Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week ending April 18, 2013 [Click on text highlighted in bold to access the full report] 


DiNapoli Audit Finds $7.7 Million in Questionable Charges by Special Education Providers

The Lake Grove School and the Mountain Lake Children’s Residence, two special education providers run by the same company, overcharged taxpayers by as much as $7.7 million over a four–year period, according to an auditreleased Friday by New York State Comptroller Thomas P. DiNapoli.

DiNapoli: State’s Brownfield Cleanup Program Needs To Reach More Sites; Be More Cost–Effective

The New York State Legislature should examine options to restructure the state’s primary program to revitalize contaminated properties – the Brownfield Cleanup Program – in order to fully achieve the important economic, public health and environmental goals set when the program was created, according to a reportreleased Monday by State Comptroller Thomas P. DiNapoli.

DiNapoli Supports Lobbying Disclosure and Independent Director Proposals at Peabody Energy

New York State Comptroller Thomas P. DiNapoli Tuesday announced support for two shareholder proposals at Peabody Energy Corporation’s annual meeting on April 29 calling for Peabody to disclose corporate lobbying expenses and to require the chairman of the board to be an independent director.

DiNapoli Refers Investigation of Substance Abuse Provider to U.S. Attorney

Phoenix Houses of New York, Inc. provided inappropriate perks to its executives exceeding $223,000 while under contract with the Office of Alcoholism and Substance Abuse Services, according to a reportreleased Wednesday by State Comptroller Thomas P. DiNapoli. DiNapoli referred the findings to U.S. Attorney Preet Bharara’s office for review.

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week ending April 26, 2013 [Click on text highlighted in bold to access the full report] 

Bloomingburg Joint Fire District – Internal Controls Over Financial Operations (Sullivan County)
The district board did not ensure that disbursements were made for authorized district purposes. The board did not adequately segregate duties or implement sufficient compensating controls. The district treasurer performs all aspects of the cash disbursements process – including preparing the monthly abstracts; printing, signing, and mailing the checks; and preparing the bank reconciliations – without sufficient oversight by the board.

Village of Depew – Internal Controls Over Capital Projects (Erie County)
Auditors found significant problems with the accounting for and reporting of capital project activity as well as the use of certain debt proceeds. The village did not maintain capital project records in a manner that readily provides information about actual resources committed and expenditures incurred throughout the course of each project, which often span two or more fiscal years.

Essex County Probation Department – Internal Controls Over Financial Operations (2013M-38)
County and department officials had not established an adequate system of internal controls over the department’s financial operations. As a result, cash receipts were not properly accounted for, secured, and deposited in a timely manner. The department’s failure to establish policies and procedures regarding DWI administrative fees has resulted in an inequitable assessment of fees to probationers and a lack of enforcement of inactive probationers’ delinquent accounts. For example, we found that 89 inactive probationers owe at least $9,710, but as much as $58,260, to the county for unpaid fees.

Essex County Sheriff’s Department – Internal Controls Over Cash Receipts and Disbursements (2013M-35)
Although the department established a money-handling policy in April 2012, cash receipts and disbursements were not processed in accordance with the policy. Auditors found the civil clerk performed virtually all financial duties without sufficient oversight or other mitigating controls. Bail and civil office cash receipts were not properly accounted for, secured, and deposited in a timely manner. Also, the department’s computer system allowed for the ability to modify and delete financial transactions, creating the opportunity for the manipulation and concealment of transactions.

Town of Johnsburg – Management Oversight and Online Banking (Warren County)
The town board did not adequately design, implement, or monitor internal controls over the town’s financial activities. The board did not conduct an annual audit of the records of officials and employees who receive and disburse cash. The town supervisor has not adequately segregated the bookkeeper’s online banking duties. Also, the town has not established a confirmation process with its bank for online transfers of town moneys.

Town of North Castle – Cash Disbursement (Westchester County)
Internal controls over cash disbursement are appropriately designed and operating effectively with the exception of bank reconciliations, which have not been prepared since May 2012. Because the town’s deposits total $26 million, the lack of bank reconciliations creates a risk that errors or fraudulent transactions could occur without detection.

Town of Owego Fire District – Board Oversight (Tioga County)
The district board did not audit and approve claims after the transactions occurred and prior to the treasurer paying those claims. Although the board did ensure that the goods purchased were for district purposes, they could not be sure that the amounts paid were aligned with its previously established expectations. In addition, district officials could not account for more than 50 percent of fuel delivered to two of the three district fire stations.

Rescue Fire Company, Inc. – Unaccounted-For Bar Receipts (Niagara County)
All four bar committee members had unmonitored access to the safe where the cash from bar operations was stored.  The board did not require bar committee members to have a second member present while conducting cash counts or adding or removing cash from the safe. Company officials said over the last several years, the bar committee chairman was able to divert cash from the cash register in the bar without their knowledge.

Village of Village of the Branch – Internal Controls Over Financial Operations (Suffolk County)
The village building inspector did not take an oath of office and, as generally required of a village officer, does not reside within the village. In addition, the village and the inspector have entered into a contract, which provides for an annual fee for basic services of $8,000 plus 50 percent of certain permit fees. During the audit period, the inspector received $84,197, nearly $73,000 of which was based on fees collected for building permits.  Because there is no cap on the amount of fees paid to the building inspector, the village cannot know whether the inspector’s compensation is excessive in any given year.

Beacon City School District – Budget Review (Dutchess County)
Auditors found that the significant revenue and expenditure projections in the preliminary budget are reasonable. The district’s proposed budget complies with the property tax levy limit.

Chenango Valley Central School District – Budget Review (Broome County)
Auditors found that the significant revenue and expenditure projections in the proposed budget are reasonable. The district’s proposed budget complies with the property tax levy limit.

Fairport Central School District – Financial Condition and Capital Improvement Project Expenditures (Monroe County)
The district’s budgeting practices have generated repeated operating surpluses and withheld significant funds from productive use. From fiscal year 2007-08 through 2011-12, the district generated net surpluses totaling $15.8 million, an average of $3.2 million in each year. Auditors also found we found that officials did not solicit proposals for $2.7 million in capital improvement project -related services, as required by the district policy.

Monroe-Woodbury Central School District (Orange County)
Auditors found that the significant revenue and expenditure projections in the proposed budget are reasonable. The district’s proposed budget complies with the property tax levy limit.

Oppenheim-Ephratah Central School District – Business Office Operations (Fulton County)
Auditors found the district established adequate internal controls over business office operations. Board policies and written procedures have been developed and adhered to by staff for cash receipts and disbursements, payroll, purchasing, and claims processing. Further, district officials developed appropriate segregation of duties amongst business office staff where possible and also implemented various reviews of the work performed as mitigating controls.

  ================================

For access to state and local government spending and more than 60,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

Judge removed from his position for cause notwithstanding his earlier resignation from the position

Judge removed from his position for cause notwithstanding his earlier resignation from the position

A former Judge [Judge] appealed a determination of the State Commission on Judicial Conduct in which the Commission had sustained a single charge of judicial misconduct against him and determined that he should be removed from office (see NYS Constitution, Article VI, §22; Judiciary Law §44[1]).

The Judge had earlier resigned from his position after admitting to certain conduct that he characterized as “indefensible” that occurred 40 years earlier.

Notwithstanding the Judge’s resignation, the Commission continued the proceeding and ultimately sustained the charge* and ordered Judge’s removal, finding that his admission, standing alone provided a sufficient basis for the determination.**

Citing Matter of Going, 97 NY2d 121 and Matter of Aldrich, 58 NY2d 279, the Court of Appeals affirmed the Commission’s action, explaining that it measures “the necessity for removal ‘with due regard to the fact that judges must be held to a higher standard of conduct than the public at large’ as even ‘relatively slight improprieties subject the judiciary as a whole to public criticism and rebuke, it is essential that we consider’ the effect of the Judge's conduct on and off the Bench upon public confidence in his [or her] character and judicial temperament."

The Court said that it agreed with the Commission that Judge's admissions, by themselves, were sufficient to warrant the finding of judicial misconduct. The admitted conduct undermined the integrity and impartiality of the judiciary and therefore, said the court, rendered Judge unfit for judicial office.

Noting that “[I]t is troubling that the petition is based solely on conduct that occurred 40 years ago —- 13 years before [Judge] was elevated to the bench,” the Court of Appeals said that the misconduct alleged is grave by any standard.

Accordingly, said the court, the determined sanction of removal should be accepted and Judge removed from the office of Judge.

* Two Commission members dissented in part on the ground that Judge had removed himself from his judgeship by resigning and that his post-resignation removal proceedings "served no purpose" in this case.

** Similarly, 4 NYCRR 5.3(b) which applies to employees in the classified service of the State and public authorities, public benefit corporations and other agencies for which the Civil Service Law is administered by the State Department of Civil Service, provides:provides, in pertinent part, “…when charges of incompetency or misconduct have been or are about to be filed against an employee, the appointing authority may elect to disregard a resignation filed by such employee and to prosecute such charges and, in the event that such employee is found guilty of such charges and dismissed from the service, his termination shall be recorded as a dismissal rather than as a resignation.” Many local civil service commissions have adopted a similar provision.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02773.htm