Audits and reports issued during the week ending September 24, 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 September 24, 2021 

Click on the text highlighted in color to access the complete audit report.

MUNICIPAL AUDITS

Town of Amherst Industrial Development Agency – Project Approval and Monitoring (Erie County) The board did not properly approve and monitor projects. Auditors determined the board did not ensure its project approvals were based on project applications that were completed and supported with applicable supplemental documentation and an adequate cost-benefit analysis. The board and officials also did not properly monitor to ensure the annual report filed with the New York State Authorities Budget Office and the Office of the State Comptroller was accurate with respect to job performance, sales tax exemptions and payment in lieu of taxes (PILOT) information for current and active projects.

 

Town of Berne – Board Oversight (Albany County) The board did not provide adequate oversight of financial operations and exceeded its authority under New York State Town law by authorizing the supervisor to pay all expenditures without prior audit. The board did not request or receive adequate monthly reports from the supervisor. For example, the board did not request or receive monthly cash reports detailing money received and disbursed, monthly bank reconciliations or cash balances for each fund. The board also did not ensure bank reconciliations were accurate, timely, and properly reviewed.

 

Town of Boylston – Financial Condition (Oswego County) The board did not effectively manage the town’s financial condition. As a result, it levied more taxes than necessary to sustain operations. The board also did not adopt realistic budgets and failed to monitor budgetary results during the year. In addition, the board allowed excessive levels of surplus funds to increase. As of December 31, 2020, the general fund’s surplus funds were $134,448, or 89% of actual expenditures. In addition, the highway fund’s surplus funds were $386,162, or 84% of actual expenditures. The board diminished financial transparency by annually appropriating fund balance that was not needed to fund operations.

 

Town of Clarence Industrial Development Agency (CIDA) – Project Approval and Monitoring (Erie County) The board did not properly approve or monitor its projects. The board also did not verify job creation goals or other criteria while assessing material aspects of the proposed projects prior to approving them. The board did not properly monitor projects to determine whether project goals were being met. Officials did not ensure that project approvals were transparent to the public by posting required documents on CIDA’s website. In addition, the board and officials did not ensure that CIDA’s annual report was accurate before submitting it to state oversight agencies.

 

Village of Clayton – Claims Auditing (Jefferson County) The board did not properly audit claims prior to payment or ensure written quotes were obtained as required. The board reviewed listings of claims but generally did not review them before approving payments. Health insurance claims totaling $495,104 were not approved for payment by the board, and claims totaling $52,000 to the local Chamber of Commerce did not include receipts as required. Of the purchases totaling $239,411 from 34 vendors auditors examined, village officials purchased goods and services totaling $141,269 from 27 vendors without obtaining written quotes or retaining supporting documentation of their solicitation efforts or justifications for not seeking competition, as required. The village’s procurement policy did not comply with New York State General Municipal Law. 

 

City of Cortland – Non-Contractual (NC) Employees’ Payroll Benefits (Cortland County) Two OSC audits issued in 2010 found NC employees received benefits inconsistent with Council approvals. Most of the prior control weaknesses remain and the council still has not established specific leave benefits of NC employees. As a result, auditors found seven NC employees earned 2,213 more hours of leave than employees in the collective bargaining agreements, valued at $110,500. Four NC employees were paid for 265 more hours of unused vacation leave than limits established for employees in the collective bargaining agreements, valued at $13,700. The mayor did not require department heads to track their time worked or to submit leave requests for taking time off, and the council did not approve all leave drawdown payments. 

 

Town of Hempstead – Compensatory Time (Nassau County)Town officials did not ensure comp time hours were accurately accrued and accounted for. As a result, officials do not have adequate assurance that all comp time is appropriately earned, accurately recorded and properly monitored. Town officials did not establish a policy or written procedures to ensure that comp time hours were authorized, documented and accounted for. Town officials also did not require comp time to be properly supported and approved by direct supervisors. In addition, town officials did not ensure separation payments that included a payment for unused comp time were supported. 

 

Town of Hempstead Local Development Corporation (THLDC) – Project Approval and Oversight (Nassau County) While the board properly approved and monitored projects in accordance with standard project procedures, it did not set clear and specific goals when approving projects. The board issued a total of $96.6 million of tax-exempt bonds and $1.8 million of taxable bonds during the audit period. However, THLDC officials cannot determine whether projects are meeting the intended purpose because the goals of the projects are not clearly defined in the authorizing resolutions.

 

Livonia Joint Fire District – Fire Truck Funding and Purchase (Livingston County) The board was not transparent when funding and purchasing fire apparatus. The board levied more taxes than necessary to finance annual operations and its actions hindered taxpayers’ ability to make informed decisions. The board also overestimated appropriations to accumulate more than $1.1 million in fund balance to purchase a fire truck costing more than $727,000, instead of establishing a capital reserve.

In addition, the board did not adopt fund balance, reserve or budgeting policies, along with multiyear financial and capital plans. 

 

Town of Randolph – Justice Court Operations (Cattaraugus County) The justice accurately recorded, deposited, disbursed and reported fines and fees in a timely manner. However, the justice did not ensure computerized case records were updated in an accurate and timely manner or that all closed cases were properly reported to appropriate state agencies.

SCHOOL DISTRICT AUDITS

Granville Central School District – Medicaid Reimbursements (Washington County) The district did not maximize Medicaid reimbursements by claiming for all eligible Medicaid services provided. The district also lacked adequate procedures to ensure Medicaid claims were submitted and reimbursed. Claims were not submitted for 465 eligible services totaling $18,022. Had these services been claimed, the district would have realized revenues totaling $9,011, from 50% reimbursement of eligible costs.

 

Mineola Union Free School District – Financial Condition Management (Nassau County) The board and district officials did not effectively manage the district’s financial condition. As a result, more taxes were levied than were needed to fund operations. A pattern of over budgeting developed because the board did not adjust ensuing years’ budgets based on prior years’ actual results. Therefore, general fund appropriations were consistently overestimated from 2016-17 through 2019-20 by a total of $20.7 million. Over the four-year audit period, the board consistently appropriated fund balance totaling $12.9 million that was not needed.

 

Penn Yan Central School District – Network Access Controls (Ontario County, Steuben County and Yates County) District officials did not ensure that the district’s network access controls were secure. Officials did not regularly review network user accounts and permissions to determine whether they were appropriate or needed to be disabled. As a result, auditors identified 1,094 unneeded user accounts and six user accounts with unnecessary administrator permissions. District officials also did not enter into a service level agreement with the district’s information technology (IT) service provider to clearly identify the provider’s responsibilities and services to be provided. In addition, sensitive IT control weaknesses were communicated confidentially to officials.

 

St. Regis Falls Central School District – Medicaid Reimbursements (Franklin County and St. Lawrence County) The district did not maximize Medicaid reimbursements by submitting claims for all eligible Medicaid services provided. The district also lacked adequate procedures to ensure Medicaid claims were submitted and reimbursed. Claims were not submitted for 381 eligible services totaling $23,060. Had these services been claimed, the district would have realized revenues totaling $11,530 or 50% of the reimbursement.

OTHER REPORTS

Former Village of Chatham Clerk-Treasurer Pleads Guilty to Defrauding Village

New York State Comptroller Thomas P. DiNapoli, Columbia County District Attorney Paul Czajka, and the New York State Police announced that Barbara Henry, the Village of Chatham’s former clerk-treasurer, has pleaded guilty to attempted official misconduct for unlawfully waiving her own health insurance premiums at the town’s expense.

“Ms. Henry took advantage of her public position to have the taxpayers fully fund her insurance costs,” said DiNapoli. “This kind of corruption drives up costs and erodes the public trust. Those who abuse the system will be caught and brought to justice. I thank District Attorney Paul Czajka and the New York State Police for their partnership in safeguarding public funds.”

“On behalf of the citizens and taxpayers of Chatham and Columbia County, I thank Comptroller Thomas DiNapoli, Chief Joseph Fiore and their team of investigators and auditors, as well as Sr. Inv. Eric Barnes and his State Police investigators,” DA Czajka said. “In particular, I commend Comptroller’s Investigator Candace Burnham, State Police Investigator Mathew Reilly and Deputy Chief ADA Ryan Carty for their hard work and dedication in this complex investigation. I strongly believe that, if there is one arm of state government that pays for itself by discovering financial misdeeds and deterring thefts, it is this investigative unit of the Comptroller’s office. I also note that Mayor John Howe, although not in office while the crimes were committed, took the lead in ensuring that all village employees cooperated fully.”

Henry, 59, of Chatham paid $3,586 in restitution for scamming the village health insurance premiums and stealing from her other employer Cadmus Lifesharing Association, a nonprofit organization based out of Massachusetts.

The joint investigation found that from April 2017 to August 2018, Henry used her position to unlawfully waive her own health insurance premiums, causing the village to pay Henry’s portion of health insurance. Henry was responsible for paying 50% of her health insurance while the village was responsible for the other 50%. Henry used her position to waive the cost to herself. She was employed by the village from late 2012 until she resigned in August of 2018.

Henry pleaded guilty before Judge J. Borgia-Forster in Chatham Town Court who also imposed a $250 fine in addition to the full restitution.

This is the second criminal conviction of a village official stemming from the joint investigation. In the first, and separate case, former Police Chief Peter Volkmann was sentenced on July 19, 2021 to pay nearly $93,000 in restitution after his felony guilty plea to grand larceny in the fourth degree.

 

Fiscal stress scores of municipalities reported by New York State's Comptroller

On September 22, 2021, New York State's Comptroller Thomas P. DiNapoli reported that thirty local governments in New York State ended 2020 in some form of fiscal stress. 

[Click on the text highlighted inBLUE below to access the full reports.]

The communities were identified by the Comptroller’s Fiscal Stress Monitoring System (FSMS). [In January 2021 the Comptroller issued fiscal stress scores for school districts and found 31 school districts in some level of fiscal stress.] .

The Comptroller releases fiscal stress scores on municipalities (excluding New York City) twice a year. The latest round of scores announced in September 22, 2021, identified 19 local governments  designated in fiscal stress, including six counties, four cities, and nine towns. This release is based on financial information of local governments operating on a calendar year basis (Jan. 1 – Dec. 31) for 2020 and covers all counties and towns, 44 cities, and 10 villages. In April 2021 DiNapoli announced that 11 local governments with non-calendar fiscal yearswere in stress.

“New York’s local governments have overcome some major fiscal hurdles during the COVID-19 pandemic,” Comptroller DiNapoli said, explaining that "Federal assistance, the restoration of state aid and resurging revenue have provided them much needed relief." However, cautioned the Comptroller, those designated as stressed are less likely to have the flexibility to adapt to fiscal challenges long term, noting that "local officials must budget and plan carefully to avoid fiscal stress and manage their communities through the uncertainties created by the pandemic.” 

In this latest round, the city of Poughkeepsie (fiscal stress score of 78.3), the city of Niagara Falls (72.1), and the town of Caneadea (65.4) are in the highest-ranking designation of “significant stress.”  The counties of Suffolk and Westchester, the city of Glen Cove and the town of Yates were in “moderate stress.”

Those designated as being “susceptible to fiscal stress” are the counties of Broome, Monroe, Nassau and Oneida, the towns of Centerville, Clarkstown, Colonie, Fort Covington, Pulteney, Sherman and Southport, and the city of Albany.

Of the 30 total governments in a fiscal stress designation for 2020, 17 were also in some form of fiscal stress in 2019. Four cities that were in “significant fiscal stress” in both years are Niagara Falls, Poughkeepsie, Amsterdam and Long Beach.

The Comptroller’s Fiscal Stress Monitoring System was implemented in 2013 to keep the public informed about the factors impacting local governments’ financial health. The system evaluates local governments on financial indicators including year-end fund balance, cash-on-hand, short-term borrowing, fixed costs and patterns of operating deficits and creates fiscal stress scores.

The system also evaluates information such as population trends, poverty and unemployment in order to establish a separate “environmental” score for each municipality which can be used to help describe the context in which these local governments operate.

The Comptroller’s report also found:

• In response to COVID-19, many local officials made difficult mid-year 2020 budget decisions about how best to meet their community’s service needs with reduced or less predictable revenues, while protecting public health and minimizing cuts to their own workforce.
• Rebounding monthly sales tax collections in much of the state supported local governments’ bottom lines, with many counties outside of New York City seeing only slight losses for 2020 overall compared with 2019, and collections in some counties even growing for the year.
• 173 local governments did not receive a fiscal stress score for fiscal year ending 2020. The vast majority of these (169) did not file in time to be scored, including the cities of Beacon, Dunkirk, Ithaca, Johnstown, Little Falls, Mechanicville, Mount Vernon, Rensselaer and Salamanca; and Greene and Ontario counties.

Lists

Municipalities in Stress for Fiscal Year Ending 2020

Municipalities Who Did Not File or Designated Inconclusive

Excel Spreadsheet

Detailed List of All Municipalities in State and Fiscal Stress Scores

Report

Fiscal Stress Monitoring System Municipalities: Fiscal Year 2020 Results

School district directed to resume reimbursing its retirees' Medicare Part B surcharges

Pursuant to collective bargaining agreements [CBAs] between the School District [District] and the Congress of Teacher [Congress], an association representing district employees, the District agreed to provide health care benefits for active and retired employees and their spouses and dependents. 

Retired employees over age 65, however, were required to enroll in a Medicare Part B program [Part B] and the district reimbursed retirees the cost of Part B coverage.

Some retirees, based upon their household income, were subject to a surcharge in addition to the standard Part B premium. This surcharge was an income-related monthly adjustment amount and referred to as the "IRMAA". Prior to August 2018, the district reimbursed retirees for IRMAA surcharges in addition to their standard Medicare premium payments.

In response to the District's informing retirees that it would no longer reimburse them for IRMAA surcharges, certain retirees [Plaintiffs] commenced a CPLR article 78 proceeding seeking [1] a court order annulling the District's decision, contending that the District's discontinuing such reimbursements violated Chapter 729 of the Laws of 1994 (as amended by Chapter 22 of the Laws of 2007), the State's Retiree Health Insurance Moratorium Act [Act]* and [2] a court order reinstating the reimbursements.

The Supreme Court agreed that the District's discontinuation of its reimbursements of IRMAA surcharges violated the Act, granted the Plaintiff's petition, and directed the District to reinstate providing the reimbursement, plus making appropriate retroactive reimbursements. The District appealed.

Explaining that Act sets "a minimum baseline or 'floor' for retiree health benefits" which is "measured by the health benefits being received by active employees," the Appellate Division sustained the lower court's ruling. In other words, the Act does not permit an employer to whom the statute applies to provide its retirees with lesser health insurance benefits than it provides its active employees.

Citing Matter of Baker v Board of Educ., 29 AD3d 574, the Appellate Division opined that a school district may not diminish retirees' health insurance benefits unless it makes "a corresponding diminution in the health insurance benefits or contributions of active employees." 

In the words of the court, the purpose of the Act was to protect the rights of retirees who "are not represented in the collective bargaining process, [and] are powerless to stop unilateral depreciation or even elimination of health insurance benefits once the contract under which they retired has expired"**

It was undisputed both that the CBAs between the District and the Association did not address Part B or IRMAA reimbursements and that the district provided such reimbursements, even if, as it claims, it made such reimbursements inconsistently. 

The parties, said the court, conceded that the reimbursements were "retiree health insurance benefits that were voluntarily conferred as a matter of school district policy." Accordingly, the Appellate Division held that Supreme Court "correctly concluded that the discontinuation of IRMAA reimbursements was a matter subject to the moratorium statute."

Additionally, the Appellate Division noted reimbursing retirees for Medicare Part B premiums is not an improper gift of public funds in violation of Article VIII, §1, of the New York State Constitution," citing Baker v Board of Education, 29 AD3d 574.

The Appellate Division sustained the Supreme Court ruling, finding it to have correctly determined that the District's discontinuation of IRMAA reimbursements violated the Act and thus had properly granted the Plaintiffs' petition.

* The purpose of the moratorium statute was to tie retiree benefits to active employee benefits so that retirees could benefit from the collective bargaining power of the active employees.

** See Matter of Bryant v Board of Educ., Chenango Forks Cent. School Dist., 21 AD3d 1134, quoting Assembly Memorandum in Support of Bill, 1996 McKinney's Session Laws of New York at 2050.

Click HERE to access the Appellate Division's decision.

Fraudulent letter scheme impersonating New York State's Secretary of State reported

On September 21, 2021, the New York State Department of State and the Division of Consumer Protection issued a press release warning of a fraudulent letter scheme claiming the recipient is entitled to receive a large payment being held by the Department of State to settle debts relating to the sale of timeshares.

The scheme, which uses a forged signature of New York Secretary of State Rossana Rosado and the New York State seal, has been referred to the New York State Attorney General for investigation. Anyone who has received this or a similar letter is asked to contact the New York State Attorney General’s Real Estate Enforcement Unit, New York State Office of the Attorney General, 28 Liberty Street, New York, NY 10005.

To help protect against these types of scams, the Division of Consumer Protection  recommends the following:

1. Exercise caution with all communications you receive, including those that appear to be from a trusted entity.

2. Inspect the sender’s information to confirm the message was generated from a legitimate source – be suspicious if the reply to address is different from the sending address.

3. Independently verify the entity’s contact information through an online search engine.

4. Consider calling the sender at a known good number, not listed within the communication, to confirm they sent the communication.

For more consumer protection information, call the Division of Consumer ProtectionHelpline at 800-697-1220, Monday through Friday, 8:30am-4:30pm or visit the Division of Consumer Protection website at https://dos.ny.gov/consumer-protection. 

The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer

 

Applying the Doctrine of Judicial Estoppel

In its decision in 12 New St., LLC v National Wine & Spirits, Inc., 196 3d 883, the Appellate Division, Third Department, said its "longstanding doctrine of judicial estoppel has been succinctly stated as follows: 

Where a party assumes a position in one legal [action or] proceeding and succeeds in maintaining that position, that party may not subsequently assume a contrary position in a second [action or] proceeding because its interests have changed. 

In order for the doctrine of judicial estoppel to apply, there must be a showing that the party taking the inconsistent position had benefited from the determination in the prior action or proceeding based upon the position it advanced there and "For the doctrine to apply, there must be a final determination endorsing the party's inconsistent position in the prior proceeding."

Click HERE to access the Appellate Division's decision in 12 New Street, LLC.

Also, click HERE  to access Matter of Roberts v New York City Office of Collective Bargaining, 2010 NY Slip Op 32953(U), [Not selected for publication in the Official Reports].

ABOUT A TEACHER

ABOUT A TEACHER is an intimate film, filmed by some of the educator's former students, candidly takes the viewer through the personal journey of a new New York City inner-city public high school film teacher. 

Inspired by the filmmaker’s real-life experiences as an inner-city high school film teacher, Hanan (played by Dov Tiefenbach) enters the profession oblivious to the actual demands of teaching, and unaware of his own shortcomings and biases. 

Click HERE for more information about this realistic film.

Audits and reports issued during the week ending September 18, 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 September 18, 2021

Office of Alcoholism and Substance Abuse Services: Oversight of Contract Expenditures of Palladia Inc. (2020-S-5) In 2014, OASAS entered into a five-year $45.6 million contract with Palladia, under which Palladia would provide drug and addiction treatment services. Auditors found OASAS is not effectively monitoring the expenses reported by Palladia to ensure that reimbursed claims are allowable, supported and program related. For the three fiscal years ended June 30, 2018, auditors identified $2,508,682 in costs that did not comply with the requirements for reimbursement. 

Office of Children and Family Services (OCFS): Oversight of Direct Placement of Children (Follow-Up) (2021-F-6) An audit issued in March 2020 found that OCFS did not maintain adequate oversight of direct placement to ensure that Local Departments of Social Service (Local Districts) comply with applicable laws and regulations and that children are placed in safe environments. OCFS also had not developed the same type of centralized standards, policies, or procedures for Local Districts to follow in supervising all direct placement cases as it has for similar child welfare services, such as foster care. In a follow-up, auditors determined OCFS officials have made limited progress in addressing the issues identified in the initial report. 

Office of General Services (OGS): Compliance with Executive Order 95 (Open Data) (Follow-Up) (2021-F-12) An audit released in April 2020 found OGS had taken steps to meet the requirements of EO 95; however, certain aspects of the order were not fully addressed. OGS did not identify the total population of publishable state data that it maintains. Therefore, there was limited assurance OGS provided a complete catalogue of its publishable state data or accompanying schedules for making that data public, as required. In a follow-up, auditors found OGS made limited progress in addressing the problems identified in the initial audit report. 

Department of Health (DOH): Improper Fee-for-Service (FFS) Payments for Services Covered by Managed Long-Term Care (MLTC) Plans (Follow-Up) (2021-F-4) An audit issued in January 2020 identified $16.4 million in improper Medicaid FFS payments for MLTC covered services. Of these overpayments, $15.6 million was paid because DOH did not configure eMedNY payment system edits and MLTC benefit packages correctly, so eMedNY did not identify certain services as the responsibility of the MLTC plan. The remaining $877,000 was improperly paid because, at the time eMedNY adjudicated the claim, the recipient was not enrolled in MLTC, but was retroactively enrolled at a later date. In a follow-up, auditors found DOH made some progress in addressing the problems identified in the initial audit report; however, further actions are still needed.  

Homes and Community Renewal - Division of Housing and Community Renewal: Controls Over Federally Funded Programs and Maximization of Federal Funding (2020-S-48)Generally, the division has established controls to ensure the Weatherization Assistance Program meets federal reimbursement documentation requirements and that the division receives federal reimbursements on time and in a manner that recovers all funds. However, the division lost $120,475 in federal funding during the audit period because it was not expended by program deadlines, primarily due to a decrease in production caused by the COVID-19 pandemic. As of Dec. 31, 2020, the division had until March 31, 2022 to obligate and expend $10,925,486 or it will be returned to the U.S. Department of Energy. 

Public Service Commission (PSC): Enforcement of Commission Orders and Other Agreements (Follow-Up) (2021-F-5) An audit issued in March 2020 found PSC’s Department of Public Service does not always adequately monitor compliance with order conditions – and in some cases even lacks the equipment necessary to do so. Orders are, at times, ambiguous and lack time frames for completion, interim performance measures, and consequences for non-compliance, making enforcement difficult and inconsistent. In a follow-up, auditors found department officials made significant progress in addressing the issues identified in the initial audit report. 

Department of State: Compliance with Executive Order 95 (Open Data) (Follow-Up) (2021-F-11) An audit released in April 2020 found the department had generally complied with the requirements of EO 95, incorporating compliance with EO 95 into its core business functions and continued to identify new data sets to add to Open Data. However, the department did not identify the total population of publishable State data that it maintains. Additionally, the audit found some problems with the usability of some of the department’s data sets on Open Data. In a follow-up, auditors determined the department has made progress in addressing the problems identified in the initial audit report. 

Department of Taxation and Finance: Efforts to Collect Delinquent Taxes (2019-S-61) For a significant number of the delinquent tax assessments reviewed, auditors were unable to determine, based on documentation, that the department took adequate collection actions prior to completing or closing cases for one of the five collection steps tested: using applicable search tools to identify taxpayer resources that might be pursued to satisfy the debt. Auditors recommended the department improve documentation for each relevant assessment to affirm which actions are applicable and which actions staff take in their collection activities; and take steps to ensure compliance with policies and procedures that address abatement decisions, and, when needed, document the rationale for decisions.

Judicial review of decisions involving the placement of a position in the classified service in the exempt class or the noncompitive class

The New York State Department of Financial Services [DFS] asked the Civil Service Commission [Commission] to jurisdictionally classify the titles of Director, Financial Services Programs 1 and 2, positions in the noncompetitive class with a "policy-influencing" designation pursuant to §42[2-a] of the Civil Service Law.*

DFS also sought to have certain vacant noncompetitive investigative positions given "title changes" to the titles of Investigator 1 and Assistant Chief Investigator [Investigator Positions] and, further, jurisdictionally reclassified as positions in the exempt class.

The Public Employees Federation, AFL-CIO [PEF] objected to these title and jurisdictional classification changes** but the Commission ultimately approved the changes as requested by DFS. PEF then initiated a CPLR Article 78 proceeding seeking a court review of the Commission's determination contending that its determinations were "arbitrary and capricious and contrary to law." Supreme Court dismissed PEF's application, ruling that the Commission's determinations were rational. PEF appealed the court's decision.

The Appellate Division, noting that to prevail PEF bore the burden of demonstrating that the Commission "erred in its job classification determinations," said that decisions of the Commission are "subject to limited judicial review and will not be disturbed absent a showing that [they were] wholly arbitrary or without a rational basis", citing Cove v Sise, 71 NY2d 910.

Explaining that it is "well-settled [s]tate policy that appointments and promotions within the civil service system must be merit-based and, when 'practicable,' determined by competitive examination," as mandated by Article V §6 of the State Constitution, opined that "[t]he constitutional dictate does not create an absolute bar to civil service appointments and promotions without competitive examinations."

Citing a number of decisions by New York State courts, the Appellate Division noted the Commission may place a title in the noncompetitive class based on its finding that "it is impracticable to determine merit and fitness for the berth by competitive examination." Focusing on the DFS' requests with respect to the director titles, the court opined that the fact that "the director positions have some overlapping responsibilities with other competitively-tested positions does not preclude a finding that competitive examination is impracticable" for the DFS positions in issue.

As to the investigator positions in issue, the Appellate Division observed that the Commission's determination to place the investigator positions in the exempt jurisdictional class also had a rational basis, explaining that a position may be jurisdictionally classified as exempt based on findings as to "the confidential nature of the position, the performance of duties which require the exercise of authority or discretion at a high level or the need for the appointee to have some expertise or personal qualities which cannot be measured by a competitive examination."

* Subdivision 2-a provides as follows: "The state or municipal civil service commission by appropriate amendments to its rules shall designate among positions in the non-competitive class in its jurisdiction those positions which are confidential or require the performance of functions influencing policy."

** All positions in the classified service are automatically in the competitive class unless placed in a different jurisdictional classification by the responsible civil service commission or personnel officer or by statute.

Click HERE to access the full text of the Appellate Division's decision.

Another case of Jobbery, i.e., the practice of using a public office or position of trust for one's own gain or advantage

On September 16, 2021, State Comptroller Thomas P. DiNapoli, Madison County District Attorney William Gabor, and New York State Police Superintendent Kevin P. Bruen announced that a former non-sworn state police mechanic has pleaded guilty to felony corrupting the government for the theft of more than $24,000 in auto parts and supplies from the state.

Charged with eight felony and three misdemeanor charges including corrupting the government, grand larceny and criminal possession of stolen property and official misconduct, the mechanic pleaded guilty to felony corrupting the government in the third degree and was sentenced to interim felony probation and has already paid back $20,000.

The arrest was a result of a joint investigation between the State Comptroller’s Office, the New York State Police and Madison County District Attorney William Gabor.

Requirements for stating a justiciable claim alleging the employer intentionally inflicted emotional distress on the distressed employee

The motion court denied the complaint's [Plaintiff] motion for leave to amend his complaint alleging unlawful employment retaliation in violation of Not-For-Profit Corporation Law §715-b by adding claims alleging "intentional infliction of emotional distress" among others.

Sustaining the Supreme Court's decision, the Appellate Division explained that to state a claim for intentional infliction of emotional distress in such an action a party must allege:

1. "extreme and outrageous conduct;

2. an "intent to cause, or disregard of a substantial probability of causing, severe emotional distress;

3. "a causal connection between the conduct and injury; and

4. "severe emotional distress."

Citing 164 Mulberry St. Corp. v Columbia Univ., 4 AD3d 49, the court said that "Whether the requisite 'outrageousness of the conduct' has been satisfied by the petitioner's allegations is, in the first instance, an issue of law for judicial determination."

In this instance, said the Appellate Division, although Plaintiff alleged, "in a conclusory fashion that the defendants [Respondents] engaged in a pattern of harassment that caused Plaintiff to suffer from anxiety and stress that eventually led to a serious cardiac event," it found that Plaintiff's allegations of abusive conduct directed at him in the context of his employment "do not rise to the level of outrageousness required to state a claim."

Further, opined the Appellate Division, Plaintiff's proposed amendment did not allege facts establishing that Plaintiff had an "imminent apprehension of harmful or offensive contact" to support a claim for assault.

The Appellate Division also addressed a "new claim for standard negligence" in the proposed amended complaint and opined that it "fails to allege with the requisite specificity that the [Respondent] board members acted with gross negligence in the training and supervision of [Plaintiff's supervisor] nor did Plaintiff present any specific allegations that the [Respondent] board members "acted intentionally."

Accordingly, the court found that Plaintiff's negligence claim was barred by the qualified immunity defense available to uncompensated board members under §720-a of the Not-For-Profit Corporation Law.

Click HERE to access the Appellate Division's decision

Appealing the termination of a probationary teacher

In this appeal to the New York State Commissioner of Education a probationary teacher [Petitioner] challenged her termination from her position with the New York City Department of Education's [DOE]. 

The Commissioner sustained DOE's termination of the Petitioner, observing that "[e]ven if the appeal were not dismissed as untimely, it would be dismissed on the merits."

The Commissioner explained that pursuant to its authority under Education Law §2573(1)(a), DOE may discontinue the services of a probationary teacher “at any time and for any reason, unless the teacher establishes that the termination was for a constitutionally impermissible purpose, violative of a statute, or done in bad faith,” citing Matter of Frasier v Board of Educ. of City School Dist. of City of N.Y., 71 NY2d 763.

Further, the Commissioner's decision notes that the petitioner has the burden of:

[1] demonstrating a clear legal right to the relief requested; and 

[2] establishing the facts upon which he or she seeks relief in his or her appeal to the Commissioner of Education.

In this instance the Commissioner found that Petitioner has "neither alleged nor proven that her discontinuance was for a constitutionally impermissible reason or that it violated any statute."  Rather, said the Commissioner, Petitioner suggests that DOE acted in bad faith insofar as her discontinuance was the result of the principal’s personal animus toward her but offers no competent proof of this contention other than her own assertions.

DOE generally denied Petitioner’s allegations and submit numerous annual professional performance review [APPR] reports supporting their position that Petitioner’s discontinuance was based on the many “developing” and “ineffective” ratings that she received throughout the school years she served as a probationary teacher. 

Although Petitioner suggested that such feedback was insufficient and that her school administrators did not adequately address various challenges she faced during her probationary service, the Commissioner held that such assertions fail to render DOE's discontinuance of her probationary service impermissible.

Additionally, observed the Commissioner, Petitioner’s assertion that the APPR ratings she received lack a reasonable justification does not provide a basis to annul her discontinuance and reinstate her to a teaching position. 

The Commissioner's decision cited Education Law §3012-c, which section sets forth the procedures and requirements applicable to APPR ratings, provides that “nothing in this section shall be construed to affect the unfettered statutory right of a school district ... to terminate a probationary teacher ... for any statutorily and constitutionally permissible reason.” Accordingly, said the Commissioner, Petitioner’s objection to her APPR ratings is insufficient to establish her entitlement to the relief she requested. 

Addressing Petitioner's request the DOE be directed "to implement a regulation, policy, or procedure” requiring the superintendent to speak with a probationary teacher prior to discontinuance, the Commissioner said that Petitioner had failed to set forth an adequate basis for such relief.  

The Commissioner noted that the record reflected that Petitioner received ample notice that she may be discontinued from her position; that the superintendent’s initial letter invited Petitioner to submit a response; that Petitioner did, in fact, respond to the superintendent’s letter; and that the superintendent considered Petitioner’s response prior to rendering her final determination.  

Accordingly, the Commissioner said that she decline to compel DOE to implement a new procedure, beyond the requirements of Education Law §2573, obligating the superintendent to communicate with a probationary teacher in person or by telephone. 

Opining that Petitioner has failed to carry her burden of proving that DOE discontinued her probationary employment for a constitutionally impermissible purpose, in violation of a statute, or in bad faith, the Commissioner dismissed Petitioner's appeal.

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