New York State Comptroller Thomas P. DiNapoli releases Municipal and School District audits

On December 2, 2024, New York State Comptroller Thomas P. DiNapoli announced the following municipal and school audits were posted on the Internet 

Click on the text highlighted in color to access the text of the item posted.

Town of Oxford – Procurement (Oswego County)  Town officials did not always use a competitive process when purchasing goods or services, as required. Of the purchases totaling $1.7 million reviewed, town officials did not seek competition for purchases totaling $848,783. As a result, the board did not ensure that the town obtained the most favorable terms in the best interests of its taxpayers.

Randolph Academy Union Free School District – Capital Asset Inventory Records (Cattaraugus County)  District officials did not maintain complete and accurate capital asset inventory records. The superintendent was responsible for maintaining these records but was unfamiliar with the requirements of, and did not comply with, the district’s capital asset policy. As a result, of the 90 capital assets with a total cost of approximately $93,000 that were selected for review - four laptop computers with a purchase cost totaling approximately $2,000 could not be located, and five capital assets with a purchase cost totaling approximately $3,000, including a gaming laptop, a karaoke machine and noise canceling headphones, were not included on the inventory records, making them more susceptible to theft.

Oakfield-Alabama Central School District – Procurement (Genesee County)  District officials did not always comply with state law or the district’s procurement policy and supplemental procedures when procuring goods and services. Of the 62 purchases totaling $4.9 million that were tested, district officials did not have evidence that goods and services totaling $930,806 were competitively procured. As a result, there is an increased risk that goods and services were not obtained at a favorable cost.

Town of Volney – Financial Operations Oversight (Oswego County)  The supervisor did not perform his financial responsibilities, and the board did not provide adequate oversight of financial operations. As a result, the town may have levied more taxes than necessary. Specifically, the supervisor did not maintain financial accounting records or present records to the board for audit as required by state law. Because of this, the board was unable to monitor the town’s overall finances or conduct required annual audits. The board also adopted budgets for fiscal years 2023 and 2024 that were not based on prior-year results of operations. In addition, transparency was impaired because the town’s 2021, 2022 and 2023 Annual Financial Reports were not filed with the Office of the State Comptroller.

Village of Sloan – Clerk-Treasurer (Erie County)  Although the clerk-treasurer generally recorded financial transactions accurately, transactions were not always recorded in a timely manner. The clerk-treasurer also did not provide timely or accurate financial reports to the board. As a result, the board may have made financial decisions with inaccurate and out-of-date financial information. Auditors also found the cash balances reported on the monthly treasurer’s reports that were provided to the board approximately six weeks after month-end were not accurate. Had the clerk-treasurer performed and the board reviewed bank reconciliations, these inaccuracies would have been identified and corrected.

City of Newburgh – Budget Review (Orange County)  The city’s use of approximately $3.2 million of fund balance to close gaps in the budget decreases the fund balance that is available to cover unforeseen circumstances. The city should refrain from including the additional $1.5 million revenue and corresponding expenditures in its 2025 adopted budget for the New York State Touring Route Program because there is no assurance the state will appropriate additional money for this program in fiscal year 2025-26. The city could potentially face a shortfall of $1.2 million in metered water revenue and $752,730 in sewer usage revenue if revenue estimates are not realized. The city has budgeted $23.9 million for personnel services in the general fund. However, the city’s proposed budget includes a reduction of $3.7 million in the general fund for a “vacancy factor,” a budgeting technique used by the city to account for open personnel positions, which may not be prudent, as it leaves personnel services appropriations with insufficient amounts to cover expenditures. Auditors found the appropriations for personnel services are likely underestimated by as much as $3.7 million. In addition, budgeted funding for police overtime of $748,605 is likely underestimated by at least $982,269. The proposed budget does not include a contingency appropriation in the general fund. Nor does it include a tax overlay, which could potentially create a revenue shortfall in 2025. Finally, the proposed budget includes a tax levy of $24.5 million, which is $115,087 from exceeding the tax levy limit.  

Jefferson County Industrial Development Agency (JCIDA) – Audit Follow-Up  The JCIDA has demonstrated minimal progress implementing recommendations in an audit report released in October 2020. Of the five audit recommendations, one recommendation was fully implemented, two recommendations were partially implemented, and two recommendations were not implemented.

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Applying the Ministerial Exception doctrine to complaints filed with the New York State Division of Human Rights

The New York State Division of Human Rights [DHR] dismissed Plaintiff's hostile work environment claim filed against his former employer, the Diocese of Buffalo [Diocese], concluding that the "ministerial exception"* that flows from the First Amendment to the Constitution of the United States deprived the DHR of jurisdiction over Plaintiff's complaint. 

Plaintiff appealed DHR's ruling.

A New York State Supreme Court, holding that "the absence of controlling authority does not constitute a rational basis" to determine that the ministerial exception barred review of [Plaintiff's] hostile work environment complaint, ruled that DHR's determination to that effect was an error of law. Reversing DHR's dismissal of the  Plaintiff's complaint, Supreme Court remanded the matter to DHR. 

Both DHR and the Diocese appealed the Supreme Court's ruling.

The Appellate Division, holding that Supreme Court did not give "requisite deference" to DHR, applied that standard of review to the matter and opined that DHR's "determination with respect to the hostile work environment claim is not arbitrary and capricious or affected by an error of law" because "there is no controlling ... precedent and the federal courts that have addressed the issue are divided on the extent to which the ministerial exception applies to [such] claims".

Plaintiff appealed the Appellate Division's ruling.

Noting that the United States Supreme Court has expressly held that the ministerial exception is an affirmative defense, not a jurisdictional bar, the New York State Court of Appeals concluded that DHR's determination was affected by an error of law, reversed the order of the Appellate Division and remitted the matter to the Appellate Division with directions to remand the Plaintiff's hostile work environment claim to the DHR "for further proceedings ...".

In the words of the Court of Appeals, "[because] DHR erred in treating the ministerial exception as a jurisdictional bar rather than an affirmative defense, its determination was affected by an error of law." The court said that in its reaching that conclusion it expressed "no view on whether any of the Diocese's defenses are meritorious" and "the order of the Appellate Division should be reversed, with costs, and matter remitted to that Court with direction to remand to DHR for further proceedings in accordance with this opinion".

* The Court of Appeals' decision noted the "ministerial exception is a doctrine grounded in the First Amendment to the Constitution of the United States and recognized by the United States Supreme Court in two recent decisions: Hosanna-Tabor Evangelical Lutheran Church and School v EEOC (565 US 171 [2012]) and Our Lady of Guadalupe School v Morrissey-Berru (591 US 732 [2020])." 

Those decisions, said the court "explain that the ministerial exception 'protects the right of religious institutions to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine' by supplying an affirmative defense to claims brought under 'laws governing the employment relationship between a religious institution and certain key employees'".

Click HERE to access the decision of the Court of Appeals posted on the Internet.

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