Municipal audits released by the State Comptroller during the week ending March 26, 2021

On March 26, 2021 New York State Comptroller Thomas P. DiNapoli announced the following local government audits have been issued: 

Click on the text in color to access the full text of the audit. 

City of Johnstown – Information Technology (Fulton County)  City officials did not adequately safeguard information technology (IT) resources to ensure personal, private and sensitive information (PPSI) was protected. The failure to protect PPSI can have significant consequences on the city, such as reputation damage, lawsuits, a disruption in operations or a security breach. Auditors determined that city officials did not develop adequate IT policies and procedures or provide IT security awareness training. City officials did not have a complete and accurate IT asset inventory. They also did not properly manage user accounts or ensure unneeded administrative and user accounts were disabled. Sensitive IT control weaknesses were communicated confidentially to officials.

 

City of Johnstown – Financial Management (Fulton County)  City officials did not maintain accurate and complete financial information to adequately manage operations. The treasurer did not maintain accurate accounting records. The treasurer filed the required annual financial reports late for fiscal years 2016 and 2017 and did not file the reports for 2018 or 2019 as of Dec. 2, 2020. Without accurate financial records, the common council did not have accurate financial information to monitor the city’s financial condition, and does not know the city’s current financial condition. The council also did not adequately plan and monitor emergency medical services financial operations. As a result, the city could lose out on significant revenue.

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Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 180,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.

 

 

Determining eligibility for a two-year leave of absence on Workers' Compensation Leave as the result of an alleged assault sustained in the course of employment

§71 of the Civil Service Law, as relevant in this action, provides that in the event "an employee has been separated from the service by reason of a disability resulting from occupational injury or disease as defined in the [New York State's Workers' Compensation Law,] he or she shall be entitled to a leave of absence for at least one year, unless his or her disability is of such a nature as to permanently incapacitate him or her for the performance of the duties of his or her position."

§71 further provides that "where an employee has been separation from the service by reason of a disability resulting from an assault sustained in the course of his or her employment, he or she shall be entitled to a leave of absence for at least two years, unless his or her disability is of such a nature as to permanently incapacitate him or her for the performance of the duties of his or her position."

The employee [Plaintiff] in this CPLR Article 78 action was a correction officer and suffered injuries inflicted by a combative inmate. Plaintiff was able to work for a few days after the incident but then did not report to work, was placed on workers' compensation leave, and has since remained continuously out of work. The Appointing Authority [Employer] subsequently notified Plaintiff that her employment would be terminated* as her absence from employment at that point in time exceeded one cumulative year of absence.

Plaintiff objected to the termination and requested that she be granted a two-year leave of absence based on "the inmate's assaultive behavior." The Employer rejected Plaintiff's request and terminated. Plaintiff appealed, contending that she was entitled to a two-year leave of absence as a matter of law as she was the victim of an assault by an inmate in the course of her performing the duties of her position.

The Appellate Division's decision noted that the Employer defines the term assault as "an intentional physical act of violence directed towards an employee by an inmate or parolee." while, in contrast, Plaintiff contends the definitions of assault set forth in Penal Law §§120.00(1) and 120.0 (1), (3) and (7) should control.

Citing Morales v New York StateDept. of Corr. & Community Supervision, 2021 NY Slip Op 01459, the Appellate Division opined that while the record indicates that the inmate was combative and struck another correction officer, there is no indication that Plaintiff's injury resulted from the inmate's "intentional physical act of violence directed towards [her]".

Under the facts presented, the Appellate Division said it concluded that the Employer's determination was not arbitrary and capricious or irrational and sustained the Employer's determination.

* A termination pursuant to §71 is not pejorative as the individual may, within one year after the termination of the disability, apply to the civil service commission having jurisdiction for a medical examination and if certified as physically and mentally fit to perform the duties of his or her former position, he or she is be reinstated to his or her former position, if vacant, or to a vacancy in a similar position or a position in a lower grade in the same occupational field, or to a vacant position for which he or she was eligible for transfer. If no appropriate vacancy which reinstatement may be made is available, the name of individual is placed on a preferred list and he or she is eligible for reinstatement from such preferred list for a period of four years.

Click HERE to access the full text of the Appellate Division's decision.

 

Determining a reasonable disciplinary penalty to be imposed on the employee "under the circumstances"

The petitioner [Plaintiff] in this CPLR Article 78 action challenging his termination from his position after being found guilty of disciplinary charges brought against him alleging "gross misconduct-falsification of business records." The Appellate Division, after granting Plaintiff's petition to review the penalty imposed by the Employer [Appointing Authority], remitted the matter to the Appointing Authority for the imposition of a lesser penalty.*

The Appointing Authority did, in fact, imposed a lesser penalty: demotion to a lower grade position. Plaintiff sought review of this new penalty. 

Supreme Court vacated the penalty of demotion and imposed a still lesser disciplinary penalty, a 30-day suspension without pay. Supreme Court further directed that Plaintiff "be restored to his prior position" and remitted the matter to the Appointing Authority to calculate the "back salary and lost compensation" owed to the Plaintiff. The Appointing Authority appealed the Supreme Court's ruling to the Appellate Division.

The Appellate Division, citing Matter of Waldren v Town of Islip, 6 NY3d 735 and other court decisions, explained that an "administrative penalty must be sustained unless it is so disproportionate to the offense as to be shocking to one's sense of fairness, thus constituting an abuse of discretion as a matter of law." 

The court then opined that an administrative penalty is shocking to one's sense of fairness "if the sanction imposed is so grave in its impact on the individual subject to it that it is disproportionate to the misconduct, incompetence, failure, or turpitude of the individual, or to the harm or risk of harm to the agency or institution, or to the public generally visited or threatened by the dereliction of the individual."

Sustaining the Supreme Court determination that the new penalty imposed by the Appointing Authority "was again shocking to one's sense of fairness," the Appellate Division observed that "[t]he penalty of demotion by four salary grades, resulting in an approximate 37% decrease in salary, was so grave in its impact on the [Plaintiff] that it was disproportionate to the misconduct" involved.

In mitigation of imposing the penalty of demotion the court opined that Plaintiff, "had never, in his more than 20-year career with the [agency], been subject to discipline before he was found guilty of the instant offense, and had received positive work performance reviews." In addition, the Appellate Division noted that the Plaintiff was in poor health "when he committed the subject act of misconduct."

Under the particular circumstances of this case, however, the Appellate Division ruled that the reduced penalty imposed by the Supreme Court "was inadequate to address the gravity of the [Plaintiff's] misconduct and the resulting harm to the appellants and the public." Vacating the imposition of a penalty of a 30-day suspension without pay, the Appellate Division remitted the matter to the Appointing Authority "for the imposition of a penalty of one-year suspension without pay."

* See Matter of Sullivan v County of Rockland, 150 AD3d 743.

Click HEREto access the text of the Appellate Division's decision in this matter.

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A Reasonable Disciplinary Penalty Under the Circumstances - A 442-page e-book focusing on determining an appropriate disciplinary penalty to be imposed on an employee in the public service in instances where the employee has been found guilty of misconduct or incompetence. Click on http://booklocker.com/books/7401.html  for more information.

 

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued on March 22, 2021.

The following audits were issued by the New York State Comptroller March 22, 2021:

Click on the text highlighted in color to access the complete audit report.

MUNICIPAL AUDITS

On March 22, 2021 New York State Comptroller Thomas P. DiNapoli announced the following local government audits have been issued.

 

Town of Adams – Justice Court Operations (Jefferson County)

Overall, auditors found court funds were properly recorded, deposited and reported during our audit period. Corrective actions were recommended, however, after auditors found the board’s annual audit of the justices’ books and records is inadequate because it primarily relies on the clerk to perform the review procedures. Also, auditors found none of the justices prepared monthly accountabilities or bank reconciliations. In addition, cash in a retired justice’s bank account exceeded known liabilities by a total of $1,104.

 

Andes Joint Fire District – Financial Activities (Delaware County)

The Board of Fire Commissioners (Board) did not establish adequate controls over cash receipts and disbursements. The board did not segregate duties or provide additional oversight over receipts and disbursements to ensure the treasurer recorded all transactions accurately and timely. The board did not comply with New York State Town Law (Town Law) Section 176. Thirty debit card purchases totaling $4,680 were not audited and approved before payment.

 

Davenport Fire District – Financial Activities (Delaware County)

District officials have not established adequate controls to ensure that financial activities are properly recorded and reported, and cash is safeguarded. There were no records to support the collection of hall rental receipts. As a result, the Board of Fire Commissioners (Board), the district’s treasurer (Treasurer) or auditors are unable to verify whether all hall rental receipts were collected and deposited in a district bank account.

 

City of Hornell – Foreign Fire Insurance Funds (Steuben County)

Officials did not adopt policies and procedures guiding the handling of foreign fire insurance (FFI) tax money and provide oversight to ensure accurate records were maintained, and adequate supporting documentation and approvals were obtained. The Chamberlain did not maintain custody of the FFI tax money. The fire chief was solely responsible for disbursing, recording and reporting all transactions related to FFI tax money.

 

Village of Mayville – Online Banking (Chautauqua County)

Online banking transactions that were reviewed were appropriate, properly supported and authorized, however the board should ensure transactions are secure. The board did not adopt a written online banking policy or implement adequate procedures to monitor and control online banking transactions.

In addition, a dedicated computer was used for online banking but authorized users were not provided with security awareness training.

 

Village of Poquott – Justice Court Operations (Suffolk County)

The Justice Court did not properly account for court funds. The Justice was unaware that in August 2016, the court clerk deposited $6,525 belonging to a neighboring village’s justice court for which she also worked. The error was corrected in October 2016 when she transferred the money between two accounts. The justice was unaware that the court clerk filed 11 of 15 monthly reports of money collected (73 percent) to the JCF after the due date. On average, reports were 14 days late.

 

Town of Wappinger – Recreation Department Cash Receipts (Dutchess County)

Town officials did not develop adequate policies and procedures over department cash collections and did not ensure that cash is deposited timely. Officials did not provide adequate oversight of the department cash receipts process and the duties of the recreation director (Director), and department staff responsibilities were inadequately segregated. Department staff did not deposit 543 collections totaling $42,861 (composed of cash and checks) within 10 days, as required. For example, in July 2019, one deposit (composed of $3,085 in cash and $10,810 in checks) was deposited between 11 and 69 days after the collections.

 

SCHOOL DISTRICT AUDITS

New York State Comptroller Thomas P. DiNapoli today announced the following school district audits were issued on March 22, 2021.

Dryden Central School District – Information Technology (Cortland County, Tioga County and Tompkins County)

The Board and District officials did not adequately safeguard personal, private and sensitive information (PPSI). Officials did not ensure information technology (IT) existing policies were enforced (or enforceable). In addition, officials did not ensure IT policies were up-to-date with current technology changes. User accounts were not regularly reviewed and unnecessary accounts were not disabled.  Officials did not maintain up-to-date IT asset inventory records or enter into adequate written contracts with all IT service providers.

 

Whitesboro Central School District – Separation Payments (Herkimer County and Oneida County)

District officials did not ensure that separation payments are accurately calculated, supported and disbursed. Auditors questioned payments to three employees totaling $108,963. District officials paid two former administrators separation payments totaling $66,368 that were not supported by their individual employment contracts and were based on a board resolution adopted over 20 years before their contracts were approved.  District officials also, allowed a former assistant principal to retire early and receive a $42,595 separation payment and post-employment health benefits that he otherwise would not have been eligible for based on the collective bargaining agreement.

 

Wyoming Central School District – Professional Services (Genesee County and Wyoming County)

District officials did not always use a competitive method to procure professional services or enter into written agreements with service providers. The district paid 11 professional service providers a total of $189,000 without using requests for proposals (RFPs) as required by the district’s procurement policy.

 

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Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 180,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.

 

Computer technology and the law

Recent articles by Rochester, New York, attorney Nicole Black posted on the Internet addressing the use of computer technology and the law.

● Round Up: Document Assembly Software, Legal Tech Adoption, and Cybersecurity

● N.Y. Bar opines on online lawyer-client matching services

● The importance of technology competence when communicating electronically

● Round Up: Law Practice Management Software, Clubhouse, Remote Work Ethical Guidance & More

● The internet is forever, so behave accordingly

Ms. Black posts a law blog, Sui Generis, at https://nylawblog.typepad.com/suigeneris/