Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending May 23, 2015

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending  May 23, 2015

Click on text highlighted in color  to access the full report

Embezzlement by Former Justice Court Clerk results in incarceration, repayment of $117,120

An audit investigation by State Comptroller Thomas P. DiNapoli results in the incarceration of a former town Justice Court clerk. The audit uncovered the embezzlement of $117,120 by Mary Jo Guyette, former Town of Potsdam Justice Court Clerk. The Comptroller’s audit report is posted on the Internet at: http://www.osc.state.ny.us/localgov/audits/towns/2014/potsdamjc.pdf.

Guyette, 44, was sentenced to six months in jail, five years probation and ordered to pay $117,120 in restitution following her January guilty plea to grand larceny in the third degree and falsifying business records in the first degree, both felonies. Guyette admitted to altering court records so she could pocket the public funds from 2009 to 2013. Since the thefts, town officials have taken several steps to improve the court’s financial oversight. 

 

DiNapoli thanked District Attorney Mary Rain and the New York State Police for their work on this case.

According to DiNapoli’s audit, Guyette recorded receipts for $115,045 in the Justice Court’s computerized database, but failed to send the money to the town, include the payments in monthly municipal reports or notify the state Justice Court Fund of the income.  Auditors also identified a cash shortage of more than $2,000.

Since taking office in 2007, DiNapoli has committed to fighting public corruption and fraud against the state’s retirement system and encourages the public to help fight fraud and abuse.

New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

 

Audits of political subdivisions of the State:

Town of Cohocton:

The town had a cash shortage of $38,136 in the clerk’s office: $29,322 from the tax collection account and $8,814 in clerk fees. Auditors identified numerous questionable deposits that were made into the tax account and may have been made by the clerk in an attempt to conceal the shortage in tax collections. The clerk was arrested in 2014, pled guilty to grand larceny and was sentenced to four months in jail and five years of probation and paid $36,000 restitution to the town. 

http://www.osc.state.ny.us/localgov/audits/towns/2015/cohocton.pdf

City of Yonkers:

The city’s proposed budget for the school district has a budget gap of $25.8 million. In addition, the city has appropriated $37.5 million, or approximately 52 percent of the available fund balance, in its general fund in the 2015-16 proposed budget. The city’s use of fund balance to close gaps in the budget decreases the fund balance that is available to cover unforeseen shortfalls in revenue or unexpected expenditures. The city will also have to increase rates for metered water and sewer rents by 31 percent and 50 percent, respectively, to realize additional amounts included in the proposed budget. The city’s proposed budget complies with the property tax levy limit.
http://www.osc.state.ny.us/localgov/audits/cities/2015/yonkers_br.pdf

Parkland Alienation

Auditors examined how municipalities complied with state laws when conveying parkland to a non-public entity or using public parkland for another purpose. Several municipalities did not comply with all of the statutory requirements, including one municipality that has not used the proceeds from its parkland alienation transaction to acquire new parkland or make capital improvements as required. Several others did not take steps to determine fair market value of the parklands alienated or replacement parcels.
http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/global.pdf

Mental health provider PSCH, Inc

Mental health provider PSCH, Inc. charged $152,680 in unsubstantiated or unallowable costs to the state Office of Mental Health (OMH) including alcohol and a sunset cruise at a conference at the Montauk Yacht Club Resort and Marina, and more than $22,000 for a staff picnic,

PSCH had a five-year, nearly $30 million contract with OMH to provide services and housing to persons with mental disabilities and substance abuse. The provider claimed $152,680 in costs that could not be substantiated or are not allowable under the contract, DiNapoli found. That included $31,908 for directors and executive staff to attend a two-day conference at the Montauk Yacht Club Resort and $22,901 for a staff picnic.  While at the resort, PSCH charged $10,723 for alcohol, $5,064 for extra guests, $13,378 for post-conference lodging and $2,743 for a sunset cruise, tips and gifts. PSCH also charged nearly $98,000 for other duplicate, unsubstantiated or inappropriate charges.  

In response to the Comptroller’s report and recommendations, OMH officials agreed to recover program overpayments where appropriate and ensure that PSCH staff receives training to recognize unallowable costs such as alcohol and entertainment.

http://www.osc.state.ny.us/audits/allaudits/bseaudits/bse20150519.pdf

Also released: eleven letter reports to the following municipalities:

Town of Amherst

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/amhersttown.pdf

Town of Clifton Park

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/cliftonparktown.pdf

Town of East Greenbush

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/eastgreenbushtown.pdf

Town of East Hampton

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/easthamptontown.pdf

Town of North Hempstead

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/northhempsteadtown.pdf

Town of Orangetown

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/orangetowntown.pdf

County of  Onondaga

 http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/onondagacounty.pdf

County of  Nassau

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/nassaucounty.pdf

Village of Port Jefferson

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/portjeffersonvillage.pdf

             

Village of Round Lake

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/roundlakevillage.pdf

City of  Rensselaer

http://www.osc.state.ny.us/localgov/audits/swr/2015/parkland/rensselaercity.pdf

Designating an individual an “independent contractor” rather than an “employee” does not control the relationship of that individual to the employing entity

Designating an individual an “independent contractor” rather than an “employee” does not control the relationship of that individual to the employing entity

Viau (New York State Off. of Ct. Admin.—Commissioner of Labor), 125 AD3d 1223

The Unemployment Insurance Appeal Board, ruled, among other things, that the New York State Office of Court Administration [OCA] is liable for unemployment insurance contributions on remuneration paid to a claimant [Worker] for unemployment insurance benefits.

While awaiting notification that her name was reachable on the eligible list for appointment to the position of “interpreter,” Worker was told she could submit an application to be put on OCA's registry of voucher paid interpreters from which interpreters are selected on an "as-needed basis."*

According to the decision, for years Worker received only sporadic assignments until in December 2009, she commenced working in the Bronx Family Court where she continued to work every day until March 2012. When Worker applied for unemployment insurance benefits, the Department of Labor found her to be an employee of OCA and, as such, found OCA liable for contributions on remuneration paid to Worker and others “similarly situated.” OCA objected on the ground that claimant was an independent contractor.

After a hearing, an Administrative Law Judge upheld the Department's initial determination. The Unemployment Insurance Appeal Board affirmed the Administrative Law Judge's decision.

OCA appealed the Board’s determination contending that the Board had:

1. Ignored the essential independence of per diem interpreters:

2. Relied on minor factors to find the existence of an employer-employee relationship; and

3. By its decision, the Board interfered with OCA's “constitutional mission to deliver services in a responsible and cost-effective manner and failed to defer to the judgment of the Chief Administrative Judge in assessing the operational needs of the Unified Court System.”

The Appellate Division said the existence of an employer-employee relationship "is a factual issue for the Board to resolve and its decision will be upheld if supported by substantial evidence." The court said that it found that substantial evidence supported the Board's decision that OCA exercised sufficient supervision, direction and control over Worker to establish an employer-employee relationship. However the court decline to extend this holding to others "similarly situated."

Further, the court found that the Board's decision “did not improperly interfere with the powers or duties of the Chief Administrative Judge in assessing the operational needs of the Unified Court System.” The Appellate Division explained that although the powers of the Chief Administrative Judge may be extraordinarily broad, his or her authority "does not exempt compliance with the Unemployment Insurance Law" and contrary to OCA's contention, the Board's decision does not impinge on any aspect of the functional or structural independence of the Judiciary.

Another argument advanced by OCA was that the Board had ignored its prior precedent in determining that Worker was an employee rather than an independent contractor. The Appellate Division said that the "prior determination" relied on by OCA was not made by the Board but by a reviewing examiner for the Department of Labor and, as such, the Board is not bound by it.

The Appellate Division modified the Supreme Court’s decision by reversing so much of the ruling that found that all persons “similarly situated” to Worker to be OCA employees and, as so modified, affirmed the lower court’s decision.

This suggests that where an employer contends that an applicant for unemployment insurance benefits is an independent contractor and not an employee, the Board must make a "case by case" evaluation of the applicant's eligibility for benefits and, further, make an assessment of any liability for employer unemployment insurance contributions on a case by case basis as well.

As to distinguishing between an employee and an independent contractor, the 20 factors being used by the IRS for this purpose are:

1. Instructions. An employee must comply with instructions about when, where, and how to work. Even if no instructions are given, the control factor is present if the employer has the right to control how the work results are achieved.

2. Training. An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods and receive no training from the purchasers of their services.

3. Integration. An employee's services are usually integrated into the business operations because the services are important to the success or continuation of the business. This shows that the employee is subject to direction and control.

4. Services rendered personally. An employee renders services personally. This shows that the employer is interested in the methods as well as the results.

5. Hiring assistants. An employee works for an employer who hires, supervises, and pays workers. An independent contractor can hire, supervise, and pay assistants under a contract that requires him or her to provide materials and labor and to be responsible only for the result.

6. Continuing relationship. An employee generally has a continuing relationship with an employer. A continuing relationship may exist even if work is performed at recurring although irregular intervals.

7. Set hours of work. An employee usually has set hours of work established by an employer. An independent contractor generally can set his or her own work hours.

8. Full-time required. An employee may be required to work or be available full-time. This indicates control by the employer. An independent contractor can work when and for whom he or she chooses.

9. Work done on premises. An employee usually works on the premises of an employer, or works on a route or at a location designated by an employer.

10. Order or sequence set. An employee may be required to perform services in the order or sequence set by an employer. This shows that the employee is subject to direction and control.

11. Reports. An employee may be required to submit reports to an employer. This shows that the employer maintains a degree of control.

12. Payments. An employee is generally paid by the hour, week, or month. An independent contractor is usually paid by the job or on straight commission.

13. Expenses. An employee's business and travel expenses are generally paid by an employer. This shows that the employee is subject to regulation and control.

14. Tools and materials. An employee is normally furnished significant tools, materials, and other equipment by an employer.

15. Investment. An independent contractor has a significant investment in the facilities he or she uses in performing services for someone else.

16. Profit or loss. An independent contractor can make a profit or suffer a loss.

17. Works for more than one person or firm. An independent contractor is generally free to provide his or her services to two or more unrelated persons or firms at the same time.

18. Offers services to general public. An independent contractor makes his or her services available to the general public.

19. Right to fire. An employee can be fired by an employer. An independent contractor cannot be fire so long as he or she produces a result that meets the specifications of the contract.

20. Right to quit. An employee can quit his or her job at any time without incurring liability. An independent contractor usually agrees to complete a specific job and is responsible for its satisfactory completion, or is legally obligated to make good for failure to complete it.

Additional information concerning the status of an individual as an employee or as an independent contractor is posted on the Internet at: 

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

* The decision notes that in 2012 OCA employed approximately 300 staff interpreters and maintained a registry of 700 per diem interpreters.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_01691.htm

The court will sustain an administrative determination if the administrative body’s interpretation of the controlling statute is reasonable and the underlying factual findings are supported by substantial evidence

The court will sustain an administrative determination if the administrative body’s interpretation of the controlling statute is reasonable and the underlying factual findings are supported by substantial evidence

2015 NY Slip Op 519303, Appellate Division, Third Department

Supreme Court dismissed the petitioner's [Retiree] application seeking a review of a determination of State Comptroller denying Retireer's application for “incentive service retirement.”

On November 18, 2010, Retiree applied for the retirement incentive offered temporarily to certain public employees but the New York State and Local Employees' Retirement System [ERS] denied the application as untimely. ERS said that as Retiree's retirement would not become effective until after the open period for the incentive had passed.

The Appellate Division sustained the Supreme Court’s determination, noting that the controlling statute, in relevant part, provided that, "[f]or the purposes of retirement pursuant to this act, a service retirement application must be filed with the appropriate retirement system not less than [14] days prior to the effective date of retirement to become effective."*

Retiree’s employer Petitioner had adopted an open period for applications for the incentive from August 27, 2010 to November 24, 2010.

Following a hearing, the Hearing Officer upheld the denial of Retiree’s application and the Comptroller adopted that determination. In affirming Supreme Court’s holding sustaining the Comptroller’s decision the Appellate Division said "The Comptroller has exclusive authority to determine all applications for retirement benefits and the determination must be upheld if the interpretation of the controlling retirement statute is reasonable and the underlying factual findings are supported by substantial evidence."

Here, said the court, the Comptroller interpreted the phrase "that is effective during the open period" to refer to an applicant's retirement. Accordingly, inasmuch as an application for the incentive must be filed not less than 14 days prior to an applicant's retirement date, the Comptroller determined that an application had to have been filed by November 11, 2010 for a retirement to be effective during the open period.

Although Retiree contended that the phrase refers to the application and not the retirement date, the Appellate Division said that it found “no error in Supreme Court's analysis, which deferred to the Comptroller's interpretation on the ground that it was based upon "his specialized knowledge and utilization of underlying operational practices."

As the court could not conclude that the Comptroller's interpretation was "irrational, unreasonable or inconsistent with the governing statute," it said that it would not be disturbed.

* Laws of 2010, Chapter 105,  Part B, §1 [h], in pertinent part, provides “For the purposes of retirement pursuant to this act, a service retirement application must be filed with the appropriate retirement system not less than fourteen days prior to the effective date of retirement to become effective, unless a shorter period of time is permitted under law.”

Further, Paragraphs 5 and 6 of the fiscal note submitted with the Bill appear to require the individual to:

 5. File an application for Service Retirement that is effective during the Open Period, and

 6. File written notification with the employer of the member on or before the 21st day prior to the end of the Open Period.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_519303.htm

Inability to Work With a Particular Supervisor is Not a Disability

Inability to Work With a Particular Supervisor is Not a Disability

By Arkady Itkin -  http://www.sanfranciscoemploymentlawfirm.com/

 

Generally, an employee who suffers from anxiety / stress depression as a result of working for a particular supervisor is not entitled to having a different manager as a reasonable accommodation to that disability.

Read more at: https://casetext.com/links/2ww9mkb0somr24pftydgba707

Probationary employee has the burden of showing his or her termination was made in bad faith or for an unlawful reason

Probationary employee has the burden of showing his or her termination was made in bad faith or for an unlawful reason 

2015 NY Slip Op 02220, Appellate Division, First Department

The Appellate Division sustained a Supreme Court’s dismissal of a probationary employee’s [Probationer] “motion to renew,” explaining that the lower court “properly determined that there was no basis to annul [the appointing authority’s determination to discontinue Probationer’s employment as an assistant principal

Probationer, said the court, failed to show that the appointing authority’s determination, upon reinvestigation and reconsideration, was made in bad faith, in violation of lawful procedure, or for a constitutionally impermissible purpose.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_02220.htm