Audits and reports issued during the week ending July 10, 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 July 10, 2021.

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

Municipal Audits

Town of Hempstead Local Development Corporation – Fund Balance (Nassau County) The board did not effectively manage fund balance. The board also did not develop or adopt a fund balance policy that addresses what level of fund balance is needed or how any surplus funds will be used and the timeframe for doing so. In addition, the unrestricted fund balance grew to $2.4 million as of Dec. 31, 2020. Allowing $2.4 million to accumulate and sit idle without a specific purpose to benefit the town is not in the public’s best interest. 

Laurens Fire District – Financial Activities (Otsego County) The board did not establish adequate controls over district financial activities to safeguard assets. In addition, the board did not segregate key duties or implement adequate mitigating controls. Auditors also determined the board did not contract for an independent audit of its 2019 records, as required by law, or provide for an annual audit of the treasurer’s records. As of June 30, 2020, the district’s 2017 through 2019 annual reports were between 122 and 852 days late. 

Town of Oneonta – Town Clerk (Otsego County) The clerk properly recorded all the fees auditors reviewed and remitted all fees collected during the audit period in a timely manner. However, the clerk did not always deposit fees within the required time frame. The clerk did not deposit $5,266 in fees collected within the required time frame. In addition, the clerk did not prepare accurate bank reconciliations. The clerk also did not prepare accountability analyses. As of Oct. 30, 2020, the clerk’s bank account held an unaccounted for and unremitted cash balance of $262. 

City of Yonkers – Budget Review (Westchester County) The 2021-22 budget relies on nonrecurring revenue of $55.2 million, such as fund balance, one-time state funding and the sale of property, to balance its budget. The city could face a shortfall of $1.8 million for parking violations bureau revenue and $1.3 million for parks revenue. The city plans to borrow up to $15 million for tax certiorari settlements in the 2021-22 fiscal year. In addition, firefighting overtime costs could potentially be over budget by as much as $2 million based on the 2020-21 fiscal year overtime costs. Over the last 10 years, the city’s outstanding debt has grown 9.4% and the city’s debt service payments have risen 13.2%. The city will need $80.6 million to service its debt obligations during 2021-22.

 

 

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Mitigating circumstances set out in the record held insufficient to justify imposing a lesser penalty than termination under the circumstances

In a disciplinary proceeding brought by the Department of Education [DOE], New York City Office of Administrative Trials and Hearings ALJ Joycelyn McGeachy-Kuls recommended that an employee be terminated for failure:

1. To comply with her supervisor’s instructions;

2. Refusing to work cooperatively with co-workers; and

3. Excessive use of the Internet during business hours for non-work related matters.

It is well settled that the charging party "... bears the burden of proving the charged misconduct by a preponderance of the credible evidence.

Finding that DOE proved that the employee browsed the internet for non-work-related matters for over 33 hours over a period of less than a month, failed to clock out for lunch, made false time-card entries, and spoke to a co-worker in a rude and insulting manner.

Noting that DOE sought to impose the penalty of termination, the ALJ concluded that notwithstanding certain mitigating considerations set out in the record, termination was appropriate under the circumstances and so recommended.

Click HEREto access Judge McGeachy-Kuls' determination in this matter. 

 

Stress experienced in the performance of recognized duties of the position is not an accident for the purposes of qualifying for accidental disability retirement benefits

For purposes of the Retirement and Social Security Law, an accident has been defined as a "sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact" and the burden is on the party seeking accidental disability retirement benefits to demonstrate that his or her disability arose from an accident within the meaning of the Retirement and Social Security Law. Typically the Comptroller's determination is upheld if supported by substantial evidence.

In this instance a State Trooper's [Petitioner] duties involved working with informants in an effort to infiltrate drug cartels and curtail the supply of drugs coming into the United States that entailed "interacting with dangerous individuals" which duties were set out in the job description for his position. Returning from an overseas mission, Petitioner experienced a panic attack in his office. Subsequently hospitalized and referred to an intensive therapy program, Petitioner was diagnosed with post-traumatic stress disorder, manic depression and anxiety, and deemed unable to return to work.

Petitioner filed an application for accidental disability retirement benefits based on this diagnosis, which Petitioner claimed was a result of his work with the drug cartels. His application was rejected by the retirement system, which decision, following administrative appeal, was ultimately sustained by the State Comptroller. Petitioner asked the Appellate Division to review the rejection of his application for accidental disability retirement benefits.*

The Appellate Division held that Petitioner's mental injuries were a direct result of the stress that he was under while working undercover and interacting with informants and members of dangerous drug cartels -- "dangerous undercover work was part and parcel of his regular duties as a narcotics investigator and was specifically set forth in petitioner's job description."

Accordingly, opined the court, the stress that produced Petitioner's mental injuries "was an inherent part of his job and was not unexpected, substantial evidence supports the finding that his injuries were not the result of an accident."

In contrast, the Appellate Division noted that with respect to cases involving emergency workers who sustained mental injuries after responding to the World Trade Center bombing, there is no statutory presumption that applies to Petitioner's situation and decline to disturb the Comptroller's determination denying Petitioner's application for accidental disability retirement benefits.

* The New York State and Local Retirement System denied Plaintiff's application on the ground, among others, that the incident that allegedly occurred on an unspecified date was not an accident within the meaning of Retirement and Social Security Law §363.

Click HEREto access the Appellate Division's ruling.

Reasons why a party's motion to vacate an arbitration award could be denied

A City of Newburgh[City] police officer [Petitioner] was operating a police vehicle when that vehicle was struck in the rear by an underinsured vehicle. As a result, Petitioner sought to arbitrate a claim against the City for supplementary uninsured/underinsured motorist [SUM] benefits.

Ultimately an arbitration award was issued in favor of Petitioner, who sought to confirm the award. The City cross-moved to vacate the award, contending that the arbitrator exceeded her power in issuing an award in favor of Petitioner claiming that the police vehicle Petitioner was operating at the time of the accident was not covered by the SUM endorsement, and thus, there was no agreement to arbitrate. Supreme Court granted Plaintiff's motion to confirm the award, denied the City's cross motion to vacate the award, and the City appealed.

The Appellate Division ruled that Supreme Court had properly [1] granted Plaintiff's granted the motion to confirm the arbitration award, [2] correctly denied the City's cross motion to vacate the arbitration award, and [3] appropriately confirmed the arbitration award.

The court explained:

1. An arbitration award may be vacated, as relevant with respect to the City's motion in this action, where "a party's rights were impaired by an arbitrator who 'exceeded his [or her] power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made'"; and

2. "[A]n arbitrator 'exceed[s] his [or her] power' under the meaning of [CPLR 7511(b)(1)(iii)]; or

3. "Where [the] 'award violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power'".

The Appellate Division rejected the City's contention that the arbitrator exceed her power, or violate public policy, by rendering an award based on the issues of whether Petitioner had suffered a serious injury under Insurance Law §5102(d) and the extent of his damages, which were the only issues placed before her by the parties.

Citing Matter of Infinity Indem. Ins. Co. v Hereford Ins. Co., 149 AD3d 1075, the court opined that "Having fully participated in the arbitration proceeding, the City cannot seek to vacate the award on the basis that there was no coverage and no agreement to arbitrate."

The Appellate Division's ruling is posted on the Internet HERE.