Audits released by the New York State Comptroller during the week ending May 17, 2020

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued during the week ending May 17, 2020.

Office of Addiction Services and Supports (OASAS): Problem Gambling Treatment Program (Follow-Up) (2020-F-5) An audit issued in February 2019 found since 2006, OASAS had not conducted a comprehensive needs assessment or social impact study to identify the number or location of individuals in need of problem gambling treatment services. As such, the audit was unable to determine whether OASAS had a sufficient number of treatment programs available for problem gamblers or whether OASAS’ limited resources were applied where they were needed most. In a follow-up, auditors found OASAS implemented both recommendations contained in the initial report.

Division of Criminal Justice Services: Monitoring and Administration of Public Protection Grant Programs (2019-S-21) The division’s administration and monitoring of the grant programs reviewed were adequate to ensure that the related grant expenses were supported and allowable. Of the $3.1 million in combined grant expenditures auditors reviewed from the three years ended Dec. 31, 2019 (of $57.3 million expended during the period), they identified one exception related to a grantee’s payments of confidential funds, some of which, totaling $1,652, lacked documentation of approval or receipt.

Gaming Commission: Equine Health and Safety (Follow-Up) (2019-F-49) An audit issued in November 2018 found that the commission had implemented measures to improve its practices to promote equine health and safety. However, auditors determined the commission could better document its daily operating policies and procedures; improve how information is recorded in the Equine Breakdown, Death, Injury and Incident Database; and ensure adherence to drug testing requirements. In a follow-up, auditors determined commission officials have made limited progress in correcting the problems identified in the initial report, and additional action is still needed. 

Department of Health, Medicaid Program: Opioid Prescriptions for Medicaid Recipients in an Opioid Treatment Program (Follow-Up) (2019-F-53)  An audit released in November 2018 identified 18,786 recipients who received 208,198 opioid prescriptions through the Medicaid program while also receiving opioids as part of a Treatment Program for opioid use disorder. These recipients may have received inappropriate, unnecessary, and/or dangerous prescriptions if treatment programs did not check the computer database and, where authorized, coordinate care with other prescribers. In a follow-up, auditors found DOH officials made significant progress in addressing the problems identified in the initial audit.

Division of Military and Naval Affairs (DMNA): Internal Controls Over Selected Financial Operations (2018-S-66) An agreement between DMNA and the federal National Guard Bureau (NGB) allows DMNA to be reimbursed by NGB for expenses it incurs in operations and training of the State Army and Air National Guard. Auditors found weaknesses in DMNA’s handling of reimbursement requests to NGB resulted in nearly $1.27 million in lost reimbursements. Auditors also found significant weaknesses in DMNA’s controls over accounting for employee credit card purchases. 

New York City Department of Social Services (DHS): Oversight of Selected Fiscal Aspects of Homeless Shelter Services (Follow-Up) (2019-F-54) An audit issued in October 2017, found that DHS lacked internal controls over the shelter contract procurement and rate-setting process. There were no written standard operating procedures for key aspects of the procurement process, and auditors could not determine whether shelter rates were reasonable. In a follow-up, auditors found DHS has made progress in addressing the issues identified in the initial report.

State Education Department (SED): Parsons Child and Family Center: Compliance With the Reimbursable Cost Manual (2019-S-25) Parsons is an SED-approved special education provider located in Albany County. Parsons is reimbursed for these services through rates set by SED. For the fiscal year ended June 30, 2015, auditors identified $247,699 in ineligible costs that Parsons reported, including $188,149 in overstated expenses that resulted from Parsons misreporting revenue that should have been offset against program expenses.  

State Education Department: Oversight of Chronic Absenteeism (Follow-Up) (2019-F-57) An audit issued in September 2018 identified risks to the implementation of the Department’s chronic absenteeism initiatives that could negatively affect progress toward the Department’s goals of increased student engagement and achievement. In a follow-up, auditors found SED made significant progress in addressing the problems identified in the initial audit report.

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Employee's refusal to attend employer's mandatory "sensitivity" training program constituted insubordination

The New York City Department of Social Services Human Resources Administration [HRA] brought disciplinary charges against a job opportunity specialist [JOS], alleging he committed insubordination by repeatedly refusing to attend mandatory Lesbian, Gay, Bisexual, Transgender, Questioning, and Intersex (“LGBTQI”) training.

JOS testified and identified himself as a Southern Baptist Christian and quoted Bible excerpts that disapproved of homosexuality and insisted that he refused to attend the training because of his religious beliefs, but that he had no problem serving LGBTQI clients.

OAYH Administrative Law Judge Kevin F. Casey found that HRA established a compelling need for the training program, and found that HRA issued orders to JOS to attend, which he was required to obey, and sustained the insubordination charge.

HRA sought a 45 day suspension without pay. Judge Casey noted that JOS had no prior disciplinary record and found a 45-day suspension to be excessive and inconsistent with principles of progressive discipline, and instead recommended a 10 day suspension.

The decision is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/20_cases/20-1094.pdf

Applying the tests to determine the viability of unlawful discrimination claims set out in McDonnell Douglas Corp. v. Green

In this action the Circuit Court of Appeals, Second Circuit, reviewed the Petitioner’s hiring discrimination claim in accordance with the McDonnell Douglas* "burden-shifting" inquiry protocols. 

Petitioner had appealed the decision and order of the United States District Court dismissing his claims brought under the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101, et seq., [ADA] and granting summary judgment in favor of School District and its Board of Education [School District]. The Circuit Court of Appeals reviewed the district court's decision de novo and determined that the lower properly concluded that there was no genuine dispute as to any material fact and that School District was entitled to judgment as a matter of law.

Petitioner, a former School District employee, had brought two causes of action against the School District under the ADA, alleging (1) employment discrimination based on his prior illness; and (2) employment discrimination based on a perceived disability.

Assuming that Petitioner had met his minimal burden of establishing a prima facie case of unlawful discrimination, the court indicated that the burden of proof shifted to the School District to articulate a legitimate, non-discriminatory reason for its hiring decisions. The court found that School District had met its burden by demonstrating its long-standing practice of preferring current employees when selecting candidates for open positions.

The burden of going forward then shifted back to the Petitioner to demonstrate that the School District’s explanation was mere pretext “unworthy of consideration” or persuade the court that a discriminatory reason more likely than not motivated School District's decision.

The court said that there was no dispute that due to his many years of experience Petitioner was qualified for the positions. Here, however, the School District’s hiring policy was viewed as placing greater value on promoting and transferring current employees within the School District rather than simply considering "experience."

As Petitioner conceded that the School District’s policy was applied consistently and failed to show that any outside applicant, disabled or otherwise, was hired instead of him, the Circuit Court concluded that the School District documented a nondiscriminatory motive for not offering Petitioner reemployment.

Petitioner also contended that School District was “biased” against him because he had filed a workers’ compensation claim during the course of his employment and, in addition, alleged that his direct supervisor encouraged him to retire.

The court said that the “record is barren of any evidence" that School District failed to hire him because he filed a workers’ compensation claim at some point in time before he retired. Accordingly the Circuit Court opined that Petitioner “failed to show a causal connection between his application for workers’ compensation benefits and the School District’s hiring decision.**

Addressing an issue Petitioner raised for the first time on appeal -- School District had breached its contractual duties by failing to hold his position open while he recovered from his disability -- the Circuit Court explained that, subject to certain exceptions not here relevant, it is a “well-established general rule is that an appellate court will not consider an issue raised for the first time on appeal.” ***

Insofar as Petitioner’s claims that School District’s failure to hold his position open while he was recovering from his disability constituted a breach of contract, the court noted “a timing issue,” explaining that under New York law a breach of contract action is subject to a six-year statute of limitations. Citing §3813(2–b) of New York State’s Education Law, the Circuit Court pointed out that a lawsuit against a Board of Education is subject to a one-year statute of limitations. As a cause of action for breach of contract accrues and the statute of limitations commences when the contract is breached and Petitioner did not file suit within one year of the alleged breach, the Circuit Court opined that his breach of contract claim was untimely.

* McDonnell Douglas Corp. v. Green, 411 U.S. 792.

** However, said the court, were it to have departed from this rule, such newly raised claims were either time-barred or lacking in merit.

*** Taking the allegation as true, the court noted that this conversation took place two years before the alleged failure to hire and opined that “The lack of temporal proximity, combined with the isolated nature of the comment, does not give rise to an inference of discrimination."

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/f07b7692-fa5e-4753-a233-7cbc5c21bdab/2/doc/18-3282_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/f07b7692-fa5e-4753-a233-7cbc5c21bdab/2/hilite/

Commissioner of Education will not consider aspects of an appeal concerning the Family Educational Rights and Privacy Act or the New York State's Public Meetings Law

Petitioners in this appeal to the Commissioner of Education included allegations the school board's policy violated the privacy protections provisions of the Family Educational Rights and Privacy Act [FERPA] and Education Law §2-d.  Petitioners also argue that the board of education violated New York State's Public Meetings Law by having certain discussions in executive session.

The school board contended that the petition must be dismissed because the Commissioner lacks jurisdiction over FERPA claims and Open Meetings Law claims.  The school board also asked the Commissioner to issue Certificates of Good Faith in accordance with Education Law §3811.

Citing 20 USC §1232g, the Commissioner agreed that to the extent Petitioners allege that the school board's  violated FERPA, "the Commissioner [of Education] lacks jurisdiction to consider FERPA claims," explaining that the United States Secretary of Education, not the Commissioner, has jurisdiction over alleged FERPA violations.

As to Petitioners complaint with respect to allege violations of the Open Meetings Law, the Commissioner observed that Public Officers Law §107 vests exclusive jurisdiction over complaints alleging violations of the Open Meetings Law in the Supreme Court of the State of New York, and alleged violations thereof may not be adjudicated in an appeal to the Commissioner.

Turning to the request that the Commissioner issue a certificate of good faith pursuant to Education Law §3811(1), the Commissioner noted that such certification "is solely for the purpose of authorizing the board to indemnify respondents for legal fees and expenses incurred in defending a proceeding arising out of the exercise of his or her powers or performance of duties as a board trustee."

As it is appropriate to issue such certification unless it is established on the record that the requesting board trustee member acted in bad faith, the Commissioner opined that in view of this decision, and the fact that there has been no finding that the board members involved acted in bad faith, the board members involved are entitled to a certificate of good faith.

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume59/d17821

Probationary employee absent from work because of an off-duty accident terminated from the position

An employee [Probationer] terminated from his position prior to the completion of his probationary period "due to his extended absence from work" initiated a CPLR Article 78 proceeding seeking court review of the determination of the appointing authority dismissing him from the position. Supreme Court dismissed Probationer's petition and Probationer appealed the court's ruling.

The Appellate Division sustained the Supreme Court's decision, explaining that "A probationary employee may "be dismissed for almost any reason, or for no reason at all". In the words of the court, citing Matter of Yonkers Firefighters v City of Yonkers, 165 AD3d 816, "The employment of a probationary employee may be terminated without a hearing and without a statement of reasons in the absence of a demonstration that the termination was [made] in bad faith, for a constitutionally impermissible or an illegal purpose, or in violation of statutory or decisional law."

The genesis of Probationer's termination was his suffering injuries in a car accident while off-duty that prevented him from working. The Appellate Division found that although Probationer's absences were due to his injuries suffered in an off-duty car accident,* the appointing authority's termination of probationer's employment on this basis was not made in bad faith, for a constitutionally impermissible or an illegal purpose, or in violation of statutory or decisional law.

The court rejected Probationer's contention that the appointing authority should be estopped from terminating his employment based on its alleged promises that Probationer had one year to return to work following his injury or, in the alternative, because incorrect information had been given to Probationer with respect to his reinstatement, noting that "[e]stoppel is generally not available against a municipal defendant with regard to the exercise of its governmental functions or its correction of an administrative error."

* Section 72 of the Civil Service Law, Leave for ordinary disability, provides that an employee placed on leave by an appointing authority pursuant §72.1 may "within one year after the date of commencement of such leave of absence, or thereafter at any time until his or her employment status is terminated, make application to the civil service department or municipal commission having jurisdiction over the position from which such employee is on leave, for a medical examination by a medical officer selected for that purpose by such department or commission." In the event an employee placed on §72 leave is terminated from his position pursuant to §73 of the Civil Service Law, he may apply for reinstatement within one year of his recovery from the disability. Presumably the appointing authority had not placed Probationer on leave pursuant to §72.1.

The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2020/2020_02608.htm