Plaintiff alleges her former employer subjected her to acts of racial discrimination, gender discrimination, a hostile work environment, constructive discharge and retaliation

In considering this appeal the Appellate Division addressed a "series of incidents" which Plaintiff contended made her working conditions intolerable. 

These incidents included:

1. Plaintiff not being selected for a full-time business instructor position despite her alleged "superior qualifications"; 

2. Alleged sexual harassment by employees during a school semester; 

3. Claims that Plaintiff was "wrongfully accused of theft and sabotaging a co-worker's desk";

4. Plaintiff's claim of an incident during which Plaintiff was allegedly denied entry into a facility of the Employer;

5. A reduction in Plaintiff's teaching course load from nine credits to zero credits and her assignment to a tutoring center; 

6. Plaintiff's alleged "constructive discharge" from her position; and 

7. An allegation that the Employer provided false information to the New York State Department of Labor resulting in the initial denial of Plaintiff's application for unemployment benefits.

In consideration of the many and the variety of alleged acts of unlawful discrimination advanced by Plaintiff in the instant appeal and Appellate Division's extensive analysis of the many issues it considered in arriving at its rulings, the full text of decision of the Appellate Division is set out below for the convenience of the reader.

Precious Cain, Respondent,

v

North Country Community College et al., Appellants.

Decided and Entered: May 28, 2026

Appellate Division, Third Department

CV-24-1849

Calendar Date: March 26, 2026

Before: Aarons, J.P., Pritzker, Reynolds Fitzgerald, Fisher And Mcshan, JJ.

Sugarman Law Firm, LLP, Syracuse (Adam P. Carey of counsel), for North Country Community College and another, appellants.

Letitia James, Attorney General, Albany (Owen Demuth of counsel), for New York State Department of Corrections and Community Supervision and another, appellants.

Finn Law Offices, Albany (Ryan M. Finn of counsel), for respondent.

Aarons, J.P.

Appeals (1) from an order of the Supreme Court (Peter Lynch, J.), entered October 17, 2024 in Albany County, which denied a motion by defendants Department of Corrections and Community Supervision and Victoria Barber to dismiss the complaint, and (2) from an order of said court, entered October 23, 2024 in Albany County, which denied defendants' motions for summary judgment dismissing the complaint and cross-claims.

Plaintiff, an African-American woman, began working for defendant North Country Community College (hereinafter NCCC) in August 2018 as an adjunct instructor, teaching one business course for the fall 2018 semester. As part of her employment, plaintiff also served as an instructor for the federally funded Second Chance Pell Program providing college-level courses to incarcerated individuals. For the spring 2019 semester, plaintiff taught two courses at NCCC and two courses at Franklin Correctional Facility (hereinafter Franklin CF). Plaintiff resigned from the Second Chance Pell Program and NCCC in July 2019 and January 2020, respectively, following a "series of incidents" which, she claimed, made her working conditions intolerable. These incidents included plaintiff's non-selection for a full-time business instructor position despite her "superior qualifications"; alleged sexual harassment by correction officers during the spring 2019 semester; a June 2019 email inquiry from defendant Victoria Barber, the deputy superintendent of Franklin CF, in which plaintiff claims she was "wrongfully accused of theft and sabotaging a co-worker's desk" after a classroom was found in "disarray"; an incident in July 2019 during which Barber denied plaintiff's entry into Franklin CF based upon plaintiff's hand tremor; a reduction in her NCCC course load from nine credits to zero and her assignment to a tutoring center; and NCCC's alleged provision of false information to the state Department of Labor, resulting in the denial of unemployment benefits during the summer of 2019.FN1

In February 2022, plaintiff commenced this action against NCCC and defendant Tara Evans,FN2 the human resources director at NCCC (hereinafter collectively referred to as the college defendants), as well as defendant Department of Corrections and Community Supervision (hereinafter DOCCS) and Barber (hereinafter collectively referred to as the state defendants), asserting causes of action for racial discrimination, gender discrimination, hostile work environment, constructive discharge and retaliation under the Human Rights Law and requesting punitive damages, among other things.FN3 The state defendants moved to dismiss the complaint, which motion Supreme Court denied. Following discovery, the state defendants and the college defendants moved, separately, for summary judgment dismissing the complaint in its entirety. Supreme Court denied the motions, concluding that "the record depicts a series of escalating events" that, taken together, could lead a reasonable jury to conclude that defendants violated the Human Rights Law. Defendants appeal.

As a threshold matter, we agree with the state defendants that Supreme Court erred in applying the present version of Executive Law § 296-d to plaintiff's claims. Though the present version expands employer liability from sexual harassment of non-employees to any "unlawful discrimination against non-employees in its workplace" (L 2019, ch 160, § 4), that expansion is applicable only to claims that accrued on or after October 11, 2019 — several months after the incidents giving rise to this action occurred (see L 2019, ch 161, § 4 [d]).

That said, Supreme Court properly denied the state defendants' motion to dismiss the complaint against them on the assertion that they were not plaintiff's employer (see CPLR 3211 [a] [7]). When determining who is an employer under the Human Rights Law, the key inquiry is "the alleged employer's power to order and control the employee in his or her performance of work" (Griffin v Sirva, Inc., 29 NY3d 174, 186 [2017] [internal quotation marks and citation omitted]). In her complaint, plaintiff asserted that she worked in DOCCS facilities, that her entry and movement in such facilities was controlled by DOCCS and that DOCCS reduced her course load in retaliation for her complaints about discrimination. Liberally construed and accepted as true, and according plaintiff the benefit of every favorable inference, the complaint sufficiently alleged facts from which to conclude that DOCCS and NCCC, together,FN4 were plaintiff's employer under the Human Rights Law, rendering dismissal of her claims inappropriate (see Cagino v Levine, 199 AD3d 1103, 1104 [3d Dept 2021] [internal quotation marks and citation omitted]; Carr v Wegmans Food Mkts., Inc., 182 AD3d 667, 669 [3d Dept 2020]; Zheng v Liberty Apparel Co. Inc., 355 F3d 61, 72 [2d Cir 2003]).

Turning to the summary judgment motions, and viewing the evidence in the light most favorable to plaintiff as nonmovant, the state defendants failed to establish entitlement to judgment as a matter of law dismissing the complaint on the ground that DOCCS was not plaintiff's employer (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Though there is no evidence that the state defendants had authority over plaintiff's hiring, compensation and other indicia of an employer-employee relationship, the evidence showed that the state defendants exercised a significant degree of control and supervision over her work. In particular, the record shows that correction officers monitored plaintiff's classroom, that the state defendants controlled her access to Franklin CF and on one occasion Barber collected the assignment plaintiff was to distribute and barred her from teaching that day. Accordingly, summary dismissal of the complaint against the state defendants on this ground was unwarranted (see generally Griffin v Sirva, Inc., 29 NY3d at 186).

We turn now to the substance of plaintiff's claims, starting with discrimination. To establish a claim for race or gender discrimination, "plaintiff must show that (1) she is a member of a protected class; (2) she was qualified to hold the position; (3) she was terminated from employment or suffered another adverse employment action; and (4) the discharge or other adverse action occurred under circumstances giving rise to an inference of discrimination" (Forrest v Jewish Guild for the Blind, 3 NY3d 295, 305 [2004]). "To prevail on [their] summary judgment motion[s], defendant[s] must demonstrate either plaintiff's failure to establish every element of intentional discrimination, or, having offered legitimate, nondiscriminatory reasons for [their] challenged actions, the absence of a material issue of fact as to whether [their] explanations were pretextual" (White-Barnes v New York State Dept. of Corr. & Community Supervision, 214 AD3d 1230, 1231 [3d Dept 2023] [internal quotation marks and citations omitted]; see Kelderhouse v St. Cabrini Home, 259 AD2d 938, 939 [3d Dept 1999]).

None of the incidents of alleged discrimination survive defendants' motions. Initially, there is no dispute that plaintiff is a member of protected classes and that she was qualified to be an adjunct instructor. As for plaintiff's claim of gender and/or racial discrimination in the selection of a full-time business instructor, there is also no dispute that plaintiff met the minimum qualifications for that role when she submitted her application in January 2019, that plaintiff did not receive an interview and that the two open positions eventually went to two white males. Even assuming an inference of discrimination attaches to the college defendants' failure to hire her for one of those positions, Kim Irland, a member of NCCC's search committee, explained in an affidavit that, while plaintiff had the minimal qualifications, the two successful candidates had considerably more teaching experience — a desired quality listed in the job description for the full-time business instructor position. Thus, the college defendants supplied legitimate, nondiscriminatory reasons for passing over plaintiff. Plaintiff did not dispute that the successful candidates had more teaching experience, and she failed to raise a material issue of fact through her testimony that the successful candidates' materials had typing errors, included "opinion" pieces under publications or listed retail jobs under work experience (see Wozniak v Components Assembly Div., 220 AD2d 934, 935 [3d Dept 1995]).

To the extent plaintiff's intentional discrimination claim is based upon Barber's email regarding a classroom left in disarray, the email itself does not constitute an adverse employment action, which "requires a materially adverse change in the terms and conditions of employment" including "termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss of benefits [or] significantly diminished material responsibilities" (Forrest v Jewish Guild for the Blind, 3 NY3dat 306 [internal quotation marks and citations omitted]; see Golston-Green v City of New York, 184 AD3d 24, 37 [2d Dept 2020]). As to the incident in which Barber refused plaintiff entry to Franklin CF, Barber denied plaintiff's allegation that she yelled at plaintiff, or accused her of alcohol use and reported said alcohol use to others as alleged by plaintiff. Instead, Barber affirmed that plaintiff was denied entry into the prison because plaintiff admitted she had not taken her medication, was nonverbal and was "visibly shaking," which Barber believed to be a safety and security issue, thereby providing a legitimate, nondiscriminatory reason for her actions (see White-Barnes v New York State Dept. of Corr. & Community Supervision, 214 AD3d at 1231). In opposition, plaintiff was required to submit proof raising an issue of fact as to whether "the stated reasons were false and that discrimination was the real reason" (Baldwin v Cablevision Sys. Corp., 65 AD3d 961, 965 [1st Dept 2009] [internal quotation marks and citation omitted], lv denied 14 NY3d 701 [2010]). Plaintiff failed to do so, as she confirmed that she had neglected to take medication for a hand tremor she had recently developed, and her testimony that Barber's alleged accusations of alcohol intoxication were motivated by plaintiff's race, gender or both were conclusory and thus insufficient to meet her shifted burden (see Forrest v Jewish Guild for the Blind, 3 NY3d at 308 n 6; Wozniak v Components Assembly Div., 220 AD2d at 935).

Next, defendants seek summary judgment dismissing plaintiff's claims of a sexually hostile work environment and a race-based hostile work environment. To establish such claims, a plaintiff "must offer proof of a workplace permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the plaintiff's employment and create an abusive working environment" (Mikesh v County of Ulster, 237 AD3d 1285, 1288-1289 [3d Dept 2025] [internal quotation marks and citations omitted]). Under the existing law at the time of accrual, "[t]he acts alleged to be discriminatory must be more than episodic; they must be sufficiently continuous and concerted in order to be deemed pervasive" (White-Barnes v New York State Dept. of Corr. & Community Supervision, 214 AD3d at 1231-1232 [internal quotation marks and citations omitted]; accord Mikesh v County of Ulster, 237 AD3d at 1289).

As to a hostile work environment due to sexual harassment, defendants met their initial summary judgment burden demonstrating that the conduct was not severe or pervasive. Plaintiff testified to "egregious" incidents by three different correction officers over a six-month period. According to plaintiff, one unnamed correction officer at Franklin CF would "take . . . every opportunity he had to be alone" with her and "tell [her] how hot [she] was." He told plaintiff that she "had to be careful around" the incarcerated individuals because "they were nasty guys," but that she "didn't have to worry because he would just . . . whip his c**k out at them." Another correction officer "would always insist on" escorting plaintiff to and from the classroom, and would "joke" that plaintiff was "really hot and you never know what might happen to . . . somebody sexy walking by themselves . . . at nighttime." A third unnamed correction officer informed plaintiff after class that the incarcerated individuals were looking at her backside while she had her back turned writing on the board, and the officer demonstrated plaintiff's movements to illustrate what the individuals saw. Although this alleged conduct was unquestionably inappropriate, these alleged incidents were insufficient as a matter of law to create an actionable sexually hostile or abusive work environment (see Vitale v Rosina Food Prods., 283 AD2d 141, 148 [4th Dept 2001]; compare Minckler v United Parcel Serv., Inc., 132 AD3d 1186, 1188-1189 [3d Dept 2015]).

Plaintiff's further testimony that DOCCS staff "routinely made sexually inappropriate comments" and that unspecified comments about her appearance began "[a]lmost as soon as she started working in the prison[s]" does not alter the analysis. In this connection, "the workplace must be both subjectively and objectively hostile. That is, a plaintiff must not only perceive that the conditions of his or her employment were altered because of discriminatory conduct, but the conduct also must have created an environment that a reasonable person would find to be hostile or abusive" (Pawson v Ross, 137 AD3d 1536, 1537 [3d Dept 2016]; see Reynolds v State of New York, 180 AD3d 1116, 1117-1118 [3d Dept 2020]). Thus, there must be evidence of discriminatory, harassing or demeaning conduct for the jury to assess; in our view, the generalizations and subjective characterizations to which plaintiff testified would not permit a jury to find that plaintiff's workplace was objectively hostile (cf. Lefort v Kingsbrook Jewish Med. Ctr., 203 AD3d 708, 712 [2d Dept 2022]).

To the extent plaintiff asserted a racially hostile work environment claim (see generally Forrest v Jewish Guild for the Blind, 3 NY3d at 310), such claim also should have been dismissed. Initially, defendants' evidence established that no employee uttered racially charged remarks or otherwise harassed or demeaned plaintiff based upon her race. Barber sent to plaintiff and others an email regarding a classroom left in disarray and inquired as to whether plaintiff had been issued keys to the classroom, why a file cabinet therein would be unlocked and whether the cabinet contained "anything confidential or of security concern." Notably, Barber did not specifically accuse plaintiff of theft, but instead directed the recipients to interview the incarcerated individuals in plaintiff's class. Further, defendants' proof demonstrated that plaintiff was sent that email because she was the last instructor to use that classroom. Even assuming that Barber's actions in sending the email and, on a different date, barring plaintiff from teaching in the facility one day were motivated by racial stereotypes, plaintiff cannot establish that such alleged discriminatory conduct was so severe or pervasive as to support a racially hostile work environment claim (see id.; Clauberg v State of New York, 95 AD3d 1385, 1388 [3d Dept 2012]).

As to the retaliation claim, defendants seeking summary judgment must either conclusively refute a plaintiff's prima facie claim that "(1) she has engaged in protected activity, (2) her employer was aware that she participated in such activity, (3) she suffered an adverse employment action based upon her activity, and (4) there is a causal connection between the protected activity and the adverse action" (Forrest v Jewish Guild for the Blind, 3 NY3d at 312-313; see Matter of Clifton Park Apts., LLC v New York State Div. of Human Rights, 41 NY3d 326, 331 [2024]), or provide legitimate, non-pretextual reasons for the alleged retaliatory conduct (see Graham v New York State Off. of Mental Health, 154 AD3d 1214, 1221 [3d Dept 2017]). Protesting discrimination, whether formally or informally, constitutes protected activity (see Executive Law § 296 [7]).

Here, the record establishes, and defendants cannot seriously dispute, that plaintiff engaged in protected activity by reporting alleged racial discrimination by Barber to her supervisor at NCCC and alleged sexual harassment to a colleague who subsequently reported it to NCCC (see Albunio v City of New York, 16 NY3d 472, 479 [2011]). Viewed in the light most favorable to plaintiff, the record also shows that defendants were aware that plaintiff had voiced concern about discrimination and sexual harassment at Franklin CF, and it was only then that plaintiff began experiencing alleged retaliatory conduct. Some of that conduct — Barber's email regarding the state of the classroom assigned to plaintiff and Barber's denial of her entry to Franklin CF — did not qualify as an adverse employment consequence or came with unrebutted legitimate nondiscriminatory explanations, as discussed above. As to the reduction in plaintiff's fall 2019 course assignments and the college defendants' submission of allegedly false information to the Department of Labor in July 2019, these actions were adverse and so close in time to plaintiff's reports of discrimination and harassment as to not foreclose the possibility of a causal connection (compare Koester v New York Blood Ctr., 55 AD3d 447, 449 [1st Dept 2008]).

Defendants nevertheless established entitlement to dismissal of the retaliation claims as a matter of law through evidence of legitimate, nondiscriminatory and non-pretextual reasons for their conduct (see Graham v New York State Off. of Mental Health, 154 AD3d at 1221). Evans clarified that plaintiff's classes were cancelled due to low enrollment and that NCCC was contractually obligated to prioritize full-time faculty in the assignment of courses. The record confirms that plaintiff was aware of NCCC's policy and informed that her classes were cancelled pursuant to that policy. As to plaintiff's claim respecting her unemployment benefits application in July 2019, plaintiff informed the Department of Labor that she separated from employment for lack of work. Defendants' proof, however, established that plaintiff had been assigned to teach courses in the Second Chance program for the summer 2019 term, that plaintiff had resigned from her instructor position for the summer, and that the college defendants supplied documents to the Department of Labor so indicating. The burden thus shifted to plaintiff to submit proof raising an issue of fact as to whether defendants' proffered reasons were false and pretextual, which plaintiff failed to do (see Brightman v Prison Health Serv., Inc., 108 AD3d 739, 741 [2d Dept 2013]; Pace v Ogden Servs. Corp., 257 AD2d 101, 104-105 [3d Dept 1999]; see also Clauberg v State of New York, 95 AD3d at 1387 [retaliatory hostile work environment]). 

In light of the foregoing, plaintiff's constructive discharge claim — which requires a showing that "an employer deliberately created working conditions so intolerable, difficult or unpleasant that a reasonable person would have felt compelled to resign" — must be dismissed (White-Barnes v New York State Dept. of Corr. & Community Supervision, 214 AD3d at 1232 [internal quotation marks and citations omitted]). Plaintiff's aiding-and-abetting claims against the individual defendants must be dismissed as well (see Graham v New York State Off. of Mental Health, 154 AD3d at 1223). Defendants' remaining contentions are academic.FN5

Pritzker, Reynolds Fitzgerald, Fisher and McShan, JJ., concur.

ORDERED that the order entered October 17, 2024 is affirmed, without costs.

ORDERED that the order entered October 23, 2024 is reversed, without costs, and complaint dismissed.

Footnotes

Footnote 1

The determination that plaintiff was disqualified from receiving unemployment benefits was reversed in December 2019 by the Unemployment Insurance Appeal Board.

Footnote 2

Evans is named in the action by her maiden name, Tara Smith.

Footnote 3

Plaintiff previously commenced an action in federal court, asserting violations of both state and federal law. The court dismissed the federal claims and declined to exercise supplemental jurisdiction over the state claims, leading to this action.

Footnote 4

There is no dispute that NCCC was plaintiff's employer.

Footnote 5

Although academic, we note that the college defendants would have been entitled to summary judgment on plaintiff's claim for punitive damages under the law applicable at the time of the alleged conduct (see Executive Law § 297 [former (9)]; Thoreson v Penthouse Intern., Ltd., 80 NY2d 490, 498-499 [1992]; Moccio v Fits Systems, Inc., 25 AD3d 439, 440 [1st Dept 2006]).

Audits of various New York State municipal entities posted on the Internet by New York State's Comptroller Thomas P. DiNapoli

On May 26, 2026, New York State Comptroller DiNapoli announced the following City, Town, Village and Fire District, Fire Department and Fire Company audits had been issued.

Click on the text highlighted in color to access the audit posted on the Internet.

Nota Bene. Later this same date, May 26, 2026, Comptroller DiNapoli announced additional audits were posted on the Internet and these audits have been appended hereto, adding to NYPPL's original posting.

City of Buffalo – Budget Review (Erie County) Auditors completed a review of the city’s proposed 2026-27 budget and determined the general fund will have a projected budget deficit of approximately $103 million. City officials have historically adopted budgets that relied on nonrecurring revenues to fund operations and underestimated expenditures. Therefore, city officials relied on and depleted fund balance to finance budget deficits. As a result, the city no longer has surplus fund balance available to help balance the proposed budget.

Kerhonkson Fire District – Board Oversight (Ulster County) The board did not provide adequate oversight of the district’s financial activities and was not transparent. The district’s required annual financial report (AFR) was last filed in 2007, more than 18 years ago. In addition, the board’s inadequate review of claims led to claims potentially being paid without sufficient budgetary appropriations available.

Midway Fire Department – Disbursements (Albany County) The board did not ensure disbursements had adequate supporting documentation, were for appropriate purposes and were properly approved by the trustees. Officials also were not aware of the proper use of Foreign Fire Insurance tax proceeds and made unauthorized disbursements using those funds.

North Brookfield Fire District – Board Oversight (Madison County) The board did not adequately oversee the district’s financial operations. The board did not require the secretary-treasurer to maintain appropriate accounting records, prepare bank reconciliations, provide adequate monthly financial reports or file AFRs with DiNapoli’s office, as required by state law. As a result, the board had insufficient information to properly oversee the district’s financial operations and make informed financial decisions. Because the board did not provide sufficient oversight of the secretary-treasurer’s duties, there was also an increased risk that funds could be misappropriated.

Schodack Landing Fire District No. 1 – Claims Auditing (Rensselaer County) Auditors reviewed 60 claims totaling $163,940 approved by the board. Except for minor issues auditors discussed with district officials, the claims were mathematically correct, supported and for valid district purposes. There were no recommendations as a result of this audit.Taberg Volunteer Fire Company Inc. – Financial Activities (Oneida 

County) The board and treasurers did not ensure financial activities were properly recorded and reported and that funds were safeguarded. Because the treasurers did not maintain adequate financial records and written financial reports, the board and membership lacked the information to effectively oversee the company’s financial activities. In addition, weaknesses in recordkeeping and controls over cash collections and disbursements prevented the board from ensuring that all collections were deposited and that payments were made only for valid company purposes.

Town of Catharine – Transparency of Fiscal Activities (Schuyler County) The board did not conduct an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not file the 2024 AFR with DiNapoli’s office, as required by state law. The supervisor also did not provide the board with complete monthly financial reports.

Town of Fremont – Transparency of Fiscal Activities (Sullivan County) The board did not conduct an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not prepare and file AFRs with DiNapoli’s office for the last eight fiscal years, as required by state law. The supervisor did not provide the board with complete, accurate and reliable monthly financial reports.

Town of Greenville – Transparency of Fiscal Activities (Greene County) The board did not conduct an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not file the 2024 annual AFR with DiNapoli’s office, as required by state law. The supervisor also did not provide the board with complete, accurate and reliable monthly financial reports.

Town of New Hudson – Transparency of Fiscal Activities (Allegany County) The board did not conduct an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not prepare and file the 2020 through 2022, and 2024 AFRs with DiNapoli’s office, as required by state law. The supervisor filed the AFR for fiscal year ending Dec. 31, 2023, on Aug. 28, 2025 – 544 days after the due date. Furthermore, the supervisor provided the board with incomplete monthly financial reports.

Town of Pamelia – Transparency of Fiscal Activities (Jefferson County) The board did not conduct an annual audit of the supervisor’s financial records and reports for fiscal year 2024 in accordance with state law. In addition, the supervisor did not prepare and file the 2022 through 2024 AFRs with DiNapoli’s office, as required by state law. The supervisor did not provide the board with complete monthly financial reports.

Town of Spencer – Procurement (Tioga County) The board and town officials did not always seek competition for purchases. One board member had a prohibited conflict of interest that arose from his paving company providing services to the town totaling approximately $12,911 during the audit period. Because officials did not always solicit competition for goods and services or avoid conflicts of interest, they cannot guarantee that they secured the most favorable terms and conditions.

Village of Churchville – Electric Utility Services Billing and Collections (Monroe County) The board did not provide adequate oversight of electric utility services billing and collections. The board did not request financial or electric utility services use, billing or collection reports or reconciliations to monitor operations. The board also did not review and approve use and billing adjustments or develop and adopt billing and collection policies to provide guidance to officials and employees. As a result, officials and employees developed informal procedures that did not adequately segregate duties or include periodic reviews and reconciliations and significantly impacted the timely identification and correction of billing errors.

Village of Fredonia – Financial Condition (Chautauqua County) Auditors found that trustees did not fully understand the village’s financial condition and relied heavily on the treasurer for guidance. The board did not take appropriate actions to maintain the village’s fiscal stability, such as adopting structurally balanced budgets and written multiyear capital and financial plans and ensuring that the treasurer filed annual statements and AFRs when required. As a result, the village’s financial condition deteriorated over a six-year period from the 2019-20 through 2024-25 fiscal years.

Village of Rhinebeck – Claims Auditing (Dutchess County) The board did not properly audit all claims before payment. Without a thorough review of all claims to be paid, errors and irregularities may continue to occur and remain undetected and uncorrected, unsupported payments could continue to be made, and improper or unnecessary payments may not be detected and corrected. Without evidence of competition attached to claims, taxpayers have less assurance that purchases were made in the most prudent and economical manner.

N.B. Later this same date, May 26, 2026, the Comptroller announced the audits described below were also posted on the Internet.

New York City Department of Social Services – New York City Department of Homeless Services: Oversight of Contract Expenditures of Samaritan Daytop Village, Inc. (Follow-Up) (2025-F-23) The New York City Department of Homeless Services (DHS), an administrative unit of the New York City Department of Social Services, is responsible for providing transitional housing and services for eligible homeless families and individuals in New York City and for providing fiscal oversight of the homeless shelters. In July 2013, DHS contracted with Samaritan Daytop Village, Inc. (Samaritan), a city-based not-for-profit organization, to provide temporary housing, case management, housing referrals, placement services, and on-site medical and mental health services for men with mental illness at its 160-bed Myrtle Avenue Men’s Shelter for the period from August 2013 to June 2018. DHS is responsible for monitoring its contract with Samaritan to ensure reported costs are allowable, supported, and program related. A prior audit, issued in February 2024, found DHS was not effectively monitoring its contract with Samaritan and identified $566,556 of all reported costs that did not comply with requirements. DHS officials made some progress in addressing the issues identified in the initial audit report, partially implementing five recommendations and not implementing one.

New York City Department of Small Business Services: Facilitated Programs to Assist Small Businesses (2022-N-4) The New York City Department of Small Business Services (SBS) contracts with outside entities known as Industrial Business Service Providers and Business Solutions Centers to support programs that assist businesses with identifying the best available financial products, working with lenders to package loans, collecting financial documents and completing forms, submitting final loan applications to lenders, following up to ensure disbursement of funds, providing post-financing advisement, and training. The 76 businesses reviewed obtained facilitated loans of $97,363,816; however, SBS does not collect data on the beneficial effects of this financing, such as the creation of new jobs or strengthening of the businesses’ operations. Additionally, SBS does not verify program performance in terms of the number and amount of the facilitated loans. Instead, the program results are self-reported by the vendors.

Department of Health: Maternal Health (Follow-Up) (2025-F-26) Maternal mortality refers to deaths of pregnant persons during pregnancy or within a year of the end of pregnancy. Severe maternal morbidity is defined as unexpected outcomes of pregnancy, labor, or delivery that result in short- or long-term consequences to a person’s health. To address alarming rates of maternal mortality and morbidity, as well as racial disparities in these rates, New York established the Taskforce on Maternal Mortality and Disparate Racial Outcomes in April 2018, and it produced 10 recommendations. The recommendations required a collaboration between public and private entities, with DOH being a main player in the majority of the recommendations. A prior audit, issued in July 2024, found that while DOH had made progress in addressing the recommendations to improve maternal health, data showed that maternal mortality and morbidity rates in New York State had not decreased since the Taskforce was established in 2018, and the maternal mortality rate had actually increased, along with increasing racial disparities statistics. DOH officials made significant progress in addressing the issues identified in the initial audit report, implementing the report’s one recommendation.

New York City Public Schools: Privacy and Security of Student Data (2023-N-6) New York City Public Schools (NYCPS) uses Automate the Schools as its main student information system, which standardizes and automates the collecting and reporting of student data. NYCPS maintains and uses students’ personally identifiable information for a variety of educational purposes and is responsible for safeguarding student data and ensuring the confidentiality, integrity, and availability of its information systems. Auditors found gaps in and misalignments of policies relating to data privacy and security, data classification, risk assessment, and backup and recovery. Additionally, NYCPS does not always report breaches or notify affected parties within the required time frames or maintain a comprehensive list of all applications used by each school that would help it better understand its environment, the type of information being stored, and the risks associated with the data.

New York City Department of Housing Preservation and Development and New York City Housing Development Corporation: Housing for Seniors (Follow-Up) (2025-F-19) The New York City (NYC) Department of Housing Preservation and Development (HPD) and NYC Housing Development Corporation (HDC) work together to administer several programs to assist in the development and rehabilitation of housing for senior citizens, including the Senior Affordable Rental Apartments Program (SARA Program), federal Section 202 Supportive Housing for the Elderly Program (Section 202 Program), and HPD’s Senior Citizen Homeowner Assistance Program (SCHAP). A prior audit, issued in July 2023, reviewed a sample of four developments assisted through the SARA Program—HANAC Corona Senior Residence in Queens, Serviam Heights LLC in the Bronx, Victory Plaza in Manhattan, and Woodlawn Senior Living in the Bronx—and one development assisted through the Section 202 Program, Bensonhurst Housing for the Elderly in Brooklyn. Despite the scarcity of affordable housing for seniors, the audit found several instances where senior housing units were left vacant for long periods of time, senior housing units were not always awarded to the correct applicants, and SCHAP requirements were not met. HPD and HDC officials made some progress in addressing the problems identified in the initial audit report. Of the initial report’s six audit recommendations, three (addressed to HDC) were implemented, two (addressed to HPD) were partially implemented, and one (also addressed to HPD) was not implemented.

###

Judicial review of an arbitration award

An individual [Employee] employed by Petitioner [Employer] was suspended without pay following an investigation and shortly thereafter was served with a notice of discipline [NOD]. The Employer's NOD's recommended the Employee's termination as the disciplinary penalty to be imposed.

Pursuant to the collective bargaining agreement [CBA] and an incorporated separate memorandum of agreement [MOA] between the State of New York and Employee's collective bargaining unit representative, the New York State Public Employees Federation, AFL-CIO [PEF], PEF and Employee filed a grievance seeking judicial review of the NOD disciplinary arbitrator's [DA] decision. Employee also exercised his contractual right to challenge his immediate suspension without pay by Employer before a "triage" arbitrator [TA]*. 

A multiday virtual NOD hearing was held and the DA thereafter issued a decision denying Employee's grievance after finding Employee guilty of one of the three misconduct charges served upon him. The disciplinary penalty imposed: a three-month suspension without compensation and restitution of funds for Employee's "time theft". 

Employee then commenced the instant CPLR Article 75 proceeding seeking a court order vacating the arbitration award, alleging that the DA exceeded his authority under the MOA by considering the TA's determination in fashioning the penalty imposed. Supreme Court agreed and granted the Employee's petition, in part, by vacating the penalty and remitting the matter to the same DA to reconsider the disciplinary penalty imposed in light of the Supreme Court's rulings. Supreme Court also stayed the deduction of restitution payments from Employee's paychecks pending the DA's reconsideration of the penalty imposed. Employer appealed.

Citing Matter of Falzone [New York Cent. Mut. Ins. Co.], 15 NY3d 530 and other decisions, the Appellate Division observed that:

    1. "It is well settled that a court may vacate an arbitration award only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power"; and 

    2. "Aside from those circumstances, courts may not vacate an award based on their disagreement with the reasoning or outcome, even if the arbitrator made errors of law or fact.

The Appellate Division's decision then noted that "... although an arbitrator's interpretation of contract language is generally beyond the scope of judicial review, where a benefit not recognized under the governing [collective bargaining agreement] is granted, the arbitrator will be deemed to have exceeded his or her authority".

The Appellate Division explained that "without passing on the appropriateness of the penalty" imposed on Employee, it agreed with Supreme Court that the DA "consider[ed]" the TA's finding "in determining an appropriate penalty," thus exceeding an enumerated limitation on the TA's authority. 

The Appellate Division said it found no error in Supreme Court's decision to partially vacate the arbitration award and remit the matter to the DA for a redetermination of the penalty to be imposed, ordering that Supreme Court's ruling  "modified, on the law, without costs, by reversing so much thereof as stayed paycheck deductions related to restitution" and  vacated the penalty imposed by the DA "in all respects".

* A negotiated procedure between PEF and the State of New York as the employer provided for an independent "triage arbitrator" [TA] examining such a pending suspension without pay before it can be implemented and should the TA determines that such a suspension without pay is not warranted, then one cannot be imposed at that time. In the instant appeal such an examination was held and the TA found that a suspension without pay was not warranted.

Click HERE to access the Appellate Division's decision posted on the Internet.

New York State Comptroller Thomas P. DiNapoli issued the municipal and school audits listed below on April 14, 2026

Audit reports for the following local governments and school districts were posted on the Internet by the New York State Comptroller on April 14, 2026.New York State Comptroller Thomas P. DiNapoli issued the municipal and school audits listed below on April 14, 2026 

Click on the text highlighted in color to access the reports posted on the Internet.

City of Mechanicville – Separation Payments (Saratoga County) City officials did not ensure the accuracy of employee separation payments. As a result, three employees received questionable or unsupported payments totaling $15,766 of vacation payouts due to miscalculations and an ineligible retirement incentive. Specifically, auditors determined that three payments totaling $37,118 were inconsistent with the city’s handbook and collective bargaining agreements, which may have resulted in the overpayments. Auditors also found that officials did not have adequate policies or written procedures in place to guide how separation payments should be calculated, approved and reviewed.

City of Mechanicville – Procurement (Saratoga County) Auditors found that officials did not always procure goods and services in accordance with policy, statutory requirements or good business practices. Officials made purchases without proper oversight, did not maintain records and did not consistently use a competitive process. Of the sample of 35 purchases totaling $2.26 million reviewed, auditors identified 24 purchases totaling approximately $760,000 that did not comply with the procurement policy or statutory requirements. While the city’s procurement policy was inadequate and inconsistent, it did require department heads to verify that funds were available before making purchases. However, the finance office did not have updated accounting records. Consequently, department heads made purchases without confirming there were available budget appropriations, which led to financial discrepancies and inefficiencies.

City of Mechanicville – Financial Oversight (Saratoga County) The mayor and city officials did not provide oversight of financial operations. As a result, the council could not fully assess the city’s financial condition or make informed decisions. The commissioner did not maintain current accounting records or ensure financial reports were accurate. Bank reconciliations were either not completed or contained large, unresolved variances. Also, the commissioner did not submit two years of annual financial reports (AFRs) to DiNapoli’s office in a timely manner, as required by law. The mayor also did not establish formal procedures to monitor financial reporting or verify the accuracy of accounting records.

Village of Sherburne – Budgeting (Chenango County) The board adopted budgets that underestimated revenues in the general fund and overestimated appropriations in the general, water and sewer funds. As a result, the board levied more taxes than were needed to fund the village’s operations. The board also generated unplanned operating surpluses totaling approximately $1.1 million despite having planned for operating deficits totaling $1.3 million. As a result, none of the appropriated fund balance was needed or used. In addition, the unrestricted fund balance increased by approximately $1.1 million in the general, water and sewer funds. Lastly, the budgets for the 2022-23 through 2025-26 fiscal years did not comply with state law or guidance from DiNapoli’s office and lacked sufficient detail, which reduced transparency and limited effective financial planning.

Village of Victory – Records and Reports (Saratoga County) The clerk-treasurer did not maintain accurate and complete accounting records, provide the board with adequate monthly reports or file AFRs in a timely manner, which limited the board’s ability to monitor financial operations. The clerk-treasurer also did not properly prepare bank reconciliations or budget status reports, which lacked pertinent information. As of Sept. 10, 2025, AFRs were filed between 41 and 1,322 days late.

Village of Youngstown – Employee Benefits and Payroll (Niagara County) Village officials did not maintain accurate leave records or ensure payroll payments were properly approved and supported. Employees received payouts and used leave without proper authorization, including $9,802 in unsupported payments, 1,524 unapproved leave hours and 313 compensatory hours accrued without authorization. In addition, village officials made inaccurate payroll payments totaling approximately $2,500.

Village of Churchville – Procurement (Monroe County) Village officials did not consistently solicit competition in accordance with statutory requirements or its procurement policy. Of the approximately $1.4 million in goods and services reviewed, auditors determined officials did not seek competition for purchases totaling $664,748. Specifically, village officials did not always issue requests for proposals, ensure the village received the New York State Office of General Services contract price in lieu of competitively bidding, or obtain the minimum number of written quotes required by the village’s procurement policy. For two purchases totaling $31,397, officials did not obtain any written quotes. In addition, the village’s procurement policy did not include details on when board approval was required prior to making purchases, and officials signed and approved their own purchases.

Plainville Fire District – Audit Follow-Up (Onondaga County) The review assessed the Plainville Fire District’s progress in implementing recommendations in the audit, Plainville Fire District – Board Oversight, released in October 2021. The audit determined that the board did not provide adequate oversight of the district’s financial operations and exceeded its authority by allowing the district treasurer to pay all recurring expenditures without the board’s prior review or approval. To help the board ensure that it provides adequate oversight of fire district operations, the audit contained eight recommendations. The board fully implemented four recommendations, partially implemented three and did not implement one. Until all recommendations are addressed, the board cannot ensure district assets are appropriately safeguarded.

South Orangetown Central School District – Audit Follow-Up (Rockland County) The review assessed the South Orangetown Central School District’s progress in implementing recommendations in the audit, South Orangetown Central School District – Network User Accounts, released in August 2022. The audit determined that district officials did not ensure network user accounts were adequately managed. The audit report contained four recommendations. While district officials fully implemented one recommendation, they only partially implemented the remaining three recommendations. As a result, the district’s network continued to have increased risk for unauthorized access, misuse or data loss.

Woodbourne Fire District – Audit Follow-Up (Sullivan County) The review assessed the Woodbourne Fire District’s progress in implementing recommendations in the audit, Woodbourne Fire District – Board Oversight, released in December 2023. The audit determined that the board and treasurer did not provide adequate oversight of the district’s financial operations. The audit contained 10 recommendations. The district fully implemented three recommendations, partially implemented four, and did not implement three recommendations. Until all are addressed, the board cannot ensure financial operations are properly monitored or assets are safeguarded.

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New York State Comptroller Thomas P. DiNapoli released the following State Government Accountability audits

Audits of the New York State Departments and Agencies listed below were posted on the Internet by New York State Comptroller Thomas P. DiNapoli on April 2, 2026.

Click on the text highlighted in color to access these audits.

Department of Health – Medicaid Program: Managed Care Payments to Unenrolled Providers (Follow-Up) (2025-F-21)

The 21st Century Cures Act mandated that managed care in-network providers, with certain exceptions, enroll as participating providers in the state Medicaid program by January 1, 2018. Through the screening and provider enrollment process, the Department of Health (DOH) gains some assurance of providers’ validity to provide Medicaid services. A prior audit, issued in June 2024, found that DOH did not monitor encounter claims to identify inappropriate managed care payments to providers who were not enrolled in Medicaid and found weaknesses in controls that led to over $1.5 billion in improper and questionable payments. DOH officials made some progress in addressing the problems identified in the initial audit report. Of the initial report’s 10 audit recommendations, two were implemented, five were partially implemented, and three were not implemented.

Department of Health – Medicaid Program: Recovering Managed Care Payments for Inpatient Services on Behalf of Recipients With Third-Party Health Insurance (Follow-Up) (2025-F-10)

The Department of Health (DOH) uses post-payment reviews to identify when a third-party health insurance (TPHI) carrier may be responsible for payments for services originally paid by Medicaid. The Office of the Medicaid Inspector General (OMIG) contracted with Health Management Systems, Inc. (a Gainwell Technologies company [Gainwell]), to perform these reviews and to pursue recoveries from TPHI carriers or providers. A prior audit, issued in September 2023, determined that DOH and OMIG lacked adequate oversight of the third-party liability recovery process. Gainwell had not billed TPHI carriers for the recovery of about $52.2 million in inpatient encounter claims that Medicaid managed care organizations paid as the primary insurance for recipients who, according to eMedNY (DOH’s Medicaid claims processing and payment system), had TPHI inpatient coverage. DOH and OMIG officials made minimal progress in addressing the problems identified in the initial audit report. Of the initial report’s eight audit recommendations, two were implemented, two were partially implemented, and four were not implemented.

Department of Health – Medicaid Program: Medicaid Payments for Early Refills of Prescription Drugs and Supplies (2024-S-16)

Through NYRx, New York State Medicaid’s Pharmacy program, the Department of Health (DOH) pays pharmacies directly for medically necessary prescription drugs and supplies provided to Medicaid members. Early refills are refills on prescriptions before the previous supply has been fully used. For the period from April 2023 through October 2024, auditors identified over 3.6 million claims totaling approximately $585.2 million for drugs and supplies refilled too early. While many claims were filled just a few days earlier than allowed by policy, nearly 43% of the findings had 20 or more excess supply days. Auditors identified multiple weaknesses in DOH’s edit logic that allowed these claims to be paid despite meeting DOH’s criteria for denial.

Department of Health – Medicaid Program: Claims Processing Activity October 1, 2024 Through March 31, 2025 (2024-S-26)

During the 6-month period ended March 31, 2025, the Department of Health’s (DOH) claims processing system, eMedNY, processed over 328 million Medicaid claims, resulting in payments to providers of over $46 billion. Auditors identified over $13.8 million in improper Medicaid payments. As a result of the audit, more than $3.4 million of the improper payments was recovered. The audit also identified 14 Medicaid providers who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs. In response to these findings, DOH removed 13 providers from the Medicaid program and was reviewing the ownership status of the remaining provider.

Homes and Community Renewal – Division of Housing and Community Renewal: Physical and Financial Conditions at Selected Mitchell-Lama Developments Located Outside New York City (Follow-Up) (2025-F-18)

The Mitchell-Lama Housing program was created to provide affordable rental and cooperative housing to middle-income families. A prior audit, issued in December 2023, found the Division of Housing and Community Renewal (DHCR) did not adequately oversee the physical and financial conditions at the sampled developments. Management at those developments misspent funds and failed to provide a safe and clean living environment for the residents. Auditors identified issues with 164 transactions totaling $327,363 and, at two of five sampled developments, observed hazardous conditions such as water-damaged ceilings and rusty, loose railings. DHCR officials made some progress in addressing the problems identified in the initial audit report, implementing one audit recommendation, partially implementing four, and not implementing two.

Homes and Community Renewal – Division of Housing and Community Renewal: Physical and Financial Conditions at Selected Mitchell-Lama Developments Located Outside New York City – Sunnyside Manor: Unauthorized Bank Account (Follow-Up) (2024-F-24)

The Mitchell-Lama Housing program was created to provide affordable rental and cooperative housing to middle-income families. A prior audit, issued in July 2024, found that Sunnyside Manor’s Board held a checking account separate from the development’s operating account, with a balance of $14,888 as of March 31, 2022. Bank statements for the Board-held account showed numerous questionable debit card transactions. This Board-held account was not included on Sunnyside Manor’s general ledger and audited financial statements and appears to have received limited oversight. Division of Housing and Community Renewal officials have made progress in addressing the issues identified in the initial audit report. Of the initial report’s three audit recommendations, two were implemented and one was partially implemented.

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