Audits released by the New York State Comptroller

Audits released by the New York State Comptroller

From the Office of the State Comptroller, December 11, 2012

On December 11, 2012 New York State Comptroller Thomas P. DiNapoli announced the following audits of State agencies by his office have been issued. 

The audits addressed such issues as overtime procedures, processing NYSHIP health insurance claims, travel expenses incurred by certain state workers, the disposal of computers, Medicade payments and dual employment.

Office of Court Administration, Controls Over Overtime Costs (2011-S-2)
Based on a random sample of 196 overtime payments, auditors found 110 lacked required written pre-approval for scheduled overtime and 86 lacked documentation to support that a required review was done to identify alternatives for unscheduled overtime. OCA's Financial Management Information System summary level overtime reporting was not being routinely provided to the courts for monitoring purposes and no user training for the System had taken place in years. Auditors recommended OCA ensure that supervisory staff comply with requirements for written preapproval of scheduled overtime and documented analysis of potential steps to avoid unscheduled overtime; make sure all appropriate steps have been undertaken to control public safety department overtime costs; and ensure that the new financial management system is rolled out with necessary user training and support.

New York State Health Insurance Program, Empire BlueCross BlueShield Coordination of Benefits With Medicare Part A Payments (2011-S-31)
Empire generally processed claims correctly when it was paid as the primary payer for patients with both Empire Plan and Medicare coverage. However, auditors found Empire was paid incorrectly as the primary payer on 13 claims totaling $254,141, when Medicare should have been the primary payer.
Auditors recommended Empire develop controls to help ensure it pays as the secondary payer when Medicare should be the primary payer; and periodically confirm with Civil Service the employment status of members who appear to be Medicare-eligible and have active employment status.

SUNY College at Cobleskill, Selected Employee Travel Expenses (2012-S-143)
As part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, auditors examined travel expenses for the highest-cost travelers in the state. These employees incurred more than $100,000 in travel expenses during the three year period ending March 31, 2011. One of these employees worked at the College at Cobleskill and had travel costs totaling $181,890. Auditors found that the travel expenses for the one College employee selected for audit were documented and adhered to State travel rules and regulations.

SUNY College at Oneonta, Selected Employee Travel Expenses (2012-S-145)
As part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, we audited travel expenses for the highest-cost travelers in the state. These employees incurred more than $100,000 in travel expenses during the three year period ending March 31, 2011. Three of these employees worked at the College at Oneonta and had travel costs totaling $326,125. Auditors found that the travel expenses for the three College employees selected for audit were documented and adhered to State travel rules and regulations.

State Office for the Aging, Disposal of Electronic Devices (2012-S-39)
During March 2012, the office had amassed 18 computers that were ready for surplus sale. Using forensic software, auditors analyzed the media components of each device and found none contained any readable data and concluded the office has complied with requirements to protect sensitive information.

Department of Health Medicaid Payments for Dental Consultations (Follow-Up) (2012-F-27)
An initial audit report examined Medicaid payments to dental specialists for consultation services. Based on a statistical analysis of a sample of claims paid to ten dental specialists, auditors estimated the claims for these specialists alone accounted for at least $1.2 million of Medicaid overpayments to as much as $1.3 million. Auditors concluded that if these results held true for the claims of all other providers of dental consultations during the audit period, then New York's Medicaid program overpaid an additional $2.6 million. In a follow-up report, auditors found DOH officials have made significant progress in correcting the problems identified in the initial report.

City University of New York, New York City Department of Parks and Recreation - Questionable Timekeeping Practices Relating to the Dual Employment of Stationary Engineers (2011-S-27)
CUNY and Parks both employ stationary engineers, who are responsible for a variety of functions, such as operating and maintaining power plants for parks and maintaining campus buildings for CUNY. Auditors matched the state payroll, which accounts for CUNY employees, with the city payroll, which accounts for Parks employees, for the period July 1, 2009 to June 30, 2010, and identified ten stationary engineers who received combined earnings from both CUNY and Parks that ranged from $150,000 to $256,000. Auditors found 338 occasions where engineers reported being present at both jobs at the same time. In another 155 cases, there was no break between the times the staff reported leaving one job and starting their shift at the other. Auditors recommended management increase oversight of stationary engineers and their supervisors to ensure that all schedule changes are properly documented and approved and implement an automated timekeeping system and ensure stationary engineers follow regulations relating to dual employment.

Members of the State's Security Guard Advisory Council are State officers or employees for the purposes of Public Officers Law §17

Members of the State's Security Guard Advisory Council are State officers or employees for the purposes of Public Officers Law §17

Opinions of the Attorney General, Formal Opinion 2012- F2

Public Officers Law §17 provides for the defense and indemnification of State officers and employees sued in a civil action or proceeding in any state or federal court for acts or omissions involving the performance of their official duties.

The Attorney General has advised Gina L. Bianchi, Esq., Deputy Commissioner and Counsel, New York State’s Division of Criminal Justice Services, that members of the Security Guard Advisory Council are State officers or employees for the purposes of Public Officers Law §17.

Presumably the same would be true with respect to the provisions of Public Officers Law §19's applicability  to such Council members. 

Public Officers Law §19 provides, in pertinent part, that it is “the duty of the state to pay reasonable attorneys' fees and litigation expenses incurred by or on behalf of an employee in his or her defense of a criminal proceeding in a state or federal court arising out of any act which occurred while such employee was acting within the scope of his* public employment or duties upon his acquittal or upon the dismissal of the criminal charges against him.”

With respect to political subdivisions of the State, Public Officers Law §18 authorizes such entities, “by the adoption of local law, by-law, resolution, rule or regulation,” to provide for the defense and indemnification of its officers and employees in the event any such persons are sued in federal or state courts in a civil matter related to the performance of their official duties.

* §22 of the General Construction Law, in pertinent part, provides that “Whenever words of the masculine or feminine gender appear in any law, rule or regulation, unless the sense of the sentence indicates otherwise, they shall be deemed to refer to both male or female persons.”

The Attorney General's Opinion 2012-F2 is posted on the Internet as a PDF file at:

http://www.ag.ny.gov/sites/default/files/opinion/2012-f2pw.pdf

Reassignment of school principals challenged by students, resident taxpayers and employees of the school district

Reassignment of school principals challenged by students, resident taxpayers and employees of the school district

Decisions of the Commissioner of Education, Decision 16,431

In these appeals to the Commissioner of Education the petitioners challenged the school board's reassignment of school principals. As two separated appeals concerning the same issue were filed by different petitioners, the Commissioner consolidated them because they “present similar issues of fact and law.”

The petitioners in Appeal I alleged that board members acted negligently, with a wrongful purpose and not in the best interest of students, taxpayers and school staff and asked the Commissioner to overturn the board’s decision and remove certain named board members. 

The petitioners in Appeal II asked the Commissioner to order an “immediate mediation” of the parties’ dispute in order to ensure that the board’s action “was done properly.”

The school district asked the Commissioner to dismiss both appeals contending that

[1] The resolution passed following all due process requirements, in accordance with board policies and pursuant to the board’s powers under the Education Law;

[2] The board was not required to provide a rationale for the board’s decision

[3] the transfers were not made for a wrongful purpose or in willful violation or neglect of duty. And

[4] The transfers were in the best interest of the district.

The Commissioner first addressed a number of procedural issues that should be noted:

1. In Appeal II the petitioners submitted four newspaper articles to support their position. The Commissioner noted that “It is well settled that newspaper articles do not constitute evidence of the truth of the statements contained therein” and that he did not consider them “for the veracity of their content.”

2. Petitioners in both Appeal I and Appeal II seek class certification but both appeals failed to satisfy the requirements. The Commissioner explained that while petitioners, as district residents and taxpayers, have standing to maintain the appeals and application, to the extent they seek class certification, they have failed to meet the requirements as an appeal may only be maintained on behalf of a class where the class is so numerous that joinder of all members is impracticable and where all questions of fact and law are common to all members of the class. A petitioner seeking class certification must set forth the number of individuals he or she seeks to represent and must show that all questions of law and fact would be common to all members of the class. In this instance, said the Commissioner, the “pleadings are entirely devoid of any allegations addressing these criteria” and class status was denied.

3. Another critical procedural requirement regarding Appeal I was noted by the Commissioner – joining necessary parties. A party whose rights would be adversely affected by a determination of an appeal in favor of a petitioner is a necessary party and must be joined. However in Appeal I two individual’s who would be affected if petitioners prevail on the appeal are necessary parties and petitioners’ failure to join them requires dismissal of Appeal I.

As to Appeal II, the Commissioner stated that it sought an order commanding “immediate mediation” between the board and the community – conducted by a designee from the State Education Department – to ensure that the board’s action here challenged was “done properly” in accordance with state law, applicable district policies and “the best interest of” the district’s students.”

The Commissioner pointed out that an appeal to the Commissioner is appellate in nature and does not provide for investigations. Although petitioners do not explicitly request an investigation, said the Commissioner, their request for a mediation process to determine the propriety of the board’s action in light of their complaints is, in essence, a request for an investigation – relief that is not available in the context of an appeal under §310 of the Education Law.

The final issue addressed by the Commissioner: the application of the petitioners in Appeal I for the removal of school officials.

The Commissioner said that although a member of the board of education or a school officer may be removed from office pursuant to Education Law §306 when it is proven to the satisfaction of the Commissioner that the board member or school officer has engaged in a willful violation or neglect of duty under the Education Law or has willfully disobeyed a decision, order, rule or regulation of the Board of Regents or Commissioner of Education the petitioner has the burden of demonstrating a clear legal right to the relief requested and the burden of establishing the facts upon which petitioner seeks relief.

Based on the record before the Commissioner, the Commissioner ruled that the petitioners in Appeal I have failed to establish that the actions of the individual respondents in voting to transfer the two principals warrant their removal. Further, said the Commissioner, the alleged violations, even if proven, would not, on the record before him, “rise to the level of willful violation of law and neglect of duty that would constitute sufficient grounds for the removal of the individual respondents.” 

The bottom line: The Commissioner decided that on the record before him, petitioners have not met their burden of demonstrating that respondents engaged in any willful or intentional misconduct warranting their removal from office and dismissed the appeals and the application for the removal of certain school officials.

In light of this disposition, I need not consider the parties’ remaining contentions.

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume52/d16431.html

Juul Agreement entered into by the parties extending a teacher’s probationary period held valid notwithstanding its not being presented to and approved by the school board

Juul Agreement* entered into by the parties extending a teacher’s probationary period held valid notwithstanding its not being presented to and approved by the school board

Marshall v Pittsford Cent. Sch. Dist., 2012 NY Slip Op 07791

A probationary teacher [T] had “the expectation that her probationary period would last for three years.”

At the end of her third probationary year T was informed by the School Superintendent that the Superintendent would not be recommended T to the school board for tenure. In lieu of termination, T entered into a Juul agreement* with the school district. Accordingly, T was granted a fourth probationary year in exchange for the waiver of her right to a claim of tenure by estoppel.

Although the Juul Agreement was signed by T, the Teacher’s Association President and the School Superintendent, it was neither presented to nor ratified by the school board.

Prior to the end of T’s fourth probationary year, the Superintendent again advised T that the she would not recommend T for tenure. T was also told that her appointment as a probationary teacher with school district would end on June 30.

The school board voted to deny T tenure, whereupon T filed a petition pursuant to CPLR Article 78 seeking a court order "declaring" that she has tenure with the School District.

Supreme Court dismissed T’s petition; the Appellate Division affirmed the lower court’s ruling.

The Appellate Division explained that the record establishes that the Juul agreement between T and the school district was fairly made, holding that “T is estopped from challenging its validity, including the waiver of her right to tenure by estoppel contained therein.”

Conceding that the Juul agreement had not approved by the school board, which omission was characterized by the Appellate Division as “an impermissible abdication of a school board's responsibility to act as trustee …,” the court said that nevertheless agreed with [the school district] that T was equitably estopped** from disaffirming the Juul agreement despite the school board's failure to authorize or ratify it.

Here, said the court, the Superintendent unequivocally stated that she did not intend to recommend T for tenure at the end of her third probationary year based on T's evaluations and input from the Principal. In lieu of the Superintendent's recommending to the Board that T be denied tenure, the parties entered into the Juul agreement.

Further, said the Appellate Division the agreement expressly stated that "the Superintendent . . . has informed [T] that she will not be recommended for tenure at the end of her probationary period (June 30, 2010); and . . . the Superintendent has informed [T] that she is willing to recommend an extension of her probationary period for one year."

The agreement signed by the parties identified above also included a clause that stated that T "accepts the extension of her probationary period until June 30, 2011," and that T "agrees that she waives any right to claim status as tenured teacher by estoppel, acquiescence or any other reason as a result of this extension."

Inasmuch as the record establishes that the Juulagreement was fairly made, the Appellate Division ruled that T is estopped from challenging its validity and may not now disavow her waiver of her right to tenure by estoppel.

*  In Juul v Board of Education, 76 A.D.2d 837, [Affirmed 55 NY2d 648], the Appellate Division held that agreements to extend probationary periods are valid and enforceable when found to be a "knowing and voluntary waiver of the protections afforded by the Education Law."

** The Appellate Division said that “"Equitable estoppel is imposed by law in the interest of fairness to prevent the enforcement of rights which would work a fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon the opposing party's words or conduct, has been misled into acting upon the belief that such enforcement would not be sought."

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_07791.htm

An individual terminated pursuant to Civil Service Law §71 must be reinstated consistent with §71 once the individual has been found qualified to return to work by a medical officer selected by personnel department or civil service commission having jurisdiction

An individual terminated pursuant to Civil Service Law §71 must be reinstated consistent with §71 once the individual has been found qualified to return to work by a medical officer selected by personnel department or civil service commission having jurisdiction

Lazzari v Town of Eastchester, 2012 NY Slip Op 08052, Court of Appeals

A Town of Eastchester employee, Richard Lazzari, injured his neck, back, and both arms while performing his job duties. Eventually the Town placed Mr. Lazzari on workers’ compensation leave pursuant Civil Service Law §71 and ultimately the Town notified him that his employment with the Town wasterminated. Mr. Lazzari was also told that he had certain rights regarding reinstatement to his former position and the Town provided him with a copy of Civil Service Law §71.*

Subsequently Mr. Lazzari requested and obtained a review of his medical condition by the Westchester County Department of Human Resources [DHR]. DHR designated a physician to examine Mr. Lazzari and the physician determined that Mr. Lazzari was medically able to perform the duties of his position. Accordingly, DHR advised the Town that as "[t]he examining physician has concluded in his written report provided to this department that Mr. Lazzari is able to perform [his job] duties," Mr. Lazzari should be immediately restored to his position.

The Town Supervisor, however, requested that DHR send the Town a copy of the medical report, contending that "[i]n light of the apparently conflicting medical opinions, we are concerned about Mr. Lazzari's safety and that the interests of the Town and its residents will be imperiled if [he] cannot effectively perform the essential functions of his position."

In response, DHR advised the Town that it would not provide a copy of the requested report and again advised the Town that should immediately reinstate Mr. Lazzari to his former position.**

The Town neither reinstated Mr. Lazzari nor filed a Freedom of Information Law (FOIL) for the document. Further, the Town did not commence an Article 78 proceeding against the County to procure the medical documentation. Neither did the Town challenge the County's determination under Civil Service Law §71. As a result, Mr. Lazzari was required to take the initiative and filed an Article 78 petition seeking a court order compelling the Town to reinstate him.

Supreme Court granted Mr. Lazzari's petition and ordered the Town to reinstate him, reasoning that "i]gnoring the mandate of Civil Service Law §71 is not the appropriate mechanism for questioning [Mr. Lazzari's] condition or challenging the determination of [DHR]." The Town appealed and the Appellate Division reversed the lower court’s ruling on the procedural ground that DHR had not be named as a necessary party in the action and remitted the matter for further consideration with DHR's participation (see 62 AD3d 1002).

The Supreme Court, after revisiting the matter, concluded that Civil Service Law §71 does not provide for a challenge to the determination of the medical officer selected by the civil service commission or department and held the only available remedy was for the Town to institute its own Article 78 proceeding against DHR,. Supreme Court then noted that the Town failed to do so within the statutorily mandated time frame of four months.

Supreme Court then granted Mr. Lazzari’s petition and ordered the Town to reinstate him to his former position, and, in addition, ordered the Town to compensate him with back pay in accordance with Civil Service Law §77, retroactive to the date of DHR's initial letter directing Mr. Lazzari's reinstatement.

Still refusing to reinstate Mr. Lazzari, the Town appealed. The Appellate Division sustained the Supreme Court’s ruling, holding that Civil Service Law §71 did not require DHR to provide the Town with a medical certification or provide it with the underlying medical report (see 87 AD3d 534). In addition, the Appellate Division agreed that Mr. Lazzari was entitled to back pay as directed by Supreme Court.

The Court of Appeals affirmed the Appellate Division’s decision, explaining than when a municipal civil service commission or county personnel officer directs a municipal employer to reinstate an employee pursuant to a medical officer's determination of fitness pursuant to Civil Service Law §71, the municipal employer must immediately reinstate the employee and should it wish to challenge that determination, such a challenge must "take the form of an Article 78 petition."

As the coda to its decision, the Court of Appeals, Justice Pigott dissenting, said:

“After five years of litigation, the County's refusal to give the Town a copy of the medical report, and the Town's refusal to ask for it under FOIL, remain unexplained. The County does not suggest that it would have any ground for rejecting a FOIL request. It seems that a bit more common sense and less stubbornness on either side could have avoided years of trouble and expense. Since the parties have chosen to litigate, however, we must resolve the dispute, and we do so in the County's favor.

“On the issue of back pay, Civil Service Law §77 provides that an "employee who is removed . . . and who thereafter is restored to such position by order of the supreme court, shall be entitled to . . . the salary or compensation which he would have been entitled by law to have received in such position but for such unlawful removal...." The Town argues that because Mr. Lazzari was lawfully terminated and not unlawfully removed, and does not even challenge his initial termination, Civil Service Law § 77 does not apply. However, within the context of the statute there is no meaningful distinction between an unlawful removal and an unlawful refusal to reinstate, so Mr. Lazzari is entitled to back pay retroactive to the time the County directed the Town to reinstate him on December 18, 2007”

* Civil Service Law §71 provides that an employee terminated for a job-related incident can apply for reinstatement within one year of the abatement of his or her disability. The employee is to apply to the civil service department or municipal commission having jurisdiction "for a medical examination to be conducted by a medical officer selected for that purpose by such department or commission." §71 further provides that “[t]he employee ‘shall be reinstated’ if such medical officer shall certify that such person 'is physically and mentally fit to perform the duties"' of the job,"

** §71, in pertinent part, provides that “If no appropriate vacancy shall exist to which reinstatement may be made, or if the work load does not warrant the filling of such vacancy, the name of such person shall be placed upon a preferred list for his or her former position, and he or she shall be eligible for reinstatement from such preferred list for a period of four years” In the event that the individual is reinstated to a position in a grade lower than that of his or her former position, his or her name is to be placed on the preferred eligible list for his or her former position or any similar position.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_08052.htm