Audits and reports issued during the week ending June 26, 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 June 26, 2021.

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

 MUNICIPAL AUDITS

Brasher-Winthrop Consolidated Fire District – Board Oversight (St. Lawrence County) The board did not provide adequate oversight of district financial activities. The board did not establish compensating controls over the work of the treasurer, who was responsible for receiving and disbursing cash, signing district checks and maintaining the accounting records. The board also did not audit district claims prior to payment and conduct an annual audit of the treasurer’s records. In addition, the board did not ensure the treasurer filed required annual financial reports for 2017 through 2019 and they did not complete mandatory fiscal oversight training. Auditors reviewed all $44,227 disbursements made during the audit period and found that they were for proper district purposes.

City of Dunkirk – Billing Enforcement (Chautauqua County) The city treasurer did not properly enforce and the common council did not properly monitor delinquent water, sewer and tipping fee balances. The treasurer did not follow the enforcement procedures prescribed by the city code.

Town of Morris – Justice Court Operations (Otsego County) The justice collected, deposited, disbursed, recorded and reported the fines and fees we reviewed in an accurate and timely manner. During the audit period, the justice deposited cash receipts totaling $25,398 and made disbursements totaling $30,398. Auditors reviewed a sample of 42 cash receipts totaling $7,307 and all disbursements totaling $30,398.

Town of Pawling – Procurement (Dutchess County) Town officials did not always use a competitive process to procure goods and services. Officials did not develop detailed procedures for procuring professional services in their procurement policy. Auditors also found officials did not seek competition for professional services obtained from eight service providers. In addition, officials did not competitively bid for sanitation services totaling $186,821.

Theresa Fire District – Board Oversight and Financial Management (Jefferson County) The board did not provide adequate oversight to ensure that financial activities were properly recorded and reported. They did not properly manage fund balance. The treasurer did not maintain adequate accounting records or provide regular financial reports to the board. She also did not file required annual financial reports with the Office of the State Comptroller in a timely manner. The 2017 through 2019 annual reports were filed between 331 and 1,018 days late. The board did not audit all claims prior to payment and did not annually audit the treasurer’s records. In addition, the board did not adopt realistic budgets based on historic trends. The district ended 2019 with $345,000 in surplus fund balance – enough to fund nearly two years’ of expenditures. Auditors project the district will end 2020 with a surplus of about $308,800 (177% of 2021’s budget).

Town of Wolcott – Financial Management (Wayne County) The board did not effectively manage the town’s financial condition. They did not have a clear understanding of the laws governing the finances of the general fund tax bases and did not have an understanding of the finances for the closed landfill. In addition, the board did not treat taxpayers equitably when budgeting for and allocating certain revenues and expenditures in the “town-wide” and “town-outside-village” general funds. Town-wide funds are used for the benefit of residents of the entire town, including the village. Town-outside-village funds are used only for the benefit of residents in the portion of the town that lies outside of the village. The board also adopted unrealistic budgets and did not maintain reasonable levels of fund balance. They also did not adopt a multiyear financial and capital plan or detailed reserve plan. The board’s ability to effectively manage the town’s financial condition is further hampered by not requiring regular financial reporting.

Town of Wolcott – Information Technology (Wayne County) The board did not ensure that information technology (IT) assets were adequately safeguarded. The board also did not adopt any IT policies or a disaster recovery plan. They did not provide users with cybersecurity awareness training. In addition, the board did not ensure the financial software, town clerk’s software and justice court software had the necessary controls to maintain data integrity. Sensitive IT control weaknesses were communicated confidentially to officials.

SCHOOL DISTRICT AUDITS

Argyle Central School District – Medicaid Reimbursements (Washington County) The district did not maximize Medicaid reimbursements by submitting claims for all eligible Medicaid services provided. The district lacked adequate procedures to ensure Medicaid claims were submitted and reimbursed. Claims were not submitted for 1,251 eligible services totaling $26,637. Had these services been claimed, the district would have realized revenues totaling $13,319 – 50% of the reimbursement.

Greenwich Central School District – Extra-Classroom Activities (Washington County) District officials did not ensure that extra classroom activity (ECA) funds were adequately safeguarded or that the collections were always properly supported. ECA disbursements were properly accounted for. The faculty auditor did not adhere to the district’s ECA policy, which resulted in insufficient oversight of and inadequate reviews of their collections and records. The student treasurers did not maintain adequate supporting documentation for 69% of the collections reviewed – 32 of the 70 collections totaling $30,970 – which prevented district officials from determining whether the collections were remitted intact and in a timely manner. Student treasurers also did not maintain adequate supporting documentation for three of the seven fundraising events reviewed. This prevented district officials from ensuring all the ECA clubs’ fundraising activities collections were properly supported.

Jefferson Central School District – Procuring Services (Delaware County and Schoharie County) District officials did not always seek competition for services. Officials paid $135,000 to 10 of the 14 service providers reviewed without seeking competition. Officials also paid $6,410 to an employee’s private business for lawn care services without public written disclosure of his interest in the contract with the district.

New Lebanon Central School District – Network User Accounts (Columbia County) Officials did not establish adequate controls over the district’s network user accounts to protect against unauthorized use, access and loss. Officials also did not disable 26 unneeded generic accounts of the 48 generic network accounts examined. They did not ensure acceptable use policy compliance. In addition, officials did not monitor the use of the information technology (IT) resources. They did not provide IT security awareness training to all employees using IT resources. Sensitive information technology (IT) control weaknesses were communicated confidentially to officials.

Smithtown Central School District – Claims Processing and Travel-Related Expenses (Suffolk County) The board ensured the claims auditors reviewed were adequately documented, for appropriate purposes and properly audited and approved prior to payment. However, the board could have saved the district $1,855 by adopting federal per diem rates for travel expenses.

Valley Central School District – Information Technology (Orange County and Ulster County) The board and district officials did not ensure information technology (IT) systems were adequately secured and protected. District officials did not monitor compliance with the district’s computer acceptable use policy. The district also did not have a contingency plan to recover in the event of a significant service interruption. In addition, the Board did not physically control access to or establish environmental controls over the server room. Sensitive IT control weaknesses were communicated confidentially to officials.

West Canada Valley Central School District – Non-Payroll Disbursements (Herkimer County and Oneida County) District officials did not implement adequate internal controls to ensure that non-payroll disbursements were authorized and proper. The business manager/treasurer did not control when her electronic signature was used by another employee to sign checks. The claims auditor did not approve medical, vision, and dental insurance claims totaling $3.9 million. The board also did not develop an online banking policy or procedures to verify that transactions are proper.

Whitesville Central School District – Information Technology (Allegany County and Steuben County) District officials did not adequately secure access to the network and information systems. District officials also did not disable six unnecessary user accounts. They did not establish written policies or procedures to monitor shared accounts or for adding, modifying or disabling user permissions to the network and information systems. District officials also did not establish a written agreement with the Erie 1 Board of Cooperative Educational Services (BOCES) to define information technology services to be provided. In addition, sensitive IT control weaknesses were communicated confidentially to officials.

Disciplinary proceedings instituted by the Attorney Grievance Committee for the First Judicial Department

Rudolph W. Giuliani, Esq. challenged the Attorney Grievance Committee for the First Judicial Department's seeking a court order pursuant to Judiciary Law §90(2) and the Rules for Attorney Disciplinary Matters (22 NYCRR) §1240.9(a)(5), immediately suspending him from the practice of law based upon his alleged violations of rules 3.3(a); 4.1; 8.4(c) and 8.4(h) of the Rules of Professional Conduct (22 NYCRR 1200.0) (Rules of Conduct or RPC).

Concluding that there was uncontroverted evidence that Mr. Giuliani communicated demonstrably false and misleading statements to courts, lawmakers and the public at large in his capacity as lawyer for former President Donald J. Trump and the Trump campaign in connection with Trump's failed effort at reelection in 2020, the Appellate Division opined that "These false statements were made to improperly bolster respondent's narrative that due to widespread voter fraud, victory in the 2020 United States presidential election was stolen from his client."

Conceding that interim suspension is a serious remedy, available only in situations where it is immediately necessary to protect the public from the respondent's violation of the Rules, the Appellate Division held that Mr. Giuliani's conduct "immediately threatens the public interest and warrants interim suspension from the practice of law." 

Accordingly, the court granted the Attorney Grievance Committee's motion and suspended Mr. Giuliani from the practice of law in the State of New York "until such time as disciplinary matters pending before the Committee have been concluded, and until further order of this Court."

Click Here to access the court's decision.

Employee's workers' compensation claim for alleged work-related stress and post-traumatic stress disorder rejected

A police officer [Claimant] responded to a call that resulted in the arrest of three individuals. Several weeks later Claimant was interviewed concerning that incident as part of an Internal Affairs investigation. The following day Claimant was suspended from his position and informed that he would receive a written notification of charges.

Claimant thereafter sought mental health treatment stemming from the incident and his resulting suspension. Ultimately Claimant filed a workers' compensation claim alleging his stress, anxiety and post-traumatic stress disorder was caused by an allegedly unlawful disciplinary action.

A Workers' Compensation Law Judge determined that the claim was not compensable as Claimant's psychological injury was "a direct consequence of a lawful personnel decision involving a disciplinary action."*

Claimant then submitted an administrative appeal in which he contended "the disciplinary action was unlawful." The Workers' Compensation Board [Board] affirmed the decision of the Workers' Compensation Law Judge.

Claimant next initiated a judicial appeal in which he contended that the Board's decision was not supported by substantial evidence because his suspension did not constitute a disciplinary action, or another personnel action, within the meaning of §2(7) of the Workers' Compensation Law.

The Appellate Division sustained the Board's determination, noting that the record indicated that the Claimant argued, both at the administrative hearing and at the subsequent administrative review that followed, that his suspension was a disciplinary action.

The court explained that to the extent that Claimant "now advances a contrary argument for the first time on appeal," that claim "is unpreserved for [its] review."

* See https://publicpersonnellaw.blogspot.com/2011/09/depression-resulting-from-being-served.html

Click HERE to access the Appellate Division's ruling.

 

Judicial review of a denial of an application for accidental disability retirement benefits

In this appeal challenging the denial of the Plaintiff's application for accidental disability retirement benefits, the Appellate Division noted that:

1. In order to be entitled to accidental disability retirement benefits, "the burden is on the applicant to demonstrate that his or her incapacitation was the natural and proximate result of an accident sustained while in service";

2. The law is settled that the Comptroller "is vested with exclusive authority to determine all applications for retirement benefits, including the question of whether an accidental injury was sustained while in service, and if supported by substantial evidence, the determination must be upheld"; and

3. The determination with respect to whether an applicant was in service at the time he or she suffered the injury turns on whether "he or she was performing job duties at the time of the injury."

The situation before the Appellate Division in this action involved a police officer [Plaintiff] on limited duty as the result an incident that occurred in 2000 that led to her being assigned to desk duty at her precinct.

In 2011, and still on "limited duty," the Plaintiff accompanied a fellow officer to pick up breakfast for the precinct. Returning to the precinct after picking up the breakfast meals, Plaintiff was injured when she slipped on ice in the precinct parking lot.

Plaintiff applied for accidental disability retirement benefits as the result of the injuries sustained in 2011 and the 2000 incident that triggered her "limited duty" assignment. Her application for accidental disability retirement benefits was initially denied as the Retirement System's determined that neither the 2000 incident* nor the 2011 incident constituted an accident within the meaning of Retirement and Social Security Law §363.

Ultimately a Hearing Officer sustained the Retirement System's denial of Plaintiff's application for accidental disability retirement benefits, finding that the Retirement System had already determined that the 2000 incident did not constitute an accident and that Plaintiff was not in service at the time of the 2011 incident.

The State Comptroller adopted the Hearing Officer's findings of fact and conclusions of law whereupon Plaintiff initiated a CPLR Article 78 proceeding  challenging the Comptroller's determination.

Addressing the merits of Plaintiff's claim, the Appellate Division said:

The record indicated that a fellow officer in the precinct at the time volunteered to go to get the breakfast and asked Plaintiff to accompany him to help carry the large order. With the permission of her supervisor Plaintiff and the other officer went for the breakfast order and Plaintiff testified that she slipped on ice in the precinct parking lot while returning with the food for the precinct staff.

The Appellate Division said that, in its view, in going out to pick up a breakfast order for the precinct "at the behest of her supervisor, Plaintiff was performing a work duty rather than engaged in a personal activity at the time she suffered her 2011 injury." 

However, as the Comptroller did not reach the issue as to whether the 2011 incident constituted an accident within the meaning of Retirement and Social Security Law §363, the court remitted the matter for the Comptroller's consideration of that element of Plaintiff's claim.

* As Plaintiff's brief did not address Comptroller's finding with respect to the 2000 incident, the Appellate Division deemed that claim abandoned by the Plaintiff. 

Click HERE to access the Appellate Division's decision.

 

Administrative Law Judge recommended the employee's termination as the appropriate disciplinary penalty under the circumstances

New York City Office of Administrative Trials and Hearings Administrative Law Judge Kevin Casey recommended that a laboratory supervisor [Supervisor] at a New York City Hospital [Employer] be terminated from employment following a hearing on disciplinary charges filed against the Supervisor by the Employer.

Evidence in the disciplinary hearing record described more than 50 acts of misconduct spanning a 16-month period that the Employer alleged justified Supervisor being terminated from his employment at the facility.

The disciplinary charges and specification included allegations that the employee:

1. Repeatedly refusing to perform assigned tasks;

2. Falsified time-sheets;

3. Sent discourteous emails to[other] supervisors;

4. Was guilty of "excessive absence and lateness;"

5. Ignored orders;

6. Failed to attend scheduled meetings;

7. Changed shifts without approval; and

8. Had been absent without leave.

In recommending termination of Supervisor's employment, ALJ Casey noted that Supervisor had earlier been disciplined by the Employer and found guilty of charges alleging "similar misconduct."

Click HERE to access Judge Casey's decision. 

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