State Comptroller DiNapoli Releases Audits

State Comptroller DiNapoli Releases Audits

Source: Office of the State Comptroller

New York State Comptroller Thomas P. DiNapoli issued the following audits and examinations December 5, 2018

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Department of Environmental Conservation (DEC): Oversight of the Pesticide Reporting Law (2017-S-57)Tests of samples of pesticide application and sales data entries found that they were reasonably accurate based on the certified applicators’ and sellers’ self-reported data. However, there are some inaccuracies in the database.

Gaming Commission: Equine Health and Safety (2017-S-77)The commission’s director has implemented new measures to improve its practices to promote equine health and safety in New York state. However, auditors found the commission could better document daily operating policies and procedures; improve how incident information is recorded in the Equine Breakdown, Death, Injury and Incident Database; and ensure adherence to drug testing requirements.

Higher Education Services Corporation: Oversight of the STEM Incentive Program (2017-S-75)Auditors found HESC did not always ensure that applicants met Science, Technology, Engineering, and Mathematics (STEM) Incentive Program eligibility requirements. Auditors tested a random sample of 271 award recipients at the three universities that received the most program payments (SUNY Binghamton, SUNY Buffalo, and SUNY Stony Brook) and found that HESC made $81,198 in payments on behalf of 20 recipients who did not meet the program requirements.

Division of Homeland Security and Emergency Services: Awarding and Oversight of Statewide Interoperable Communications Grants (Follow-Up) (2018-F-27)An initial audit issued in July 2017 examined whether the division awarded contracts to entities that met eligibility requirements and provided adequate oversight of Statewide Interoperable Communications Grant (SICG) awards to ensure grant funds were allocated and spent for intended purposes. Auditors concluded that the division awarded SICG funding to qualified recipients in accordance with its requirements. However, auditors identified process deficiencies in the areas of monitoring and documentation that could increase the risk of inappropriate use of funds. In a follow-up, auditors found the division has significantly addressed the issues identified in the original audit. Of the three prior recommendations, all three were implemented.
Homes and Community Renewal, Housing Finance Agency (HFA): The 80/20 Housing Program (Follow-Up) (2018-F-18)An initial audit report issued in May 2017, concluded that, based on the rents charged for our four sampled developments, the proper number of affordable units were made available to low-income tenants. A review of the files for a sample of 43 low-income tenants found that the developments used "reasonable judgment" in determining eligibility. However, some problems were found. In a follow-up, auditors found HFA has made some progress in addressing the issues identified in the prior report. Of the three recommendations, one was implemented and two were not implemented.

Metropolitan Transportation Authority: Long Island Rail Road (LIRR): Maintenance, Inspection, and Testing of the Event Recorder System (2017-S-8)Auditors determined that the LIRR has a maintenance and inspection program for its Event Recorder System; however, it was not always in compliance with the program. For example, from Jan. 1, 2014 to Feb. 27, 2017, there were five months when the non-functioning ERS exceeded the 10 percent “effective maintenance standard” established by the Federal Railroad Administration. 

Queens County District Attorney’s Office: Oversight of Persons Convicted of Driving While Intoxicated (2018-F-9)An initial report issued in July 29, 2016 found that while 9,604 offenders overseen by the office received court orders to install an ignition interlock device (IID), only 1,952 (20 percent) did. Auditors also found material non-compliance with the office’s protocols to minimize the risk that offenders would drive vehicles without IIDs. In a follow-up, auditors found the office has made significant progress in addressing the issues identified in our initial report. 

State Education Department (SED): Bank Street College of Education: Compliance With the Reimbursable Cost Manual (2017-S-5)
For the fiscal year ended June 30, 2014, auditors identified $585,047 in ineligible costs that Bank Street reported for state reimbursement. These ineligible costs included $338,175 in personal service costs, $246,707 in administrative overhead costs, and $165 in other than personal service costs. 

State Education Department (SED): Security Over Critical Information Systems (Follow-Up) (2018-F-17)
An initial audit report issued in July 2017, found that although SED had taken a number of steps to secure its critical information systems and associated data, there was still a risk that unauthorized persons could access these systems. In a follow-up, auditors found SED officials have not made significant progress in correcting the problems identified in the initial report. Of the two recommendations, one has been partially implemented and one has not been implemented.

State Education Department (SED): NYSARC Inc. – NYC Chapter: Compliance With the Reimbursable Cost Manual (2017-S-47)
For the three fiscal years ended June 30, 2015, auditors identified $1,311,070 in reported costs that did not comply with requirements for state reimbursement and recommended such costs be disallowed. These ineligible costs included $791,114 in personal service costs and $519,956 in other than personal service costs.

Remedy to be provided in the event the rejection of an administrative appeal was marred by a procedural error

Remedy to be provided in the event the rejection of an administrative appeal was marred by a procedural error

Clark v NYS Board of Parole, 2018 NY Slip Op 08071, Appellate Division, First Department

Supreme Court granted the petition to annul the determination of the Commissioners of the New York State Department of Parole [Board] affirming the determination of a panel of the Board denying Petitioner's application for parole. Supreme Court then remanded the matter for a new review before a new panel of the Board. The Board appealed the court's decision.

The Appellate Division unanimously modified the Supreme Court's ruling on the law, reinstating the panel's denial of parole but remanded the matter to the Commissioners of the Board for a new administrative appeal of that action to be considered by a new panel.

The Appellate Division explained that Supreme Court had correctly determined that the rejection of the administrative appeal was marred by procedural error when the administrative Panel permissibly considered communications in opposition to a Petitioner's application for parole submitted by public officials and members of the community and refused to provide the Petitioner with access to any of the communications it had considered in connection with the Petitioner's application for parole.

However, said the Appellate Division, the correct remedy for this procedural error in the conduct of the Panel is the annulment of the decision and the remand of the matter for new administrative appellate proceedings in which the Board should turn over the requested material, with any authorized and necessary redactions, to the Petitioner rather than the annulment of the initial denial of parole by the Panel as the matter must still undergo a proper administrative review.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08071.htm

Determining the appropriate evidence standard to be applied in a disciplinary action

Determining the appropriate evidence standard to be applied in a disciplinary action

Johnson v Riverhead Cent. Sch. Dist., 2018 NY Slip Op 08021, Appellate Division, Second Department

Joe Nell Johnson II, a tenured teacher employed by the Riverhead Central School District, was served with disciplinary charges pursuant to Education Law §3020-a alleging that he was guilty of misconduct that was "incompatible with the standards required to be seen as a positive role model for the students."

Ultimately the disciplinary hearing officer found Johnson guilty of the charges filed against him and directed the school district to terminate his employment.

Johnson filed a petition pursuant to CPLR Article 75 seeking a court order vacating the hearing officer's determination. Supreme Court denied Johnson's petition and dismissed the proceeding, whereupon Johnson appealed the Supreme Court's ruling to the Appellate Division contending that the hearing officer should have applied the preponderance of the evidence standard in making his findings.

A "preponderance of the evidence" is the standard used in disciplinary actions where arbitration is not mandated and requires that the evidence for one side outweighs evidence for the other side by some degree, however minute and the preponderance of the evidence standard generally applies only when the penalty of dismissal is accompanied by some added stigma. 

However §3032-a.3, as amended, provides that the Commissioner of Education, "upon receipt of a request for a hearing in accordance with subdivision two of this section" the commissioner shall notify the American Arbitration Association of the need for a hearing and request the Association to provide a list of names of persons from the Association's panel of labor arbitrators to serve as hearing officers. Accordingly, in Martin v Ambach, 67 NY2d 975, the Court of Appeals held that to determine whether charges were properly brought under Education Law §3020-a, the proper standard is “preponderance of evidence”, not substantial evidence.

The Appellate Division then pointed out that where the obligation to arbitrate arises through a statutory mandate such as §3020-a, the hearing officer's determination is subject to closer judicial scrutiny under CPLR 7511(b) than it would otherwise receive. Here the parties were required to arbitrate the disciplinary action as mandated by statute. In the words of the Appellate Division, "An award in a compulsory arbitration proceeding must have evidentiary support and cannot be arbitrary and capricious."

Further, in an Article 75 review of the hearing officer's determination the court considers "whether the decision was rational or had a plausible basis" but, as the Court of Appeals held in Matter of Berenhaus v Ward, 70 NY2d 436, when reviewing compulsory arbitrations in §3020-a proceedings the court should accept the hearing officer's credibility determinations, even where there is conflicting evidence and room for choice exists.

Finding that the hearing officer's determination has evidentiary support and was not arbitrary and capricious, the Appellate Division held that Johnson [1] was provided with adequate notice of the charges that was reasonably specific and in light of all the relevant circumstances Johnson [2] was apprised of charges against him sufficient "to allow for the preparation of an adequate defense."

As to the penalty imposed by the hearing officer, termination, the Appellate Division said that the penalty of termination "was not irrational or shocking to one's sense of fairness." 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08021.htm

The statute of limitations set out in Civil Service §75(4) does not control where the charges alleged would, if proved in a court, constitute a crime

The statute of limitations set out in Civil Service §75(4) does not control where the charges alleged would, if proved in a court, constitute a crime

Snowden v Village of Monticello, 2018 NY Slip Op 08226, Appellate Division, Third Department

In July 2016 the Village of Monticello's Building Inspector and Code Enforcement Officer [Petitioner], was served with a notice and statement of disciplinary charges pursuant to §75 of the Civil Service Law. Charge 1 alleged that Petitioner had "committ[ed] acts constituting crimes," related to "the unauthorized demolition of a building in October 2013, and the failure to properly abate the asbestos contained therein."* Petitioner denied the allegations and contended that Charge 1 as untimely, citing Civil Service Law §75(4). 

In September 2016, following a hearing, the §75 Hearing Officer found that Charge 1 was not time-barred and was supported by substantial evidence. The Hearing Officer recommended the appointing authority impose termination of Petitioner from his position as the penalty. Adopting the findings and recommendation of the Hearing Officer, the appointing authority terminated Petitioner's employment with the Village.

Petitioner commenced an CPLR Article 78 proceeding seeking a court order annulling the appointing authority's determination. Supreme Court transferred the matter to the Appellate Division. 

Petitioner's primary contention on appeal was that Charge 1 should have been dismissed as untimely.

The Appellate Division noting that although §75(4) provides that "no removal or disciplinary proceeding shall be commenced more than eighteen months after the occurrence of the alleged incompetency or misconduct complained of and described in the charges, observed that "this limitations period does not apply 'where the incompetency or misconduct complained of and described in the charges would, if proved in a court of appropriate jurisdiction, constitute a crime.'"

§75.1 Specification 1 of Charge 1 incorporated the allegations set out in Petitioner's related nine-count criminal indictment stemming from the same underlying conduct and events. Rejecting Petitioner's assertions to the contrary, the Appellate Division said that — by statutory directive — its inquiry was "limited to the allegations contained in the charges and specifications, without consideration of the proof or papers submitted in Petitioner's subsequent judicial proceeding (or at any ensuing disciplinary hearing) challenging the charges as untimely."

The court then explained that in count 8 of the criminal indictment Petitioner was alleged to have "knowingly, unlawfully and intentionally engage[d] persons to effect the unauthorized demolition of the [building], knowing that unabated asbestos was located therein or thereupon, causing the release of a substance hazardous to public health, safety or the environment, said substance being asbestos." If proven, said the court, these allegations would constitute the crime of endangering public health, safety or the environment in the fourth degree (see ECL 71-2711[3]."

Further, said the Appellate Division, count 9 alleges that Petitioner, "with regard to the demolition of the building, ... "engag[ed] persons neither certified nor qualified to abate the asbestos located therein, . . . knowing that asbestos was located therein, such demolition having been performed without asbestos abatement or any reasonable procedure to prevent the release of asbestos into the public air, . . . [and] having released a considerable amount of [asbestos] dust and debris into the air" in a populated area." These allegations, said the court, would, if proven at trial, constitute the crime of criminal nuisance in the second degree, citing Penal Law §240.45[1]. 

The Appellate Division further found that "the allegations against [Petitioner] as detailed in counts 5 through 7 would constitute, if established at trial, official misconduct," citing Penal Law §195.00[2].

Thus, said the court, the Hearing Officer properly found that the charge is not time-barred within the meaning of Civil Service Law §75[4].

As to Petitioner's argument that the appointing authority's determination should be annulled as unsupported by substantial evidence, the court said the appointing officer's determination to terminate Petitioner's employment pursuant to Civil Service Law §75 must be sustained if supported by substantial evidence. In conducting its review the Appellate Division, the court cited Matter of Longton v Village of Corinth, 57 AD3d 1273, leave to appeal denied 13 NY3d 709, and said "this Court may not substitute its own judgment for that of [appointing authority], even when evidence exists that could support a different result." Further, in the event there is conflicting evidence, the Appellate Division said it must defer to the Hearing Officer's credibility determinations.

Finding that there was substantial evidence in the record to support finding Petitioner guilty of the charges served upon him pursuant to §75 alleging that he had committed acts of misconduct that constituted crimes," the Appellate Division sustained the appointing authority's decision to impose the penalty of termination of Petitioner's employment.

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* The Appellate Division had previously issued a decision in the related criminal appeal (See People v Snowden, 160 AD3d 1054). 

The Village of Monticello decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08226.htm

Court denies educator's motion to rescind a settlement agreement resolving a disciplinary action because the educator had a change of mind

Court denies educator's motion to rescind a settlement agreement resolving a disciplinary action because the educator had a change of mind

Nobile v Board of Educ. of the City Sch. Dist. of the City of N.Y., 2018 NY Slip Op 08065, Appellate Division, First Department

Philip Nobile, a former tenured teacher employed by the New York City Department of Education [DOE], sought to rescind a stipulation with DOE settling disciplinary charges brought against him. The stipulation, signed by Nobile, his attorney, and DOE's attorney on October 7, 2016, provided that in exchange for DOE's agreement to discontinue the disciplinary hearing on the pending misconduct charges and to take no further disciplinary action against Nobile while Nobile agreed "to irrevocably retire from his employment with [DOE], effective close of business January 31, 2017."

Annexed to the stipulation was a letter signed by Nobile addressed to the District Superintendent stating, "I hereby irrevocably retire from [DOE], effective close of business January 31, 2017." The stipulation contained a signature line for the Superintendent, who signed it several days later. However before the Superintendent signed the stipulation Nobile notified DOE that he had changed his mind and wanted to rescind the stipulation. When DOE rejected Nobile's efforts to rescind the stipulation, Nobile sued. Supreme Court dismissed Nobile's the complaint and granted DOE's motion to dismiss the complaint, which actions were unanimously affirmed by the Appellate Division.

Although Nobile argued that the stipulation was unenforceable when he changed his mind because not all the parties had signed it, the Appellate Division held that "[t]his argument is unavailing." The court explained that the stipulation signed by Nobile and the attorney acting on behalf of DOE is binding under general contract principles, citing Hallock v State of New York, 64 NY2d 224, as Nobile failed to show that there was fraud, collusion, mistake or accident with respect to the execution of the settlement by Nobile, or that DOE's counsel lacked DOE's consent to enter into the stipulation. Nor, said the Appellate Division, was Nobile's parol evidence, offered to show that the parties did not intend to be bound by the stipulation until the Superintendent had signed it, admissible to add to or vary the terms of the writing.

As Nobile's agreement to retire was irrevocable, and he understood its consequences, his change of mind is not a cause sufficient to set aside his agreement to the stipulation  (see Barclay v Citibank, N.A., 136 AD3d 551, lv to appeal dismissed 27 NY3d 1077).

Nor was Nobile's parol evidence, offered to show that the parties did not intend to be bound by the stipulation until the Superintendent had signed it, admissible to add to or vary the terms of the writing.

A similar result applies with respect to an employee's attempting to withdraw his or her resignation.

Smith v Kunkel, 152 AD2d 893, concerned the issue of an employer’s refusal to permit an employee to withdraw a resignation following its delivery to the appropriate appointing authority.

Smith, a permanent state employee with the State Division of Equalization and Assessment, submitted his resignation for “personal reasons.” The resignation was dated August 21 and was to take effect the following September 3.

On August 29 Smith wrote the Division “seeking to withdraw and rescind” his resignation. Kunkel, the Division’s Administrative Officer, noting that the resignation had been “accepted on August 21,”* refused to approve Smith’s request to withdraw his resignation, citing 4 NYCRR 5.3(c) of the Rules for the Classified Service.**

Further, §5.3 of the Rules provides that if an effective date is specified in the resignation it takes effect on that date; if no date is specified it takes effect “upon delivery or filing in the office of the appointing authority.” 4 NYCRR 5.3 tracks Public Officers Law §31.2 as to the submission of resignations by public officers.

Under the Rules, however, the appointing authority may disregard the resignation in the event disciplinary charges have been filed, or are about to be filed, against the employee and proceed with the disciplinary action notwithstanding the receipt of the resignation.

Finally, the ruling in Silverman v McGuire, 51 NY2d 228, suggests that where the appointing authority makes the final determination with respect to approving the terms and conditions of a stipulation settling a disciplinary action it would be prudent for:

1. The employer’s representative to insist that any settlement of a disciplinary action include a statement to the effect that the settlement is subject to the approval of the appointing authority; and

2. The employee or the employee’s representative to insist on a provision spelling out what is to happen if the appointing officer does not agree to imposed the penalty set out in the settlement proposal.

* Except were otherwise provided by law, all that is required for a resignation to become operative is its delivery to the appointing authority; approval or acceptance of the resignation is not required for the resignation to take effect [Hazelton v Connelly, 25 NYS2d 74]. At most, all that an appointing authority might do is to “acknowledge the receipt” of the employee’s resignation.

** 4 NYCRR 5.3(c) applies to employees of the State as the employer. Many local civil service commissions and personnel officers have adopted a similar rule.

The Nobile decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_08065.htm