Comptroller John Liu says the city shortchanged many senior citizens by doling out millions in housing subsidies to dead people over recent years.
A new audit shows that New York City paid out nearly $12 million in rent subsidies in recent years to 4,000 deceased residents.
City officials say they've already recouped $3.3 million and plan to collect the rest.
The audit by Comptroller John Liu covered the period from July 2009 to November 2010.
Liu has turned over his findings to the Manhattan district attorney's office to determine if any crimes were committed, reports the Daily News.
"There's no excuse for losing this much money -- management lapse, willful fraud or otherwise," Liu said in a statement.
He claimed the city shortchanged many senior citizens by doling out the millions in housing subsidies to dead people over the years.
The city says it discovered the errors even before the comptroller uncovered them and began employing strategies to minimize such oversights.
The problem emerged from a popular program called the Senior Citizen Rent Increase Exemption Program.
It assists low-income elderly tenants with their rents.
Landlords or family members are required to notify the city within 30 days if participants move or die.
Liu's probe found that some relatives and landlords continued to claim the subsidies although the intended beneficiary had been dead for a decade or longer.
A Finance Department spokesman acknowledged that the city could do more than take the word of relatives and landlords in giving out subsidies.