Audits and reports issued during the week ending June 4, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending June 4, 2021.

Click on the text highlighted in colorto access the complete audit report.

Local Governments

Auditors conducted reviews of 20 adopted budgets of various counties, cities, towns and villages across the state to assess whether local officials adequately considered the impact of the pandemic on their financial operations while developing their 2021 fiscal year budgets. Below are the findings of some of the communities reviewed:

Adequacy of 2021 Budgets – Town of Big Flats (Chemung County) Town of Big Flats officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Village of Camillus (Onondaga County) Village of Camillus officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – City of Canandaigua (Ontario County) City of Canandaigua officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Jefferson County Jefferson County officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Town of North Hempstead (Nassau County) Town of North Hempstead officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Otsego County Otsego County officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Steuben County Steuben County officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.  

Village of Castile – Water Billing for Letchworth State Park (Wyoming County) Village officials did not accurately bill State Parks for water usage. They were using incorrect water usage overage rates since June 2017. As a result, they overbilled State Parks by $7,577. In addition, village officials charged $12,000 in late fees that were not authorized by the contract or contract amendment.

East Meredith Rural Fire District – Financial Activities (Delaware County) The board did not establish adequate controls over cash receipts and disbursements. Auditors found the board did not segregate duties or provide additional oversight over receipts and disbursements to ensure the treasurer accurately recorded all transactions in a timely manner.  

Franklin-Treadwell Fire District – Disbursements (Delaware County) Although district officials had some good controls over disbursements, the board did not always provide adequate oversight of the treasurer’s activities. The Board of Fire Commissioners did not properly segregate duties over disbursements or implement adequate mitigating controls. The treasurer processed 55 electronic transfers and 10 cash withdrawals totaling $856,347 without board oversight. Aside from minor exceptions, which auditors discussed with district officials, disbursements were authorized, supported and for appropriate district purposes. However, the failure to review disbursement activities increases the risk for unauthorized and inappropriate transactions.

Town of Friendship – Justice Court Operations (Allegany County) Although the justices properly collected, recorded and reported fines and fees, they did not deposit and disburse all fines and fees in a timely manner. Auditors found 67 receipts totaling almost $11,000 were not deposited within 72 hours, as required. Monthly accountabilities were not performed. As of Dec.1, 2020 the town board had not completed an audit of the 2018 and 2019 records, as required. As a result, the board’s ability to effectively monitor financial operations of the court was diminished.

Town of Hancock – Justice Court Operations (Delaware County) Fines and fees auditors tested were properly recorded and deposited intact and in a timely manner. However, monthly accountabilities were not performed, and cash balances exceeded known liabilities by $3,436 as of June 30, 2020.

NFC Development Corporation – Project Approval and Monitoring (Niagara County) Corporation officials awarded projects in accordance with established guidelines, but once funds were disbursed, officials generally did not follow up with businesses to ensure they complied with their agreements. Auditors examined 19 project agreements. They found officials did not confirm that the 18 businesses, which agreed to create or retain a total of 96 positions, actually created or retained them. In addition, three of the eight loans reviewed had delinquent payments totaling $39,000. The board also did not receive project status reports and it did not meet as required.

Town of Owasco – Highway Department (Cayuga County) Town officials did not adequately oversee highway purchasing, planning and interfund charges.

Auditors found 596 highway claims totaling $349,824 that did not have an approved purchase order request; 599 claims totaling $356,815 did not have an approved purchase order request; and 234 claims totaling $96,900 did not have documentation to support a business purpose.

Tompkins County Development Corporation – Board Oversight (Tomkins County) The board generally oversaw operations but was unaware that its policy covered the calculation of the administrative fee. As a result, an administrative fee of $88,815 was collected even though only $1,000 should have been collected in accordance with the current board-approved policy.

City of Yonkers – Budget Review (Westchester County) Auditors found that significant revenue and expenditure projections in the adopted budget are not reasonable. In addition, city officials’ continued practice of using debt to pay for recurring costs is imprudent.

###

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 180,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.

 

 

Adjudicating allegations of errors in the text of laws as printed in a legal resource, manual or publication

In this lawsuit the Court of Appeals, Justice Fahey dissenting in part, observed that for several consecutive years, the Plaintiffs bought the annual edition of a legal resource manual published and sold by the Defendant. 

The main issue in this appeal was whether Plaintiffs' complaint adequately pleaded a deceptive act or practice prohibited by General Business Law §349 [GBL §349] based on Defendant's alleged misrepresentations about the completeness of the laws reproduced in one section of its publication. 

Although Defendant's acts are consumer-oriented*, the Court of Appeals concluded that the Defendant's acts were not materially misleading. Contrary to Plaintiffs' argument, the court opined that "a consumer acting reasonably under the circumstances here would not have believed that [Defendant] represented that the section at issue, containing rent control statutes and regulations, was current and accurate for its one-year shelf life."

In sum, said the court, Plaintiffs' "cause of action is based on purchases of yearly editions of the [publication] under a sales agreement that charged extra for any updates of the year's materials contained in the corresponding edition."

Observing that Plaintiffs' allegations "were limited to omissions and inaccuracies in a section of the [publication] they knew was subject to legislative amendment, which they concede were corrected in the 2017 edition after the errors were brought to defendant's attention, and which were specifically contemplated by defendant's express disclaimer of the currentness of the [publication's] contents", the Court of Appeals concluded that "[under] the circumstances, plaintiffs, or any reasonable consumer, could not have been materially misled to believe that defendant guaranteed Part III of the [publication] was complete and accurate at any given time."

As the Plaintiffs failed to adequately plead this element, the Court of Appeals held that "their GBL §349 cause of action was properly dismissed."

* The alleged misrepresentations were contained in a manual that was then marketed to and available for purchase by consumers.

Click HERE to access the Court of Appeals' decision.

 

A plaintiff typically must initiate a Civil Service Law §75-b "whistle blower" cause of action within one year of the alleged act or omission

Civil Service Law §75-b, the so-called whistle-blowing statute, provides that "[a] public employer shall not dismiss or take other disciplinary or other adverse personnel action against a public employee ... because the employee discloses to governmental body information:

(i) regarding a violation of a law, rule or regulation which violation creates and presents a substantial and specific danger to the public health or safety; or

(ii) which the employee reasonably believes to be true and reasonably believes constitutes [a violation of any federal, state or local law, rule or regulation]".

Further, in order to maintain a Civil Service Law §75-b cause of action, a plaintiff must commence the action "within one year after it accrues."

On April 8, 2013, a public employee [Plaintiff] commenced legal action against his public employer [Respondent] alleging that Respondent had terminated his employment in violation of Labor Law §740 in retaliation for his complaints of certain improprieties alleged to have occurred in his department in November 2009. Plaintiff subsequently amended his complaint to allege a violation of Civil Service Law75-b.

The Respondent moved for summary judgment dismissing the complaint. Supreme Court granted the Respondent's motion and Plaintiff appealed.

The Appellate Division order affirmed the Supreme Court's action, with costs, explaining:

1. Employee commenced this action on April 8, 2013, and, therefore, only the retaliatory acts that were alleged to have occurred on or after April 8, 2012, may be considered as timely.

Accordingly, said the court, the allegedly retaliatory acts which took place in 2009 and 2010 "were insufficient to establish a viable claim of a continuing violation" and, further, the continuing violation doctrine did not toll the running of the statute of limitations.

2. Civil Service Law §75-b(4) provides that nothing in the statute prohibits any "personnel action which otherwise would have been taken regardless of any disclosure of information."

Here, opined the Appellate Division, the Respondent "established its prima facie entitlement to summary judgment by showing that it terminated Employee for budgetary reasons and Employee "failed to raise a triable issue of fact."

Click HERE to access the Appellate Division's decision. 

 

Leave for Quarantine

The New York State Department of Civil Service has published Advisory Memorandum 2021-04, Attendance Rule 21.11 – Leave for Quarantine. 

The text of Advisory Memorandum 2021-04 is posted on the Internet at https://www.cs.ny.gov/attendance_leave/AdvMemo21-04.cfm.

If you wish to print Advisory Memorandum 2021-04, a version in PDF format is posted on the Internet at https://www.cs.ny.gov/attendance_leave/am21-04.pdf.

To view previous Attendance and Leave bulletins issued by the Department of Civil Service, visit https://www.cs.ny.gov/attendance_leave/index.cfm.

N.B. Except as otherwise specified in a particular rule or regulation, the Rules and Regulations of the New York State Department Of Civil Service apply to incumbents of positions in the classified service of the State as the employer, a public authority, a public benefit corporation and an other entity for which the New York State Civil Service Law is administered by the New York State Department of Civil Service. 

Determining if apportionment is to be applied in determining a claimant's workers' compensation award

The Appellate Division, noting that "[as] a general rule, apportionment is not applicable as a matter of law where the preexisting condition was not the result of a compensable injury and the claimant was able to effectively perform his or her job duties at the time of the work-related accident despite the preexisting condition," indicated that a limited exception to this general rule exists.

In the words of the court, "apportionment may be applicable in a schedule loss of use [SLU] case "if the medical evidence establishes that the claimant's prior injury - had it been compensable - would have resulted in an SLU finding."

In the absence of a medical opinion that the claimant's injury would have resulted in an SLU award if it had been compensable, the Appellate Division declined to disturb the Workers' Compensation Board's determination "that there is insufficient evidence to conclude that apportionment was appropriate" under the relevant circumstances with respect to the instant applicant's claim.

Click HERE to access the Appellate Division's decision. 

 

Live Government Technology webinars scheduled for the week of June 1, 2021

A Radically Simple Approach to Disaster Recovery -

Wednesday, June 2 | 1:00pm Eastern

As the value of data is increasing, governments have to be prepared for the worst. Does your organization have a simple yet scalable plan to recover from disasters? In the event of a crisis, how will you restore your data quickly? What happens if you can’t? Too often, state and local governments’ DR plans focus on recovering specific technological systems and associated storage locations. In the modern digital era, however, that approach is outdated and dangerous. Instead, organizations should focus their DR plans on safeguarding and recovering the valuable data – no matter where it lives.
Register to attend here.

Rapid Recovery: How Governments Can Futureproof Data Protection in the Era of Ransomware

Thursday, June 3 | 1:00pm Eastern

The ransomware threat is rising and state and local governments, education institutions and federal agencies continue to be a prime target. While prevention is key, an attack is more and more inevitable in an increasingly digital environment. Instead of spending an endless amount of time and money recovering from ransomware, it’s critical for the public sector to invest in enhanced data protection to ensure rapid restore is possible.
Register to attend here.

How Digital Credentials Fuel Economic Recovery and Better Constituent Service 

Thursday, June 3 | 2:00pm Eastern

The state of New York recently launched Excelsior Pass – a free, voluntary way for residents to share their COVID-19 vaccination or negative COVID-19 test status in accordance with state guidelines. The Excelsior Pass is a privacy-driven solution that will help the New York economy to reopen safely while keeping resident’s personally identifiable information safe. The Excelsior Pass is only one example of how digital credentials can transform constituent engagement, streamline government operations and build a culture of trust. Digital credentials – powered by blockchain technology – can be used for driver’s licenses, professional certifications, hunting and fishing licenses, high school and college transcripts, and more.
Register to attend here.

To view upcoming and on-demand webinars, visit webinars.govtech.com.

For assistance with registration, contact:
Jeremy Smith, jsmith@erepublic.com (916) 932-1402 direct

 

A school board wishing to enter into an executive session in the course of a school board meeting must comply with the relevant requirements set out in New York State's Open Meetings Law

The genesis of Decisions of the Commissioner of Education, Decision No. 17,989, was a ruling by Supreme Court that the school board’s discussion of a certain matter in executive session violated New York State's Open Meetings Law. 

Supreme Court issued a decision declaring that the school board had “violated the Open Meetings Law on June 9, 2020,” finding that there was "no material dispute" that the school board violated §§105 and 106 of the Public Officers by failing to state prior to entering Executive Session the matter that it intended to discuss and thereafter, in fact, discussed that matter.

With respect to Petitioner's appeal to the Commissioner of Education that resulted in Decision No. 17,989, Petitioner contended that he did not engage in “official misconduct” as charged by the school board in view of the Supreme Court’s determination that the challenged Executive Session as conducted by the school board violated the Open Meetings Law.

Decision No. 17,989 is instructive in that in adjudicating Petitioner's appeal, Commissioner of Education Betty A. Rosa addressed the following issues:

1. Efforts by a school board to remove a member of the board for "official misconduct";

2. Requirements to be satisfied by a school board in order to lawfully meet in Executive Session;

3. Allegations that a school board member disclosed "confidential information acquired by him [or her] in the course of his [or her] official duties or [using] such information to further his [or her] personal interests”; and

4. The authority of the Commissioner of Education to "define the meaning of the word 'confidential' within the public school system."

Ultimately the Commissioner found that the school board's removing Petitioner from the board for alleged "official misconduct was arbitrary and capricious" and sustained his appeal challenging such removal.

Click HERE to access Decision of the Commissioner #17,989.

Firefighter's application for accidental disability retirement benefits rejected based on substantial evidence that the injuries were not the result of an accident

A firefighter [Plaintiff] filed an application for accidental disability retirement benefits alleging that he was permanently disabled as a result of injuries sustained during seven different incidents occurring between 2006 and 2017. ERS, however, denied Plaintiff's application upon the ground that the incidents did not constitute accidents within the meaning of Retirement and Social Security Law §363. Ultimately Plaintiff withdrew four of the seven incidents, and the sole issue to be resolved was whether these incidents "qualified as accidents."

The ERS Hearing Officer denied Plaintiff's application, finding, among other things, that the cited incidents occurred during the course of Plaintiff's routine employment duties and were risks inherent in the performance of those duties. The Comptroller sustained the Hearing Officer's determination and Plaintiff initiated a CPLR Article 78 proceeding challenging the Comptroller's decision.

"As the applicant, [Plaintiff] bore the burden of establishing that his disability was the result of an accident within the meaning of the Retirement and Social Security Law ... [the Appellate Division said that the Comptroller's] determination on that point will be upheld if supported by substantial evidence in the record as a whole. Further, said the court, "for the purposes of §363, an accident is "a sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact," citing Matter of Kenny v DiNapoli, 11 NY3d 873 and other court decisions. In contrast, opined the Appellate Division, "[a]n injury that results from the performance of ordinary employment duties and is a risk inherent in such job duties is not considered accidental."

The decision reports that Plaintiff "does not dispute, and the record indeed establishes, that [Plaintiff] was engaged in the performance of his ordinary firefighting duties during each of the incidents at issue" which involved encountering smoke, water, tangled hose lines, reduced visibility and debris, falling ice that 'could have been reasonably anticipated' as well as the corresponding threat of tripping or falling due to such conditions."

Concluding that substantial evidence supported ERS's finding that the incidents at issue did not constitute accidents within the meaning of §363, the Appellate Division declined to disturb the Comptroller's decision.

Click HERE to access the Appellate Division's decision. 

Former town clerk to serve six months in county jail after pleading guilty to stealing public funds

New York State Comptroller Thomas P. DiNapoli reported that a former town clerk [Clerk] was sentenced to six months in County jail for stealing nearly $27,000 in public funds for her personal use after she pled guilty to a number of criminal charges including "grand larceny in the third degree/public servant (a class C Felony); two counts of tampering with public records in the first degree (a class D felony); scheme to defraud in the first degree (a class E felony) and official misconduct (a class A misdemeanor)."

Clerk's thefts, which were discovered during a joint investigation by the State Comptroller's office, Yates County District Attorney Todd Casella’s office and Yates County Sheriff Ronald Spike’s office, consisted of cash payments made to the town for property taxes and fees for marriage licenses, dog licenses, hunting permits and building permits. The Comptroller said the funds stolen were used by Clerk "to support her personal lifestyle, including trips to casinos and gambling websites."

Comptroller DiNapoli opined that “[w]hen a public servant steals taxpayer funds, it damages the public’s trust in government.” "A public office is a public trust and regrettably this town clerk acted contrary to their oath,” said Yates County Sheriff Spike. “I thank all involved in this criminal investigation, prosecution, and conviction, especially the New York State Comptroller’s office for their forensic work.”

Such misconduct by a public officer is referred to as "Jobbery" -- using one's public office or position of trust for ones' personal gain or advantage. Having taken advantage of the trust placed in her, Clerk will pay $26,729 in restitution as part of her plea agreement, of which she has already paid $20,000. 

Click HEREto access the full text of the Comptroller's statement.

###

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at, investigations@osc.ny.gov, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236.

 

Establishing a prima facie case of unlawful discrimination

In Joseph v. Leavitt, 465 F.3d 87, the United States Circuit Court of Appeal held that "A plaintiff sustains an adverse employment action if he or she endures a materially adverse change in the terms and conditions of employment."

In the instant case, the Circuit Court indicated that only certain prongs of Plaintiff's prima facie case were in dispute, i.e., the extent to which Plaintiff suffered the alleged adverse employment action or actions and whether those actions occurred under circumstances that give rise to an inference of discrimination. Here, said the court, Plaintiff's employment was terminated, "which itself is, of course, an adverse employment action."

Noting that there were factual issues regarding whether the New York Police Department's [NYPD] investigating personnel's pre-termination conduct constituted an adverse employment action, the Circuit Court opined that "[v]iewing the evidence in a light most favorable to Plaintiff, a reasonable juror could infer that the investigators' consulted with certain NYPD units "not because of information linking [the Plaintiff to] terrorism but because of [Plaintiff's] national origin, ancestry, or religion. Further, the court indicated that under the circumstances, "[a] reasonable juror could also infer that, after the ... investigator did so, it resulted in a more searching investigation and harsher discipline than had [the NYPD] applied its standard investigative and disciplinary procedures.

The Circuit Court also concluded that Plaintiff presented sufficient evidence to raise a triable issue of fact as to whether the investigation and termination occurred giving rise to an inference of discrimination, i.e., statements made by NYPD personnel in which "they noted [Plaintiff's] national origin (Egyptian) and his ancestry (Middle Eastern) while investigating his alleged misconduct." Further, the decision states that Plaintiff had set forth evidence that NYPD launched an investigation into Plaintiff and his family involving the NYPD personnel, which, arguably, "was a departure" from the NYPD's normal investigative procedures.

Accordingly, the Circuit Court concluded that Plaintiff provided "admissible evidence sufficient to permit a rational finder of fact to infer a discriminatory motive" and Plaintiff's factual claims under the New York City Human Right Law must be analyzed "more liberally" than his federal discrimination claims.

Considering the fact that Plaintiff advanced sufficient facts to carry the heavier burden of establishing his federal claims, the Circuit Court said it had "no trouble concluding that he set forth sufficient facts to carry the lesser burden on his city claims," and remand the matter to the federal district court "for further proceedings consistent with this order." 

Click HEREto access the Second Circuit's decision.

Determining legislative intent in interpreting a statute

In a consolidated proceeding pursuant to Election Law Article 16, petitioners [Plaintiffs] sought judicial review a determination of the Suffolk County Board of Elections denying Plaintiffs' objections to a petition designating Kate M. Browning as a candidate in a primary election and sought a court order to compel the Suffolk County Board of Elections to remove Ms. Browning's name from the ballot in that primary election and other relief.

Supreme Court granted Plaintiffs' petition and issued a "final order" compelling the Suffolk County Board of Elections to remove Ms. Browning's name from the ballot. Supreme Court had concluded that Ms. Browning was ineligible to serve as a Suffolk County Legislator as a term limits provision in the Suffolk County Charter*  provided that "[n]o person shall serve as a County Legislator for more than 12 consecutive years".

Ms. Browning appealed and the Appellate Division reversed the lower court's ruling "on the law."

The Appellate Division, noting that "[T]he plain language of the statute ... is the clearest indication of legislative intent," opined that Article II, §C2-5[B] does not expressly impose any total or lifetime term limit. Rather, said the court, "the plain language of the provision only prohibits a County Legislator from serving more than 12 consecutive years." Citing Andryeyeva v New York Health Care, Inc., 33 NY3d 152, the Appellate Division said that in construing a statute, "words must be 'harmonize[d]' and read together to avoid surplusage."**

Accordingly, the court declared that the provision set out in the County Charter relied upon by Petitioners seeking the removal of Ms. Browning's name from the ballot in the primary election "should not be interpreted as prohibiting an individual who has previously served as a County Legislator for 12 consecutive years from thereafter seeking a new term in that office, so long as the new term sought is not consecutive to the preceding term."

Thus, said the Appellate Division, Supreme Court should have denied the Plaintiffs' petitions and dismissed the proceeding.

* See Article II, §C2-5[B].

** Courts should not interpret any statutory provision in a way that would render it or another part of the statute inoperative or redundant. 

Click HERE to access the Appellate Division's decision.

A request for reconsideration of a final administrative determination does not extend or toll the running of the statute of limitations

The Petitioner [Plaintiff], a retiree, in this CPLR Article 78 challenged the appointing authority's [Town] decision denying his request to change his health insurance provider. The Town moved to dismiss Plaintiff's action, contending that it was untimely.

Supreme Court granted Town's motion for summary judgment and, in effect, dismissed the proceeding. Petitioner appealed but the Appellate Division affirmed the lower court's ruling, with costs.

In affirming the lower court's ruling, the Appellate Division:

1. Noted that an Article 78 proceeding must be commenced within four months after the administrative determination sought to be reviewed becomes final and binding upon the petitioner;

2. Explained that an administrative determination "becomes final and binding when 'the agency ... reache[s] a definitive position on the issue that inflicts actual, concrete injury and ... the injury inflicted may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party'";

3. Pointed out that the party seeking to assert the statute of limitations as a defense has the burden of establishing that the petitioner was notified of the determination more than four months before the proceeding was commenced; and

4. Observed that "... a request for reconsideration of an administrative determination does not extend or toll the statute of limitations or render the otherwise final determination non-final unless the agency's rules mandate reconsideration."

Here, said the court, the Town's determination denying Plaintiff's request to change his health insurance provider became final and binding no later than February 8, when the Plaintiff received notice of the denial by telephone and email. Accordingly, the Appellate Division concluded that Plaintiff's petition, filed in September, was untimely.

Click HERE to access the Appellate Division's ruling.