Audits and reports issued during the week ending July 16, 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 16, 2021. 

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

MUNICIPAL AUDITS

City of Binghamton – Joint Sewage Treatment Facility Capital Project Planning and Monitoring (Broome County)City officials properly planned and monitored the project by establishing a sound process for overseeing project activities that included daily onsite inspections documenting the following: daily onsite personnel; leak testing results for treatment lines; concrete inspection and testing results, including core samples and composition and work progress through photographic evidence. In addition, city officials ensured construction change orders were made only when warranted and after a thorough review. They avoided $11.3 million in interest and financing costs over 30 years by obtaining a $15 million interest-free loan and securing grants to fund 27 percent of project costs. In addition, city officials withheld payments to contractors to recover some of the $3.1 million in additional costs that were due to project delays.

Incorporated Village of Garden City – Check Signing (Nassau County) The village’s check signing process does not comply with village policy and the village treasurer did not maintain control of her electronic signature. In addition, the treasurer allowed her signature to be affixed to checks without her being present. Alternate signatories did not sign in the absence of the treasurer and deputy treasurer.

Selkirk Fire District – Procurement of Professional Services (2021M-55) (Glens Falls Regional Office)District officials did not solicit competition for professional services. During the audit period, district officials paid 12 professional service providers $759,029 without soliciting competition. Officials also did not issue a request for proposals for audit services totaling $25,200, although required by policy. In addition, officials could not provide documentation that they used other methods to assess the accountability, reliability, responsibility, skill, education and training, judgment, integrity and moral worth of the professional service providers as required by the district’s procurement policy.

 

SCHOOL DISTRICT AUDITS

Watervliet City School District – Information Technology (Albany County) The board and district officials did not ensure the information technology (IT) assets and data were safeguarded. Officials did not establish written procedures for managing, limiting and monitoring user accounts. Auditors determined officials also did not disable 72 unneeded network accounts in a timely manner. Officials also did not monitor compliance with the acceptable computer use policy. As a result, 12 of 13 computers auditors tested accessed nonbusiness websites prohibited by the policy. Sensitive IT control weaknesses were communicated confidentially to officials.

Westhill Central School District – Information Technology (Onondaga County) District officials did not implement adequate information technology (IT) controls over the district office’s network to safeguard personal, private and sensitive information. District officials also did not monitor employee Internet use. Auditors found eight of 10 employees’ computers they reviewed were used for personal internet activity. District officials did not properly manage network user accounts. Auditors examined all 31 enabled network user accounts on the district office domain controller. Six unneeded network user accounts, seven shared user accounts and three user accounts were found with unneeded administrative permissions. In addition, district officials did not provide formalized IT security awareness training to staff. Sensitive IT control weaknesses were communicated confidentially to district officials.

 

 

Redistricting for the 2022 Elections

Redistricting for the 2022 Elections, an article addressing New York State's engaging "in a new and untried procedure in creating legislative and congressional districts following the 2020 census," was posted July 16, 2021 by Richard Rifkin, Legal Director of Albany Law School's Government Law Center. 

Click HERE to access Mr. Rifkin's article.

State University of New York adopts regulation providing for Gender Neutral Bathrooms

The State University of New York has adopted a regulation providing for Gender Neutral Bathrooms at State University of New York facilities effective July 14, 2021.

The regulations was adopted in an effort to conform with legislation requiring SUNY state-operated campuses to designate all single occupancy bathrooms as gender neutral.

The text of rule and any required statements and analyses may be obtained from: Lisa S. Campo, State University of New York, State University Plaza, Albany, NY 12246, (518) 320-1400, email: Lisa.Campo@SUNY.edu. 

 

Failure to exhaust administrative remedies fatal to Petitioner's challenge to a final administrative determination

This litigation concerns payments that a school district [Respondent] is required to make to a charter school [Petitioner] with respect to students with disabilities in accordance with §2856[1][b] of the Education Law and addresses the fallout of an audit by the New York State Comptroller's Office in which it was determined that Respondent had overpaid the Petitioner for certain expenses.

Respondent learned that it had overpaid Plaintiff for those expenses for a period of approximately 12 years, ending in 2018, it informed the Petitioner that it would recoup the overpayment by deducting the amount of the overpayment from the next four scheduled payments to Petitioner.

Petitioner initiated this CPLR Article 78 proceeding, seeking, among other relief, a court order prohibiting Respondent from making such deductions, alleging that such recoupment was arbitrary and capricious. 

Supreme Court granted Respondent's motion to dismiss the Article 78 action contending that Petitioner failed to exhaust its administrative remedies. Petitioner appealed Supreme Court's action, claiming that it was not required to exhaust its administrative remedies because the case presents a pure question of law which the Appellate Division may decide without regard to the alleged failure to exhaust its administrative remedy.

The Appellate Division rejected Petitioner's argument, explaining that Petitioner's "contention is not properly before us inasmuch as it [was] raised for the first time on appeal' and thus it has 'no discretionary authority' to review it in this CPLR Article 78 proceeding."

The court then opined that assuming, arguendo, that the general rule requiring exhaustion of administrative remedies does not apply where the issue raised involves a pure question of law, this case does not present a pure question of law, noting that the relevant Department of Education regulation states that, "[i]n the event of the failure of a school district to fulfill the financial obligation required by section § 2856 [1] [b] of the Education Law equal to the amounts calculated pursuant to this section, upon notification by the charter school, the commissioner shall certify the amounts of the unpaid obligations to the comptroller to be deducted from State aid due the school district and paid to the applicable charter schools."

Noting that the statute provides that "[a]mounts payable under this subdivision shall be determined by the Commissioner of Education" and, citing citing Matter of Davis v Mills, 98 NY2d 120, the Appellate Division further explained that "[i]t is for the Commissioner [of Education] in the first instance, and not for the courts, to establish and apply criteria" regarding the propriety and administration of recoupment of alleged funding overpayments.

Holding that Supreme Court properly granted Respondent's motion and dismissed the petition based on Petitioner's failure to exhaust its administrative remedies and, after considering Petitioner's remaining contentions and concluding that they did not require modification or reversal of the Supreme Court's judgment in chief, dismissed Petitioner's appeal.

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

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.