looked at the city's capital planning. According to that report, Norwich officials “did not develop a capital plan or accurate and complete inventories of vehicles and equipment.” The state looked at city data from Jan. 1, 2017, to Dec. 31, 2018 (although the Comptroller's Office extended its scope back to Jan. 1, 2012, to analyze financial trends).

The report found that the city has approximately $1.8 million in capital needs that will “impact its financial condition.”

The Comptroller's Office laid out recommendations that the city council work with department heads to develop a multiyear capital plan to ensure financial resources are available to replace capital assets. Additionally, it says department heads should create inventory lists of capital assets and maintenance and replacement schedules.

In response, Mayor Carnrike said the city's taken corrective actions; however, she pointed out that financial trouble began before her administration.

“In September 2015, the [State Comptroller] had designated the City of Norwich 'susceptible to fiscal stress,' said Carnrike. “This designation was received due to the prior administration's fiscal habits with yearly expenses exceeding revenues at alarming rates resulting in a low fund equity in the general fund.”

“By the second quarter of 2017, the City of Norwich had no designation by OSC due in large part to a new administration with fiscal habits of curtailing expenses, 'needs not wants,' implemented,” she added.

Carnrike's response details the city's intention to have a capital plan; however, she said “we needed capital in order to have a legitimate plan.” What's more, she argues that the comptroller's use of NYS DOT life expectancy for heavy equipment doesn't reflect the actual life expectancy of equipment used by the city.

In its own inventory checklist, the city's identified approximately $1.3 million in estimated costs, as opposed to the $1.8 million outlined in the State Comptroller's report.

“The city's position of $1.3 million in the fund balance following the capital needs expenditures identified by OSC may not be considered an optimum level; however, it is considered a reasonable amount and clearly demonstrates a dramatic improvement in the city's overall financial sustainability under this administration,” said Carnrike.

In recent years, Carnrike said the city has prepared budgets allocating 10 percent of of the city's $8 million budget to the general fund balance account, averaging approximately $800,000 each year.

In response, the Comptroller's Office says the city has prepared to replace equipment for 2020; but the comptroller's report estimates include replacement needs over the next five years.

The comptroller's report also acknowledges that its scale of “useful life” for equipment isn't always an accurate indication of how long equipment will last; yet the city hasn't developed its own criteria to determine useful life, “which is why it is important to have a capital plan.”