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 For the week of November 12 - 18, 2012 [Click on the caption to access the full report] DiNapoli: Improvements Needed At Saratoga Housing Authority Auditors found lax spending controls at the Saratoga Housing Authority, according to an audit released Friday by State Comptroller Thomas P. DiNapoli. DiNapoli: Schenectady’s Fiscal Condition Improving The City of Schenectady faces an unstable financial future, but increased economic development and better long–term financial planning point to signs of progress, according to an audit issued Tuesday by State Comptroller Thomas P. DiNapoli. DiNapoli: Dunkirk Mishandled Federal HUD Grant Funding The City of Dunkirk spent more than $1 million from the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant program on unauthorized or questionable activities, according to an audit issued Tuesday by State Comptroller Thomas P. DiNapoli. The findings have been referred to HUD for further review. Comptroller DiNapoli Releases Audits New York State Comptroller Thomas P. DiNapoli last Friday announced his office completed the following audits:  Department of Health;  Division of Housing and Community Renewal;  Office of Mental Health,  Quality of Internal Control Certification;  Office of Parks, Recreation and Historic Preservation;  Department of Health Overpayments for Hospital Readmissions; and,  Thoroughbred Breeding and Development Fund. Hurricane Sandy Relief Efforts Comptroller Thomas P. DiNapoli and volunteers from the Comptroller’s Office, along with family and friends, will deliver a semi–trailer truckload of supplies to residents of Long Beach at 1 p.m. Saturday, November 17, at the Long Beach Ice Arena as part of the Comptroller’s Office’s Hurricane Sandy relief campaign. The Comptroller and staff volunteers will unload the truck and assist the relief center with sorting and distribution of the household and cleaning supplies. The Comptroller’s Office continues to work with our partners in government to expedite the approval of all storm related contracts and expenditures. Additional items:

Saratoga Springs Housing Authority criticized in audit Comptroller’s Audit Finds Problems In Dunkirk NY Thruway toll hike on hold

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 November 16, 2012 [Click on the caption to access the full report]

Department of Health, Improper Payments Related to the Medicare Buy-In Program (2010-S-76)
From March 2006 through February 2011, Medicaid made nearly 260,000 improper payments, totaling about $26.8 million, for people enrolled in the Medicare buy-in program. The improper payments included $21.1 million in Medicare premiums for people who were ineligible for the buy-in program. This included improper payments of $1.9 for 532 people who were deceased. The improper payments resulted from insufficient DOH oversight, poor local district practices, and weaknesses in certain Medicaid claims processing controls. Auditors recommended DOH increase oversight of local districts, recover inappropriate Medicare buy-in payments, and improve the Medicaid claims processing system to ensure accurate payment of medical claims for individuals eligible for the buy-in program.
 
Division of Housing and Community Renewal, Quality of Internal Control Certification (2012-S-31)
In 1987, the Legislature passed the New York State Governmental Accountability, Audit and Internal Control Act requiring State agencies and public authorities to institute a comprehensive system of internal controls over their operations. By April 30 each year, DOB requires each covered agency to certify compliance with the act. On April 26, 2011, DHCR submitted its annual Internal Control Certification and reported full compliance with all provisions of the Act. DHCR's internal control certification was submitted timely. However, auditors identified several areas where the quality of the certification and/or the actual internal control program could be improved.

Office of Mental Health, Quality of Internal Control Certification (2012-S43) See 2012-S-31 above for description of requirements
OMH's Internal Control Certification was submitted on time and generally exhibited the necessary quality. Answers to most questions were complete and responsive, and were supported by records and documents maintained by the agency. However, OMH's certification did not provide sufficient detail in describing the results of its reviews of high-risk activities.

Office of Parks, Recreation and Historic Preservation, Quality of Internal Control Certification (2012-S-49) See 2012-S-31 above for description of requirements
On June 25, 2012, Parks submitted its annual Internal Control Certification and reported full compliance with all provisions of the Act. Parks’ Internal Control Certification was submitted, 56 days after the April 30 deadline.  Parks’ certification did not provide the required level of detail, did not support some statements with sufficient documentation, and was unable to provide evidence of the communication of the Internal Control Officer designee to all staff. The office has not yet completed a program of internal control review and its internal audit function has not undergone an external quality assessment as required by professional standards.

Department of Health Overpayments for Hospital Readmissions (Follow-Up) (2012-F-11)
An initial audit report examined whether the Department of Health (DOH) overpaid hospitals when the hospitals readmitted patients they had recently discharged. The audit identified overpayments totaling nearly $163,000 from a review of a judgmental sample of claims from five hospitals. The hospitals have already refunded the overpayments to Medicaid. The audit also identified four other hospitals with questionable claims. In a follow-up report, auditors found DOH officials have made progress in correcting the problems identified in the initial report. Of the five prior audit recommendations, three have been implemented, one has been partially implemented, and one is no longer applicable.

Thoroughbred Breeding and Development Fund, Selected Operating Practices (2011-S-36)
The fund has been receiving the statutory commissions due from the tracks, OTBs, and VLT operators. However, while assessing the statutory commission rates due the fund, we found that the New York Racing Association (NYRA) had shortchanged winning bettors by approximately $7.4 million between Sept. 15, 2010 and Dec. 21, 2011. This happened because NYRA was not complying with statutory retainage rates on exotic bets. As a result of our finding, which was identified in December 2011, an investigation was conducted by the NYS Racing and Wagering Board which led to the firing of NYRA’s president/CEO and its senior vice president/general counsel.  Auditors found the fund improperly underreported statutorily limited administrative expenses and promotional expenses by $399,908 for calendar years 2009 and 2010.

Allegations of negligent hiring and supervision of employee rebutted by evidence submitted by employer in support of its motion to dismiss the lawsuit

Allegations of negligent hiring and supervision of employee rebutted by evidence submitted by employer in support of its motion to dismiss the lawsuit

"John Doe 1," v Board of Educ. of Greenport Union Free Sch. Dist., 2012 NY Slip Op 07633, Appellate Division, Second Department

Parents of a student at the Greenport Union Free School District alleged that a teacher's aide employed by the school district engaged in an inappropriate sexual relationship with their child.

Among the complaints asserted against the school district and certain of its officers was a cause of action alleging that these defendants were [1] vicariously liable for the actions of teacher’s aide and [2] were liable for the negligent hiring and supervision of the aide.

The Appellate Division held that the evidentiary material submitted in support of the school district’s motion to dismiss the action as to the district and certain of its employees demonstrated that the parents did not have a cause of action against those defendants sounding in either vicarious liability or negligent hiring and supervision, explaining that all of the alleged improper acts by school aide took place off school premises and, or, outside of school hours, when the school defendants had no custody or control of the students and no duty to monitor or supervise the conduct of the school aide.

Further, said the court, the evidence demonstrated that the conduct of aide was personally motivated and constituted a complete departure from her duties as a school district employee, thereby negating any potential vicarious liability on the part of the school defendants for her alleged tortious acts.

As to the claim that the school district was liable for negligent hiring and supervision of the aide, the Appellate Division said that the evidence established that school district “properly investigated” the aide prior to her being hired, and that the school district had no notice of any propensity on her part to sexually assault students.

The court also noted that the parents did not allege that the school district defendants knew or had reason to know of any improper behavior by the aide nor was any nexus between aide's employment and the alleged sexual assaults, since they were separated by time, place, and the intervening independent acts of the aide.

Accordingly, ruled the Appellate Division, Supreme Court should have granted that branch of the school district's motion to dismiss the complaint insofar as asserted against the school district and its named officials.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07633.htm

Unless limited by the collective bargaining agreement, an arbitrator has broad powers to fashion an appropriate remedy in resolving a contract grievance

Unless limited by the collective bargaining agreement, an arbitrator has broad powers to fashion an appropriate remedy in resolving a contract grievance
Westchester County Corr. Officers' Benevolent Assn. v County of Westchester, 2012 NY Slip Op 07307, Appellate Division, Second Department

An arbitrator issued an award that directed the Westchester County Department of Correction to cease from denying correction officers the use of a floating holiday or floating vacation day where the maximum allowable number of correction officers who were permitted to take off from work on any particular day had not been reached. When the Westchester County Corr. Officers' Benevolent Association attempted to confirm the award, Supreme Court denied its Article 75 petition.

The Appellate Division reversed the Supreme Court’s ruling.

The Appellate Division explained that "Courts are bound by an arbitrator's factual findings, interpretation of the contract and judgment concerning remedies," and a court may not "examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes that its interpretation would be the better one," citing New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321 and other decisions.

Further, said the court, even where an arbitrator makes errors of law or fact, "courts will not assume the role of overseers to conform the award to their sense of justice."

In contrast, while "judicial review of arbitration awards is extremely limited," the Appellate Division noted that a court may vacate an arbitrator's award where the arbitrator "exceeded his [or her] power." Typically courts find that an arbitrator exceeds his or her power where his or her award violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power.

In this instance the Appellate Division found that the Supreme Court’s determination that the arbitrator had exceed a specifically enumerated limitation on his power was incorrect.

The court noted that the collective bargaining agreement provides that "[a] grievance dispute arising under any term of the Agreement involving County policy or discretion may be submitted for arbitration only as to the question of whether or not the County policy was disregarded, or was applied in so discriminatory, arbitrary, or capricious a manner as to constitute an abuse of discretion." However, said the Appellate Division, this provision “does not contain any limitation upon the arbitrator's power to fashion an appropriate remedy where he or she determines that a County policy has been applied in so discriminatory, arbitrary, or capricious a manner as to constitute an abuse of discretion.”

Here, the arbitrator determined that a policy of the Westchester County Department of Correction that permitted only one correction officer per day to use a floating holiday or vacation day was applied in an arbitrary manner to the named grievant.

As the collective bargaining agreement did not set out any limitation on the arbitrator's power to award relief upon making such a finding, the court ruled that the arbitrator had not exceed his power by “directing the Department to cease and desist from denying correction officers the use of a floating holiday or floating vacation day where the maximum allowable number of correction officers who were permitted to take off from work on any particular day, as determined by the Department, has not been reached.”

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07307.htm

Terminating a probationary employee

Terminating a probationary employee

Wilson v City of New York, 2012 NY Slip Op 07570, Appellate Division, First Department

Supreme Court, New York County, Justice Alice Schlesinger granted a probationary New York City correction officer’s petition to vacate and annul the appointing authority's' decision to terminate him from his position and reinstated him to his former position without back pay.

The Appellate Division unanimously reversed Justice Schlesinger’s ruling “on the law” and affirmed the City’s determination terminating the correction officer from his position.

The court explained that “A probationary employee may be dismissed for almost any reason, or for no reason at all, and the employee has no right to challenge the termination in a hearing or otherwise, absent a showing that he or she was dismissed in bad faith or for an improper or impermissible reason,” citing  Swinton v Safir, 93 NY2d 758.

Further, the Appellate Division said that the burden falls on the petitioner to demonstrate by competent proof that a substantial issue of bad faith exists, or that the termination was for an improper or impermissible reason.*

There is one exception to this general proposition, however. A probationary employee appointed to a position in the Classified Service to be terminated prior to the end of his or her minimum period of probation is entitled to a hearing pursuant to §75 of the Civil Service Law or its equivalent as such probationary employees hold permanent appointment and enjoy limited tenure rights.

Courts have ruled that probationers are entitled to notice and hearing if the appointing authority seeks to dismiss the individual during his or her minimum period of probation. The rationale for this was noted in McKee v. Jackson, 152 AD2d 54. Here the court said that the probationer is entitled to a minimum period of time to demonstrate his or her ability to successfully perform the duties of the position.

In contrast, as the Court of Appeals held in Gray v Bronx Developmental Center, 65 NY2d 904, a probationer may be dismissed without notice and hearing after completing his or her minimum period of probation and prior to the expiration of his or her maximum period of probation.

* The Appellate Division said that the record demonstrated that the corrections officer was terminated during his probationary period for absenteeism, violation of the appointing authority's rules by failing to report to his post on one occasion, and by being arrested for obstruction of governmental administration while off-duty  and that he "failed to sustain his burden of showing bad faith or an improper motive."

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07570.htm