ALBANY — A central New York agency caring for the mentally disabled funneled more than $1 million of work to favored vendors, including family and friends of staff members, according to a state audit released Tuesday.

New York State Comptroller Thomas DiNapoli said he has turned over the findings on the Central New York Developmental Disabilities Services Office to the Oneida County District Attorney’s office for further investigation.

The audit revealed that agency staff rigged work bids and cut backdoor deals with vendors going back as far as 2003.

DiNapoli said in some cases the state paid at least 40 percent more for work done at group homes than it should have.

“This is at minimum a flagrant disregard for the law,” DiNapoli said in a news release. “These employees are supposed to protect taxpayers, not make up phony bids as part of some bid rigging scheme to funnel a million taxpayer dollars to favored vendors. And they were so blatant they didn’t even try to cover their tracks.”

Auditors made a dozen recommendations to improve the agency.

The Office of Mental Retardation and Developmental Disabilities, which oversees the Central NY DDSO, has taken steps to address the issues and tighten internal controls, DiNapoli said.

It has also ceased doing business with all but two of the vendors.

During prior audits in 2007, the Comptroller’s Office found other questionable practices by DDSO, including the agency hiring dozens of relatives of employees to provide repair and respite care services totaling about $253,000 and problems with overtime hours worked by staff.

As a result, it launched the most recent audit in January 2008. The disabilities services office oversees 197 community-based group homes, 306 family care homes and 23 other program sites that provide care for about 4,000 individuals in Cayuga, Cortland, Herkimer, Lewis, Madison, Oneida, Onondaga and Oswego counties.

It has its administrative offices in Rome and Syracuse.