Audits and reports issued during the week ending April 30, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending April 30, 2021.

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

MUNICIPAL AUDITS

Brighton Fire Department, Inc. – Board Oversight of Financial Operations (Monroe County) The board did not provide adequate oversight of financial operations. The department lacked detailed financial procedures and the board did not enforce compliance with existing bylaw and policy provisions. They also did not present the statutorily-required annual directors’ report or any interim financial information to the membership. Of 220 disbursements reviewed totaling $545,658, 155 (70 percent) totaling $190,160 did not have documented approval and 93 (42 percent) totaling $92,605 did not have adequate supporting documentation.

Brighton Fire District – Non-Payroll Disbursements (Monroe County) District officials did not ensure non-payroll disbursements were properly procured, approved or adequately supported. Of 97 disbursements tested totaling $1.13 million, seven disbursements totaling $568,648 lacked adequate documentation. Of 19 professional service providers paid $769,931 in 2019, officials did not seek competition or provide documentation that competition was sought for 11 totaling $133,567. The district may have saved about $7,100 for meals and lodging if the United States General Service Administration per diem rates were used. The financial software allowed changes to transaction data without approval and officials did not use available software controls to further safeguard transactions.

Town of Marcy – Justice Court Operations (Oneida County) The justices generally provided adequate oversight of court financial activities and ensured collections were deposited timely and intact and were properly reported and remitted. However, the justices did not document their review of the clerk’s monthly bank reconciliations and accountabilities. They did not ensure the court clerk properly handled or made reasonable efforts to collect payment on 12 pending traffic tickets (30 percent) of 40 tickets tested. The justices also did not ensure the court was using the most up-to-date and secure recordkeeping software.

Town of Milo – Financial Condition (Yates County) The board did not effectively manage the town’s financial condition. More real property taxes and user fees were levied than needed to fund operations. The board did also not adopt realistic budgets for each of its funds from 2017 through 2020, multiyear financial and capital plans or the following policies in fund balance, reserve and budgeting. As of December 31, 2020, the general, highway and water funds unrestricted fund balances were excessive, ranging from 97 percent to 178 percent of 2020 expenditures.

Town of New Windsor – Information Technology (Orange County) Town officials did not ensure information technology systems were adequately secured and protected against unauthorized use, access and loss. Officials did not provide employees with cybersecurity training. They did not have a disaster recovery plan. In addition, officials did not ensure online banking agreements comply with New York State General Municipal Law. Sensitive IT control weaknesses were communicated confidentially to officials.

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New York State Comptroller Thomas P. DiNapoli's analysis of New York State's 2021-2022 budget is posted on the Internet

The Enacted State Budget for New York State's Fiscal Year* [SFY] 2021-22 is boosted by a substantial influx of new resources, totaling an estimated $26.7 billion in SFY 2021-22. These resources include federal support, better-than-expected tax collections, revenues from tax increases, and other new resources, resulting in the largest budget in state history at an estimated $212 billion, according to an analysis released on April 29, 2021 by New York State Comptroller Thomas P. DiNapoli.

“The American Rescue Plan provided fiscal relief to the state and local governments, school districts and transit systems at a critical time,” DiNapoli said. “While the Enacted Budget makes important investments in education, health care and other important areas, it’s critical to maintain a long-term view and ensure the state’s spending does not grow to unsustainable levels. Federal support is finite and there were missed opportunities in this budget to ensure the state is well-positioned to weather future emergencies and recessions.”

The American Rescue Plan will give $12.6 billion in fiscal relief to the state and additional funds for other programs to directly benefit New Yorkers. The budget will use $5.5 billion of federal aid in SFY 2021-22 and is required to use the rest by the end of 2024. Revenue actions including increases to top personal income tax rates and corporate franchise tax rates are expected to generate $3.7 billion in SFY 2021-22, growing to $4.8 billion by SFY 2024-25. Increases to the corporate franchise rates expire after 2023 while higher personal income tax rates will expire after 2027.

The new resources provide substantial funding for education and relief programs for struggling New Yorkers and industries. State funding for K-12 public school education is expected to grow by $1.4 billion annually, in addition to federal funding provided directly to districts. New programs, backed mostly by federal funds, include $2.4 billion for rent and homeowner relief, $2.4 billion for child care resources to aid providers and improve subsidies to low-income parents, and $1.6 billion in small business recovery grants and loans, including specific programs for restaurants, cultural establishments, and theater and musical productions.

DiNapoli noted there were also several chances to take steps to improve New York’s long-term fiscal position that were not acted upon. The state continued to defer up to a total of $3.5 billion in Medicaid payments and did not make any new deposits to statutory rainy day reserve funds, which remain at $2.5 billion. Despite a strong cash position, short-term borrowing was also reauthorized. And, for the second year, state leaders circumvented the state’s debt cap for debt to be issued in the coming year—with new state issuance likely to exceed the limits, rendering the cap meaningless.

In the coming weeks, the state Division of Budget will release an updated financial plan for SFY 2021-22 through SFY 2024-25 which will clarify the use and timing of federal aid, spending planned for future years, and the impact of revenue and expense actions on recurring budget gaps. DiNapoli said the financial plan should also provide detail on several risks, including the volatility and temporary nature of new tax revenues and the sustainability of spending on key programs.

*  Click HEREto access the full text of Comptroller DiNapoli's analysis.

 

The plaintiff's failure to file a timely notice of claim as required by Education Law §3813(1) will typically result in the granting of a motion to dismiss the complaint

§3813 of the Education Law sets out the procedures to be followed with respect to the filing of claims against the governing body of any school district in New York State and certain state supported schools.

Supreme Court granted the New York City Department of Education's [DOE] motion for summary judgment dismissing the Plaintiffs' action alleging DOE had unlawfully discriminate against them, finding that Plaintiffs had failed to file a timely "notice of claim" with DOE as required by §3813(1) of the Education Law.

Plaintiffs appealed the Supreme Court's ruling. The Appellate Division, however, sustained the lower court's decision, explaining:

1. Plaintiffs' argument relying on Margerum v City of Buffalo, 24 NY3d 721, and its progeny, was "raised improperly for the first time in [Plaintiffs'] reply brief on appeal;"

2. Were Margerum properly before the court, Plaintiffs' reliance on Margerum for the proposition that no notice of claim is required where the complaint alleges violations of the State and City Human Rights Laws is misplaced "where a notice of claim is required pursuant to Education Law §3813(1)"; and

3. The fact that the individually named defendants were not DOE officers is irrelevant with respect to the issue of whether DOE is within the ambit of §3813(1) notice of claim requirement.

Click HERE to access the Appellate Division's decision.

 

Seeking the removed of a member of a school board pursuant to the "continuing wrong doctrine"

In the course of a school board meeting a member of the school board held up a campaign postcard being distributed by the school district's teachers’ association which endorsed specific candidates running for seats on the board in the upcoming election and encouraged eligible residents of the school district to vote “Yes” for the budget. The member then stated "just an FYI ... the Teachers Association ... there’s their card ... they are pushing our budget so I’d like to thank them for that.” 

The Petitioner in this appeal to the Commissioner sought the removal of the board member for displaying the Association's postcard and his "FYI" statement, contending that the member had "violated board policy and the prohibition on electoral advocacy described in Matter of Phillips v. Maurer, 67 NY2d 672."

The Commissioner denied the Petitioner's application as untimely, noting that an appeal to the Commissioner must be commenced within 30 days from the making of the decision or the performance of the act complained of, unless any delay is excused by the Commissioner "for good cause shown."* Here, said the Commissioner, Petitioner served the petition and notice of petition on the board member 120 days after the event giving rise to Petitioner's application. 

Turning to Petitioner's contention that the "continuing wrong doctrine" applied in this instance, the Commissioner explained that the doctrine applies when the ongoing action is itself an unlawful action that results in a continuing violation of the law, such as the unlawful employment of an unqualified individual. Citing a number of earlier decisions of the Commissioner of Education, the Commissioner opined that doctrine does not apply where the specific action being challenged is a single discrete action, inaction or decision and the resulting effects are continuing but are not intrinsically unlawful.

The Commissioner then reminded the "respondents that, although a board of education may disseminate information 'reasonably necessary' to educate and inform voters, it may not use district resources to distribute materials designed to 'exhort the electorate to cast their ballots in support of a particular position advocated by the board,'" citing Matter of Phillips [supra].

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

N.B. The New York State Register dated April 28, 2021, reports the Education Department has filed proposed amendments of Parts 275, 276 and §277.1 of Title 8 NYCRR making certain technical changes and other clarifying amendments to Education Law §310 appeal procedures and requirements.

The text of proposed rule amendment and any required statements and analyses may be obtained from: Kirti Goswami, NYS Education Department, Office of Counsel, 89 Washington Avenue, Room 112 EB, Albany, NY, 12234, (518) 474-6400.

Data, views or arguments may be submitted to Julia Patane, Esq., NYS Education Department, Office of Counsel, 89 Washington Avenue, Room 112 EB, Albany, NY, 12234,  (518) 474- 6400.

Public comment will be received until  60 days after publication of this notice.

 

 

Defendants seeking summary judgment have the initial burden of demonstrating that the motion should be granted

A New York City police detective [Plaintiff] serving in the Police Department's Emergency Services Unit severely injured his eye while attempting to change the carbon dioxide cartridge of an animal tranquilizer gun. Plaintiff sought to recover damages for personal injuries against, among others, the City of New York and its Police Department, [City Defendants] under color of General Municipal Law §205-e,* and against NASCO, the distributor of the gun, alleging negligence and strict products liability predicated upon defective design and failure to provide adequate warnings.

The NASCO and the City Defendants appealed Supreme Court rejecting, in whole or in part, their various motions seeking summary judgment dismissing Plaintiff's claims. 

Addressing NASCO's and the City Defendants' respective appeals of Supreme Court's denial of their respective motions for summary judgment, the Appellate Division, after sustaining various elements of the Supreme Court's decision, noted the several failures of the defendants to meet their respective "initial burdens" that might otherwise have resulted in Supreme Court's granting all, or some, of their respective motions seeking summary judgment.

The Appellate Division decision provides a number of examples of the defendants failing to meet their respective "initial burdens" in its decision such as noting "NASCO's expert ... opined in mere conclusory fashion that the tranquilizer gun was 'appropriately designed' and 'did not ... contain any explanation of the gun's design, or any discussion of industry standards or costs.'" This, said the court, "was insufficient to affirmatively demonstrate, prima facie, that the gun was reasonably safe for its intended use."

The Appellate Division's decision is instructive as it identifies various elements that, if presented by NASCO and the City Defendants in their pleadings before the Supreme Court, might have had a different result, in whole or in part, with respect to their respective motions for summary judgment. 

* Subdivision 3 of §205-e provides "This section shall be deemed to provide a right of action regardless of whether the injury or death is caused by the violation of a provision which codifies a common-law duty and regardless of whether the injury or death is caused by the violation of a provision prohibiting activities or conditions which increase the dangers inherent in the work of any officer, member, agent or employee of any police department."

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