Audit reports released by State Comptroller DiNapoli on August 16, 2013

Audit reports released by State Comptroller DiNapoli on August 16, 2013

On August 16, 2013, New York State Comptroller Thomas P. DiNapoli announced that the following audits were issued. . [Click on text highlighted in bold to access the full report.] 

Department of Agriculture and Markets, Uncollected Penalties (2012-S-69)
Auditors found outstanding accounts routinely have no collection activity for two years or more and are often eventually deemed uncollectible. Between April 2007 and October 2012, more than 6,000 penalized establishments went out of business resulting in the withdrawal and write off of more than $3.5 million of accounts receivable. Critical but incompatible duties associated with collection are all assigned to one employee. An absence of management oversight has increased the risk that errors, omissions and even irregularities can occur and not be detected.

Department of Motor Vehicles, Oversight and Collection of Snowmobile Registration Fees (2011-S-54)
DMV practices have allowed snowmobile registration discounts to registrants who are ineligible for them, resulting in less revenue to the trail fund for trail services. As a result, 31 of the 50 discounted registrations (62 percent) auditors sampled were for registrants for whom neither DMV nor the New York State Snowmobile Association could confirm eligibility. Given the weaknesses identified, auditors estimate lost revenues to the trail fund may be significant.

Metropolitan Transportation Authority, Selected Aspects of Bus Fleet Maintenance Report (2013-F-8)
An initial audit report in 2010 examined whether the MTA has standards and procedures for the maintenance of its bus fleet, performs bus maintenance in compliance with these standards and procedures, and has a comprehensive maintenance plan for its bus fleet. Auditors found that a number of improvements were needed. In a follow-up report, auditors found the MTA made significant progress in correcting the problems identified.

The MTA has implemented four recommendations and partially implemented three recommendations.

Also, as part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, auditors looked at travel expenses for the highest-cost travelers in the state for the following state entities:

State University of New York System Administration Office, Selected Employee Travel Expenses (2012-S-100)
Auditors selected to audit one State University of New York System Administration Office employee whose expenses ranked among the highest in the state in the area of lodging. In total, they examined $188,074 in travel costs associated with this employee. Most of the expenses examined were appropriate. However, the employee selected for audit had charges totaling $5,021 that were either for non-reimbursable expenses ($200 hotel room smoking charge) or lacked adequate assurance that the charges were for the most reasonable and economical method of travel ($4,821 in car service charges).

State University of New York College at Buffalo, Selected Employee Travel Expenses (2012-S-136)
Auditors were only able to examine two years and nine months of the three years of travel expenditures totaling $127,095 because the college was not required to and did not maintain records prior to July 1, 2008. The travel expenses for the one employee selected for audit were documented and adhered to state travel rules and regulations. This employee was an athletic coach who was responsible for team travel expenses. This coach also incurred expenses for recruiting trips.

State University of New York at Stony Brook, Selected Employee Travel Expenses (2012-S-102)
Auditors examined the travel costs of eight university employees whose expenses exceeded $100,000 or had outliers in the area of train fare. In total, auditors examined $1,313,845 in travel costs associated with these eight employees. Most of the expenses auditors examined were appropriate. However, two employees had charges totaling $2,529 that were either not for legitimate business purposes or lacked adequate assurance the charge was solely for legitimate business purposes.
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Hearsay evidence coupled with nonhearsay evidence held to constitute substantial evidence sufficient to support the appointing authority’s disciplinary decision

Hearsay evidence coupled with nonhearsay evidence held to constitute substantial evidence sufficient to support the appointing authority’s disciplinary decision

2013 NY Slip Op 05630, Appellate Division, Second Department

The appointing authority terminated the employee [Petitioner] following a Civil Service Law §75 disciplinary hearing. Petitioner was found guilty of “misconduct and/or incompetence” and was terminated from her position. Petitioner appealed.

The Appellate confirmed the appointing authority’s determination, explaining that the review of administrative determinations in employee disciplinary cases made after a hearing pursuant to Civil Service Law §75 is limited to a consideration of whether the appointing authority's determination was supported by substantial evidence.

Although much of the evidence against Petitioner offered by the employer was hearsay, the Appellate Division said that this hearsay evidence, in conjunction with the nonhearsay evidence presented at the hearing, constituted substantial evidence sufficient to support the determination that Petitioner was guilty of the charges brought against her.

As to the penalty imposed, termination, the court said that the penalty was “not so disproportionate to the offense committed as to be shocking to one's sense of fairness,” citing Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_05630.htm
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Court holds that termination of an employee after 19 years of employment because of an isolated incident of misconduct shocking to one's sense of fairness”

Court holds that termination of an employee after 19 years of employment because of an isolated incident of misconduct shocking to one's sense of fairness”

2013 NY Slip Op 51322(U), Supreme Court, Dutchess County, Justice James D. Pagones [Not selected for publications in the Official Reports.].

An employee [Petitioner] was served with a number disciplinary charges pursuant to Civil Service Law §75, found guilty of such charges and dismissed from his position.

In a previous proceeding, the Appellate Division found "that substantial evidence in the record supports the determination of [the appointing authority] that Petitioner was guilty of charges one, two, and three…” Accordingly, Justice Pagones said that in the action before him there was no issue of fact as to Petitioner’s guilt as to charges one, two and three. However, said Justice Pagones, “[t]his Court must now look specifically to the offense(s) and determine whether or not the penalty, termination, shocks the judicial conscience."

The court concluded that although the facts and the charges as sustained by the Appellate Division, “while serious, do not fit the penalty of termination.”

In brief, Petitioner was observed “consuming a beer and a shot of liquor” from approximately 1:40 p.m. until 2:40 p.m during his workday, at which point Petitioner returned to work. "This one hour time frame," said the court, "has now cost [Petitioner] his job and his benefits associated with the position."

Recognizing that Petitioner committed a serious infraction, Justice Pagones ruled that “the penalty of termination of his employment is so disproportionate to the offense committed as be shocking to one's sense of fairness” considering that there was no evidence in the record before the Court that Petitioner “during his nineteen (19) years of employment with [employer] had presented a disciplinary problem or that the incident was anything but isolated.”

Justice Pagones then remitted the matter to the appointing authority for the imposition of a lesser penalty and “held in abeyance pending submissions by [Petitioner] and [appointing authority] of a computation of the value of [Petitioner's] full back pay and benefits less any compensation derived from other employment or any unemployment benefits received from September 9, 2010 until now.”

N.B. With respect to the amount of the back pay to be awarded in the event a discharged employee is reinstated by action of a civil service commission or personnel officer or a court, prior to its amendment in 1985 Civil Service Law §§76 and 77 provided that the amount of back pay due an individual found to have been unlawfully terminated from his or her position was to be reduced by the amount of compensation he or she may have earned in any other employment or occupation following his or her termination, together with any unemployment insurance benefits he or she may have received during that period.

In 1985 §§76 and 77 of the Civil Service Law, which apply to certain employees in the classified service of a public employer, were amended [Chapter 851, Laws of 1985] and currently provide that an employee reinstated pursuant to either of these subdivisions is to receive the salary to which he or she would have otherwise been entitled, less the amount of any unemployment insurance benefit that he or she may have received during such period. The clause providing for a "reduction" in the amount to be paid for any compensation earned in other employment or occupation following his or her termination was eliminated.

The decision is posted on the Internet at:

http://www.courts.state.ny.us/reporter/3dseries/2013/2013_51322.htm

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Reminder from the Internal Revenue Service to register for its “Rehired Annuitants” online presentation for government employers

Reminder from the Internal Revenue Service to register for its “Rehired Annuitants” online presentation for government employers 

Date and time of the presentation: 
August 15, 2013 at 2 p.m. Eastern Time

The Internal Revenue Service [IRS] advises that payroll tax treatment of a former government employee that returns to work for the same entity may be different than it was prior to their retirement or separation. This presentation will help government employers understand how to comply with the complicated and often misunderstood tax implications of hiring a former employee.

For more information and to register, please read this article and then click on to sign up for this free online presentation.

If you have any questions for the IRS about this presentation, click on send us an e-mail.
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Unsatisfactory performance rating vacated because of the lack of documentation in the employee’s personnel record

Unsatisfactory performance rating vacated because of the lack of documentation in the employee’s personnel record

2013 NY Slip Op 05598, Appellate Division, First Department

The Appellate Division reversed a Supreme Court's ruling that dismissed a petition challenging a teacher’s annual unsatisfactory performance rating and annulled the unsatisfactory rating given the educator.

The court said that the New York City Department of Education’s [DOE] determination to sustain the unsatisfactory performance evaluation was not rationally based on administrative findings that the teacher had engaged in corporal punishment as “there was no longer any documentation substantiating an instance of corporal punishment in [the teacher’s] personnel file after the parties stipulated to the removal of two disciplinary letters from the file.”

DOE’s "Rating Pedagogical Staff Members" procedure, in pertinent part, provides:

1. That a teacher's evaluation must be supported by documentation in his/her personnel file;

2. That documentation removed from a file through grievance procedures is inadmissible in performance reviews; and

3. That documentation not addressed directly to a teacher is inadmissible in performance reviews, unless it is attached to and part of another document appropriately placed in the teacher's file.

Further, said the court, materials placed in a teacher's personnel file must include a signature and date line for the teacher, evidencing that he or she has read the material and understands that it will be placed in the file, as well as a signature and date line for a witness; unsigned documents are inadmissible in evaluation reviews.

Citing Appeal of Naomi Dowrie [46 Ed Dept Rep 273, Decisions of the Commissioner of Education, Decision No. 15,506, in which the Commissioner of the New York State Department of Education upheld the petitioner's appeal from an unsatisfactory rating on the ground that the respondent had failed to follow its own procedures and had considered material that had been removed from the petitioner's personnel file through the grievance process, i.e., "materials not properly placed in [the] teacher's personal [sic] file," the Appellate Division concluded that there was no documentation in the record to support the unsatisfactory rating give the teacher in this instance.

The court also noted Mangone v Klein, a decision by a State Supreme Court justice in which the court, relying of Dowrie, denied DOE's motion to dismiss the educator’s petition seeking to set aside his unsatisfactory rating upon finding that there was nothing in the teacher's personnel file other than a disciplinary letter that had been ordered to be removed following arbitration related to the allegations against him. [Mangone was not selected for publication in the Official Reports but the decision is posted on the Internet at: http://www.nycourts.gov/reporter/pdfs/2007/2007_32475.pdf].

The DOE decision is posted on the Internet at:  http://www.courts.state.ny.us/reporter/3dseries/2013/2013_05598.htm
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