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New York State Comptroller Thomas P. DiNapoli announced the following audits issued on September 16, 2022

New York State Comptroller Thomas P. DiNapoli announced the audits listed below for New York State and New York City Departments and Agencies were issued during the week ending September 16, 2022.

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

Department of Corrections and Community Supervision: Oversight of Transportation Services and Expenses (2021-S-1)
The department has not established adequate controls to effectively monitor and ensure accountability over transportation expenses and performs limited to no central monitoring of payments made through the contractor responsible for serving vehicles. Further, the contractor data does not include sufficient detail needed for the department to adequately monitor vehicle repairs and maintenance costs. Also, the department does not monitor in-house maintenance expenses but, rather, relies on each facility or office for accurate reporting.

Department of Health - Medicaid Program: Claims Processing Activity (2021-S-7)
The audit identified over $36.1 million in improper Medicaid payments. By the end of the audit fieldwork, about $5.5 million of the improper payments had been recovered. Auditors also identified seven providers in the Medicaid program who were charged with or found guilty of crimes that violated laws or regulations governing certain health care programs. By the end of the audit fieldwork, the department removed the providers from the Medicaid program.

Department of Health - Medicaid Program: Improper Managed Care Payments for Misclassified Patient Discharges (2021-S-8)
The audit identified 2,808 managed care inpatient claims totaling $32.3 million for Medicaid recipients who were reported as discharged from a hospital, but then admitted to a different hospital within the same day or the following day (which often meets the definition of a transfer). These claims are at a high risk of overpayment if the first hospital inappropriately reported an actual transfer as a discharge. The audit selected a judgmental sample of 166 claims totaling $2,474,162 from six hospitals and reviewed the associated patients’ medical records. Auditors found that 47 claims were overpaid because they were actually for transfers and not discharges and another 13 claims incorrectly billed as inpatient when they were for outpatient services.

New York City Department of Housing Preservation and Development: Heat and Hot Water Complaints (Follow-Up) (2022-F-3)
HPD officials have made some progress in correcting the problems identified in the initial report. Of the initial report’s eight recommendations, three were implemented, two were partially implemented, and three were not implemented.

Department of Health: Management of Indoor Air Quality for Individuals With Asthma (2020-S-59)
While the department, through its contracts with Local Health Departments (LHDs), has identified poor indoor environmental conditions that impact residents with asthma, it needs to improve its oversight and monitoring of LHDs to ensure that individuals identified with asthma in targeted areas continue to receive appropriate assistance.

New York State Liquor Authority: Internal Controls Over Selected Financial Operations (Follow-Up) (2022-F-12)
SLA has made progress addressing the problems identified in the initial audit report and has implemented the two recommendations from that report.

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Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.

Seeking a court order in the nature of a Writ of Prohibition

In two actions initiated by Raymond A. Tierney, District Attorney, Suffolk County, [Petitioner] pursuant to CPLR Article 78 in the nature of prohibition Petitioner sought an order prohibiting Chris Anne Kelley, a New York State Supreme Court Justice, Suffolk County [Respondent] from enforcing [1] an order dated July 23, 2021, issued in an action entitled People v Portillo, then pending before Justice Kelley [Indictment No. 179/20] and [2] a second order dated July 23, 2021, issued in an action entitled People v Prince, also then pending in Justice Kelley's court [Indictment No. 1064/19].

The writ of prohibition is one of number of the ancient “common law” writs and is issued by a higher tribunal to a lower tribunal to "prohibit" the adjudication of a matter then pending before the lower tribunal on the grounds that the lower tribunal "lacked jurisdiction."*

The Appellate Division dismissed both Article 78 actions "on the merits," without costs or disbursements.

Citing Matter of Holtzman v Goldman, 71 NY2d 564 and other cases, the Appellate Division explained that "[b]ecause of its extraordinary nature, prohibition is available only where there is a clear legal right, and then only when a court -- in cases where judicial authority is challenged -- acts or threatens to act either without jurisdiction or in excess of its authorized powers".

Further, said the court, "Petitioner has failed to demonstrate a clear legal right to the relief sought."

* Other such ancients writs include the writ of mandamus, granted by a court to compel an official to perform "acts that officials are duty-bound to perform;" the writ of injunction - a judicial order preventing a public official from performing an act; the writ of "certiorari," compelling a lower court to send its record of a case to the higher tribunal for review by the higher tribunal; and the writ of “quo warranto” [by what authority]. The Civil Practice Law and Rules sets out the modern equivalents of the surviving ancient writs.

Click HEREto access the decision in People v Portillo posted on the Internet.

Click HEREto access the decision in People v Prince posted on the Internet.

 

 

New York State Comptroller Thomas P. DiNapoli announced the following school district audits were issued Friday, September 9, 2022.

The following school district audits were issued during the week ending Friday, September 9, 2022.

Click on the text in COLOR to access the full text of the audit on the Internet. 

Batavia City School District – Information Technology Equipment Inventory (Genesee County)

District officials did not appropriately track and inventory IT equipment. They did not adopt a comprehensive written policy for establishing and maintaining IT equipment inventory or maintain a complete and accurate IT equipment inventory or perform an annual physical inventory. Officials could not locate 229 staff computers and 62 tablets and paid approximately $17,000 in annual service fees in the 2021-22 fiscal year for missing devices.

 

East Bloomfield Central School District – Network and Financial Software Access Controls (Ontario County)

District officials did not ensure that network and financial software access controls were adequate to protect district IT systems and data from unauthorized access or loss. Sensitive network and financial software access control weaknesses were communicated confidentially to officials. In addition, the district had 250 unneeded network user accounts, including two with administrative permissions, and the assistant superintendent for business and operations had excessive administrative permissions in the financial software, which allowed them to potentially control all phases of financial transactions. Officials paid BOCES $539,644 for information technology services in 2020-21 without defining roles and responsibilities for services. As a result, the roles and responsibilities of each party may not be understood by all parties resulting in cybersecurity gaps.

 

Indian River Central School District – Financial Condition Management (Lewis County)

While the board and district officials made some progress in implementing prior audit recommendations, they must continue to improve their financial condition management, otherwise more taxes will be levied than are needed to fund operations. From 2017-18 through 2020-21, the board underestimated general fund revenues by $68.8 million and overestimated appropriations by $29.5 million. Additionally, the district’s reported surplus fund balance as of June 30, 2021 was 10%, exceeding the statutory limit of 4%. When unused appropriated fund balance is added back, the recalculated surplus fund balance totals $27.8 million, exceeding the statutory limit by $24 million

.

Milford Central School District – Fund Balance Management (Otsego County)

The board and district officials did not properly manage fund balance in accordance with statute. As of June 30, 2021, surplus fund balance exceeded the 4% statutory limit by approximately $600,000, or 5.4 percentage points. When the projected unused appropriated fund balance of $720,000 is added back, the recalculated surplus fund balance exceeded the statutory limit by $1.3 million, or 11.9 percentage points. The board and district officials did not develop and adopt a written multiyear financial plan or fund balance policy.

 

Minisink Valley Central School District – Medicaid Reimbursements (Orange County)

The district did not maximize Medicaid reimbursements by claiming for all eligible Medicaid services provided. Claims were not submitted for reimbursement for at least 3,083 eligible services totaling $187,932. Had these services been claimed, the district would have realized revenues totaling $93,966 (50% of the Medicaid reimbursements). Between July 1, 2020 and Dec. 31, 2021, the district paid a third-party vendor $54,996 to process the district’s Medicaid claims. However, officials did not provide the vendor with all of the documentation needed for the vendor to properly file all Medicaid claims and did not adequately oversee the vendor to ensure Medicaid reimbursements were maximized.

 

Tuxedo Union Free School District – Payroll and Leave Accruals (Orange County)

District officials did not ensure employees’ payroll payments and leave accruals were accurate, properly approved and supported. District officials overpaid (or potentially overpaid) 30 employees a total of $113,564 in payroll and leave accrual payments, including $47,673 in overpayments to the Interim Superintendent. Thirty-six of the 104 full-time and part-time employees were not covered under a collective bargaining agreement, employment contract or board resolution. As a result, payroll staff were unable to interpret what benefits employees are entitled to receive and may be improperly providing benefits to employees.

 

Union Springs Central School District – Safeguarding of Personal, Private and Sensitive Information on Mobile Computing Devices (Cayuga County)

District officials did not adequately safeguard mobile computing devices (MCDs) to help prevent unauthorized access to sensitive information. Auditors also found that district officials did not establish sufficient procedures, such as establishing a district-wide data classification matrix and inventorying sensitive information in their possession, to help ensure proper safeguarding. Fourteen of the 20 district-owned MCDs auditors examined contained information that was not adequately safeguarded.

 

Wappingers Central School District – Professional Services (Dutchess County)

District officials did not always seek competition or comply with the district’s procurement policy when procuring professional services. District officials did not use competitive methods, as required to select 40 professional service providers who were paid more than $5.1 million during the audit period.

 

Worcester Central School District – Fund Balance Management (Otsego County)

The board and district officials did not effectively manage fund balance. The board annually overestimated appropriations from 2016-17 through 2020-21 by an average of $943,000, or 8%.

District officials budgeted for operating deficits totaling $4.7 million from 2016-17 through 2020-21, but experienced net operating surpluses totaling $1.2 million, an operational shift of $5.9 million. The district’s surplus fund balance exceeded the 4% statutory limit in each of the last five fiscal years by $490,000 to $1.8 million, or 4.3 to 15.7 percentage points. Real property tax levies were higher than necessary, in part, because surplus fund balance in excess of the statutory limit was maintained.

 

Wynantskill Union Free School District – Purchasing (Rensselaer County)

District officials could not always support that competition was sought when purchasing goods and services that fell below the statutory bidding thresholds. Officials did not develop clear guidance in procedures to seek competition for purchasing goods and services that were not required to be competitively bid. They also did not follow the district’s purchasing policy for 25 purchases  totaling $53,883, or adequately document they sought competition for 17 purchases totaling $27,231. Further, contract award and pricing information was lacking on seven purchases made through state contract vendors, and the district should have paid $1,028 less for three purchases.

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Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.  

County commissioner in New Mexico removed from office under color of Section 3 of the 14th Amendment to the Constitution of the United States

Section 3 of the Fourteenth Amendment to the Constitution of the United State provides as follows:

§3. "No person shall be a Senator or Representative in Congress, or elector of President and Vice President, or hold any office, civil or military, under the United States, or under any state, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any state legislature, or as an executive or judicial officer of any state, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability."

New Mexico's Albuquerque Journal reporter Ryan Boetel notes that a state judge in New Mexico removed a county commissioner found guilty of participating in the January 6, 2022 invasion of the Capitol of the United States in federal district court under color of said §3.

With respect to public officers of New York State and its political subdivisions, the State Attorney General has opined that a public officer appointed for fixed statutory term may be removed prior to the expiration of the term only for cause and is entitled to due process protection prior to dismissal [Opinions of the Attorney General 88-49]. In the event an individual is "not entitled to a hearing under Civil Service Law, §75 or any other statute," the Attorney General further observed "a hearing must derive from the due process clause of the Constitution (NY Const, Art 1, §6; US Const, 14th Amendment)."

The Attorney General explained that "... courts have held that a public employee threatened with dismissal is entitled to due process protections if he has acquired a liberty or property interest in his employment; that is, a legitimate entitlement to continued employment," citing Economico v Village of Pelham, 50 NY2d 120, Elrod v Burns, 427 US 347, and Board of Regents v Roth, 408 US 564. 

Opinions of the Attorney General 88-49 also notes "The U.S. Supreme Court has stated that the sufficiency of a claim of entitlement must be made by reference to appropriate State or local laws", citing Bishop v Wood, 426 US 341. 

Click HERE to access the full text of Mr. Boetel's article published in the Albuquerque Journal posted on the Internet.

 

School District's motion to dismiss the causes of action alleging a student was sexually molested by an employee of the school district denied

In this action to recover damages, the complainant [Plaintiff] alleged that he was sexually molested by his guidance counselor, who was an employee or special employee of the defendant [School District].  Supreme Court denied School District's motion to dismiss the causes of action alleging "negligence, gross negligence, negligent hiring, retention, supervision, and direction, and breach of fiduciary duty insofar as asserted." 

The School District appealed the Supreme Court's ruling.

Explaining that on a motion to dismiss for failure to state a cause of action under CPLR §3211(a)(7) the Appellate Division said that a court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" and denied School District's appeal.*

The amended complaint alleged, among other things, that the School District had prior notice of the guidance counselor's propensity to sexually molest students and that the School District "nevertheless permitted the guidance counselor to meet one-on-one with students, including the Plaintiff, and that the School District thereby negligently failed to prevent the guidance counselor from sexually molesting the Plaintiff."

Further, said the Appellate Division, Supreme Court properly found that the Plaintiff sufficiently pleaded causes of action alleging negligence, gross negligence, and negligent hiring, retention, supervision, and direction, citing Moskowitz v Masliansky, 198 AD3d 637 and other decisions.

* The Appellate Division noted "[c]auses of action alleging negligent hiring, negligent retention, or negligent supervision are not statutorily required to be pleaded with specificity".

Click HEREto access the Appellate Division's decision.

Government Technology Webinars scheduled to be held during the week ending September 3, 2022

Wednesday, August 31 | 1:00pm Eastern

Enhancing Voice and Digital Engagement with Communications Platform as a Service Solutions 

The ability to reach and respond to constituents and students where they are, on whatever device they’re using, in real time is a differentiating factor that elevates the engagement experience for state and local government and education. Communications Platform as a Service (CPaaS) solutions help agencies build upon their existing applications to create access to all the popular communication methods the public wants to use. Join us for a 30-minute webinar on how organizations can use CPaaS solutions to integrate new communications tools into their workflow quickly and easily.

Click here to Register to attend 

 

Wednesday, August 31 | 2:00pm Eastern

Heightened Visibility is Key to Efficient Threat Detection and Risk Mitigation 

Local and state governments must constantly reevaluate their security strategies to ensure they’re up to the task of combatting today’s evolving threat landscape. Recent survey results demonstrate what agencies are most concerned about and what they are doing to mitigate risks. To unpack the results of the latest research, register to reserve your spot!

Click here to Register to attend 

 

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.

Application to remove an individual serving as "trustee and president" of the school board

An applicant sought to have the Commissioner of Education remove the President of the school board for a number of reasons including "consistently arguing with parents at almost every [board] meeting” and for "abstaining from a school board vote."

Commissioner Rosa dismissed the appeal for two procedural reasons. 

First Dr. Rosa ruled that the application must be dismissed for improper service.

§275.8(a) of the Commissioner’s regulations requires that the petition be personally served upon each named respondent. In this instance the Commissioner found that the record indicates that Petitioner failed to properly serve the petition upon the President, who is the sole respondent in the application but left the petition with a “receptionist” at the school board’s district office whom the Petitioner knew to be “responsible for receiving district mail.” §275.8(a), however, of the Commissioner’s regulations applicable to removal proceedings pursuant to Commissioner’s regulation §277.1, requires that the petition be personally served upon each named respondent. 

The President contended that she was never personally served with a copy of the petition and Petitioner did not challenge this contention.  Accordingly the Commissioner ruled that the petition "must be dismissed for improper service," citing Decision of the Commissioner of Education No. 17,391. 

In addition Dr. Rosa held that the application must be dismissed for lack of the specialized notice required by §277.1 (b) of the Commissioner’s regulations. This regulation, said the Commissioner, sets out "the specific notice required for removal applications pursuant to Education Law §306, which is distinct from the notice required under §275.11(a) for appeals pursuant to Education Law §310."

The Commissioner explained that the notice of petition "secures jurisdiction over the intended respondent and alerts the respondent that he or she must appear in the removal proceeding and answer the allegations contained in the application." Accordingly, the Commissioner held that such situations "a removal application that does not include the specific notice required by 8 NYCRR 277.1(b) is fatally defective and must be denied."

Click HEREto access the text of the Commissioner's decision.

Tax Information for Federal, State and Local Governments

Internal Revenue Service [IRS] increases mileage rate for remainder of 2022 

The IRS announced an increase in the optional standard mileage rate for the final 6 months of 2022 in recognition of recent gasoline price increases. Taxpayers may use the optional standard mileage rates to calculate the deductible costs of operating an automobile for business and certain other purposes, effective July 1, 2022. 

 

2023 inflation adjusted amounts for Health Savings Accounts 

Revenue Procedure 2022-24 provides the 2023 inflation adjusted amounts for Health Savings Accounts (HSAs) as determined under Section 223 of the Internal Revenue Code and the maximum amount that may be made newly available for excepted benefit health reimbursement arrangements (HRAs) provided under Section 54.9831-1(c)(3)(viii) of the Pension Excise Tax Regulations.

For calendar year 2023, the annual limitation on deductions for:

Individual with self-only coverage under a high deductible health plan is $3,850;

Individual with family coverage under a high deductible health plan is $7,750.

 

Election workers: Reporting and withholding

Each election year, thousands of state and local government entities hire workers to conduct primary and general elections. To understand the correct tax treatment of these workers, employers need to be aware of specific statutes that apply to them as well as whether they are covered by a Section 218 Agreement.

Who are election workers? Election workers are individuals hired by government entities to perform services at polling places in connection with national, state and local elections. An election worker may be referred to by other terms and titles, for example, poll worker, moderator, machine tender, checker, ballot clerk, voting official, polling place manager, absentee ballot counter or deputy head moderator. These workers may be employed by the government entity exclusively for election work or may work in other capacities as well.

Compensation paid to election workers is includible as wage income for income tax purposes and may be treated as wages for Social Security and Medicare (FICA) tax purposes.

Election workers may be compensated by a set fee per day or a stipend for the election period. The election period may include attending training or meetings prior to and after the election. Election workers may also be reimbursed for their mileage or other expenses. To be excludable from wages, expense reimbursements must be made under an accountable plan.

For more Information see Election Workers: Reporting and Withholding.

 

 

 

Audits and reports issued by the New York State Comptroller during the week ending August 19, 2022

New York State Comptroller Thomas P. DiNapoli announced the audits listed below for School Districts and Municipalities issued during the week ending August 19, 2022

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

School District

Indian River Central School District – Financial Condition Management (2022M-92) The Board and District officials did not adequately manage the District’s financial condition and the current findings and recommendations are similar to our November 2016 Financial Condition audit report. While the Board and officials made some progress in implementing the prior audit recommendations, they must continue to improve their management of financial condition, otherwise more taxes will be levied than are needed to fund operations.

Click here to read complete report - pdf

 

Minisink Valley Central School District did not maximized Medicaid reimbursements -- The District did not maximize Medicaid reimbursements by claiming for all eligible Medicaid services provided.

• Claims were not submitted for reimbursement for at least 3,083 eligible services totaling $187,932. Had these services been claimed, the District would have realized revenues totaling $93,966 (50 percent of the Medicaid reimbursements).
  
• Between July 1, 2020 and December 31, 2021, the District paid a third-party vendor (vendor) $54,996 to process the District’s Medicaid claims. However, officials did not provide the vendor with all of the documentation needed for the vendor to properly file all Medicaid claims and did not adequately oversee the vendor to ensure Medicaid reimbursements were maximized.

Click here to read complete report - pdf

Wynantskill Union Free School District – Purchasing (2022M-85)

District officials could not always support competition was sought when purchasing goods and services that fell below the statutory bidding thresholds. Officials did not:

• Develop clear guidance in procedures to seek competition for purchasing goods and services that were not required to be competitively bid.
• Follow the District’s purchasing policy for 25 purchases (83 percent) totaling $53,883.
• Adequately document they sought competition for 17 purchases totaling $27,231. Further, contract award and pricing information was lacking on seven purchases made through State contract vendors, and the District should have paid $1,028 less for three purchases.

Click here to read complete report - pdf

 

Municipalities

Town of Hempstead – Information Technology Access Controls (2021M-158)

Town officials did not establish adequate access controls to help safeguard IT systems against unauthorized access.

The Board and Town officials did not:

• Develop and adopt comprehensive IT policies and procedures addressing key IT security issues, such as breach notification, and those related to acceptable computer use, protection of PPSI, application and network controls, password security, and user access controls.
• Provide IT security awareness training to all IT users, so they understand IT security measures and their roles in safeguarding data and IT assets.

In addition, sensitive IT control weaknesses were communicated confidentially to officials.

Click here to read complete report - pdf

 

Applying the Rule of Three in selecting an individual from an eligible list for appointment to a position in the competitve class

How many names must be certified for appointment from an eligible list established as the result of a competitive examination to a position in the Competitive Class?

Prior to 1900 New York State civil service appointments from eligible lists were based on the rule of one, also referred to as "the rule of the list." This rule mandated the appointment of the candidate standing highest on the eligible list certified by the responsible civil service commission.

In 1900 the "rule of one" was struck down by the Court of Appeals as unconstitutional. The Court ruled that "if the civil service commissioners have power to certify to the appointing officer only one applicant of several who are eligible and whom they have, by their own methods, ascertained to be fitted for a particular position, and their decision is final ... then the civil service commission becomes and is the actual appointing power" [People v Mosher, 163 NY 32].

This decision prompted establishment of the so-called "rule of three," currently set out in Section 61.1 of the Civil Service Law. Section 61.1 permits the appointing authority to select from among the three candidates who stand highest on the eligible list and are interested in the appointment. The rule of three was held valid by the Court of Appeals in People v Gaffney, 201 NY 535, a case decided in 1911.

In applying the Rule of Three, tie scores allow the appointing authority to make its selection from among far more than three eligible candidates. For example, if the eligible list consists of one candidate having a score of 100, a second with a score of 99 and 60 candidates each with a score of 98, all 62 candidates will be deemed "reachable for appointment."

On the other hand, if there is but one vacancy to fill and 60 individuals attained a score of 100 while one eligible had a score of 99 and another eligible had a score of 98, the appointing authority could only select from among the "top 60" eligible candidates and may not consider either [or both] of the two lower scoring candidates for the appointment "until the 60 name certification is exhausted," i.e. reduced to two names or to one name.

Further, under certain circumstance, Section 60.1 of the Civil Service Law permits the responsible civil service commission to combine two eligible lists in order to provide a "mandatory list" -- a list consisting of at least three qualified candidates willing to accept appointment to the position.

Although courts have ruled that a civil service commission cannot mandate a rule of one, the appointing authority itself may elect to be bound by such a rule. This has not been viewed as offending public policy because the appointing authority has merely truncated its ability to exercise discretion with respect to selecting candidates for appointment. Such a truncation is typically the reflection of a term or condition set out in a Collective Bargaining Agreement or a Memorandum of Understanding negotiated pursuant to Article 14 of the Civil Service Law, the so-called "Taylor Law".

There is, however, a provision in the Civil Service Law addressing "preferred lists; certification and reinstatement therefrom" which mandates appointments in accordance with the "Rule of One". Subdivision 2 of Section 81 of said law provides, in pertinent part, that "the names of persons on a preferred list shall be certified therefrom for reinstatement to a vacancy in an appropriate position in the order of their original appointments [emphasis supplied]." Further, Subdivision 4 of Section 81 provides that "no person suspended or demoted prior to the completion of his probationary term shall be certified for reinstatement until the exhaustion of the preferred list of all other eligibles thereon" and upon such reinstatement, "such probationer shall be required to complete his probationary term."

 

 

School Districts Share ‘Lesson Plan’ for Boosting Cybersecurity

On August 22, 2022, GOVTECH reported that "K-12 school districts’ collections of student data, array of digital systems and limited defense budgets are just some of the factors that make them tempting targets for cyber attackers," citing speakers during a FedInsider panel on August 21, 2022. 

GOVTECH noted that "active threat monitoring, security awareness training, vetted cloud vendors and other strategies can help reduce the dangers." 

In the words of GOVTECH, "Valuable student data, many digital systems and devices frequently shuttled between homes and schools make K-12 districts vulnerable to cyber attack. But there are plenty of ways districts can armor up." 

Click here to READ MORE.