State Comptroller DiNapoli Releases School & Municipal Audits

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued were issued on April 12, 2023.

Links to material posted on the Internet highlighted in COLOR.

Village of Stamford – Claims Audit (Delaware County)

The board did not effectively audit claims prior to payment. As a result, disbursements were made for unsupported and improper claims. During the audit period, the board approved 890 claims totaling $8.2 million. Of the 200 claims totaling $1 million that were examined, 78 claims totaling $195,545 did not have support that the purchases complied with competitive bidding requirements or the village’s procurement policy, five claims totaling $1,334 included food and alcohol purchases and one claim totaling $700 did not have an itemized receipt and did not follow procurement guidelines. In addition, six claims totaling $637 did not have appropriate support, such as an itemized receipt or invoice. Lastly, credit card claims totaling $62,404 were improperly paid before board audit.

 

Village of Stamford – Pool Capital Project Planning and Monitoring (Delaware County)

The board did not transparently plan or sufficiently monitor the project. As a result, total costs exceeded grant revenues by $256,302 and contributed to the declining fund balance in the village’s general fund. The board did not prepare a project budget or ensure that a separate capital projects fund was set up to record project revenues and expenditures. The board also did not ensure the project was monitored and change orders were reviewed and approved, nor did it competitively procure project contracts and expenditures.

 

Village of Waverly – Parks and Recreation Department Financial Activities (Tioga County)

Village officials did not establish adequate controls over the department’s financial activities, resulting in $16,525 in unaccounted for collections. Cash receipt processes and oversight were inadequate and key duties were not segregated. In addition, collection, receipting and recordkeeping procedures were inadequate. The department hosted 15 tournaments and held nine fundraisers. However, no money was deposited for 11 of the tournaments and two of the fundraisers. Registration forms for 26 of 36 sports leagues were not maintained. The former director awarded scholarships (i.e., waived registration fees) without any guidelines, board oversight or approval, and also inappropriately used village bank accounts for non-village activities. As a result of the audit and investigation, the former director was arrested and pleaded guilty in December 2022 to official misconduct. As part of his plea, he resigned from his position and was sentenced to a one-year conditional discharge and paid the full restitution of $16,525.

 

Wyandanch Union Free School District – Budget Review (Suffolk County)

Based on the results of the review, auditors found that the revenue and expenditure projections in the 2023-24 proposed budget are reasonable. However, auditors also found that the district’s proposed budget includes approximately $11.3 million in health insurance appropriations; this appropriation is $3.4 million, or 43%, more than the $7.9 million projected expenditure for 2022-23 and $3.9 million, or 54%, more than the $7.4 million average health insurance expenditure incurred during the last five years. The district’s proposed budget complies with the tax levy limit.

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Curing certain procedural omissions by the plaintiff and the plaintiff's alleged failure to state the merits of certain of her claims

Plaintiff [Petitioner] appealed the judgment of the United States District Court dismissing all her claims against the Defendants [School District]. Petitioner had filed claims alleging unlawful discrimination within the meaning of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., and the Equal Protection Clause of the Fourteenth Amendment, as made actionable by 42 U.S.C. §1983.

As to certain procedural issues, the Circuit Court of Appeals, Second Circuit, said it had concluded that although the School District has been properly served with the summons and complaint, Petitioner had failed to demonstrate proper service of her complaint upon two named School District employees. The court also agreed with the district court that Petitioner had failed to exhaust that portion of her Title VII claim related to alleged adverse employment actions in May 2019.

Addressing the merits of Petitioner's action, the Circuit Court ruled that the district court had erred in holding that the Petitioner's First Amended Complaint failed to state a plausible claim under Title VII or the Equal Protection Clause.

Accordingly, the Circuit Court affirmed the district court’s dismissal of Petitioner's Title VII complaint "to the extent the claim is based on alleged adverse employment actions in May 2019" but then vacated the district court’s judgment to the extent it dismissed Petitioner's Section 1983 claim and the remainder of Petitioner's Title VII claim.

The Circuit Court then remanded the matter to the district court for:

1. Further proceedings consistent with its opinion; and

2. A determination by the district court as to whether Petitioner should be provided with
"an extension of time to effectuate proper service of process" on the two employees of the School District referred to above.

Click HERE to access the decision of the Circuit Court of Appeals.

Rejection of demands for additional compensation for work performed pursuant a contract

Rejection of demands for additional compensation for work performed pursuant a contract to remediate and digitize documents damaged by flooding by New York City's Contract Dispute Resolution Board and NYC Office of Administrative Trials and Hearings (OATH) unanimously affirmed by the Appellate Division.

 

Matter of Total Envtl. Restoration Solutions, Inc. (TERS) v Contract Dispute Resolution Bd.

2023 NY Slip Op 01878

Decided on April 11, 2023

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered: April 11, 2023
Before: Kern, J.P., Friedman, Gesmer, Higgitt, JJ.

Index No. 154920/21 Appeal No. 17 Case No. 2021-04286

[*1]In the Matter of Total Environmental Restoration Solutions, Inc. (TERS), Petitioner-Appellant,

v

Contract Dispute Resolution Board, et al., Respondents-Respondents.

Kostelanetz & Fink, LLP, New York (Claude Millman of counsel), for appellant.

Frank Ng, New York, for Contract Dispute Resolution Board and NYC Office of Administrative Trials and Hearings (OATH), respondent.

Sylvia O. Hinds-Radix, Corporation Counsel, New York (Philip W. Young of counsel), for The City of New York, The Office of the Comptroller and the New York City Police Department (NYPD), respondents.

Judgment (denominated an order), Supreme Court, New York County (Eileen A. Rakower, J.), entered on or about October 13, 2021, denying the petition to annul a determination of respondent Contract Dispute Resolution Board (CDRB), dated February 4, 2021, which denied petitioner's claims for additional compensation from respondent New York Police Department (NYPD) for work performed pursuant a contract to remediate and digitize documents damaged by flooding caused by Hurricane Sandy, and dismissing the proceeding brought pursuant to CPLR article 78, unanimously affirmed, without costs.

CDRB's determination was not arbitrary or capricious or affected by an error of law (see CPLR 7803[3]; 9 RCNY 4-09[g][6]). In calculating the remediation costs, CDRB rationally concluded that the language of the contract did not support petitioner's contention that the word "page" unambiguously referred to one side of a sheet of paper. Unlike the section governing digitization services, which clarified that "[d]ouble-sided documents count as two pages," there was no equivalent provision in the section governing remediation. The omission of similar language with respect to remediation services "must be deemed an intentional choice of the parties" (Ambac Assur. Corp. v EMC Mtge. LLC, 121 AD3d 514, 518 [1st Dept 2014]). Indeed, remediation treats the whole sheet of paper regardless of whether it is printed on one or both sides, whereas digitization depends on the number of images scanned.

The contract's merger clause precludes petitioner's reliance on communications between the parties and other extrinsic sources to support its proposed definition (see Schron v Troutman Sanders LLP, 20 NY3d 430, 436 [2013]). Further, extrinsic evidence may not be considered where, as here, the contract is unambiguous (Matter of Wells Fargo Bank, N.A., 198 AD3d 156, 163 [1st Dept 2021], lv dismissed 38 NY3d 998 [2022]). In any event, even if there were an ambiguity, it is to be construed against petitioner, the drafter of the agreement (see 327 Realty, LLC v Nextel of N.Y., Inc., 150 AD3d 581, 582 [1st Dept 2017])

In determining the digitization costs, CDRB rationally relied on NYPD's calculation of the number of images that had been digitized, which was based on the number of files that NYPD received on hard drives from petitioner. This method was consistent with the contractual term that petitioner was to be compensated "for the actual number of . . . images digitized." By contrast, petitioner's calculation method using image file size did not comport with the terms of the agreement.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: April 11, 2023

 

Requirements to establish a prima facie case of the employer's failure to provide a reasonable accommodatition of an employee's disability

To establish a prima facie case of an employer's failure to accommodate an employee's disability within the meaning of the Americans with Disabilities Act, 42 U.S.C. §§12101–12213 [ADA], the plaintiff must allege the following:

(1) The plaintiff is a person with a disability within the meaning of the ADA;

(2) An employer covered by the statute had notice of plaintiff's disability;

(3) With reasonable accommodation, plaintiff could perform the essential functions of the job at issue; and

(4) The employer has refused to make such accommodation or accommodations.

In this action the parties disputed whether New York City Department Of Human Resources Administration [HRA] had refused to provide the employee [Plaintiff] with a reasonable accommodation of her alleged disability within the meaning of 42 U.S.C. §§12101–12213.

The U.S. Circuit Court of Appeals, Second Circuit, noted that, for the purposes of the ADA, a reasonable accommodation “is one that enables an individual with a disability ... to perform the essential functions of that position or to enjoy equal benefits and privileges of employment.” However, observed the court, the ADA does not require employers to “provide a perfect accommodation or the very accommodation most strongly preferred by the employee.”

Plaintiff acknowledged that, in response to her request, HRA provided her with an ergonomic chair and footrest, but alleged that the ergonomic chair was “dilapidated” and the footrest "rocked." The Circuit Court, however, noted Plaintiff failed to identify any “benefits or privileges of employment” that she was not able to enjoy because of the chair and footrest that HRA provided to accommodate the employee's alleged disability.

The Circuit Court also commented that it agreed with the federal District Court that Plaintiff’s allegations in support of her claim that the accommodations HRA provided were inadequate were "too conclusory and thus fail to establish a prima facie case for failure to accommodate a disability."

Plaintiff also contended that the District Court erred in dismissing her discrimination complaints pursuant to the ADA and Title VII. Addressing this claim, the Circuit Court opined that Plaintiff failed "to develop her legal theory in support of this argument," pointing out  that "[it] is a settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived."

In addition, the Circuit Court noted that Plaintiff did not allege facts sufficient to raise an inference that HRA's actions were taken because of her race or disability, citing Vega v. Hempstead Union Free School District, 801 F.3d 72.

Considering Plaintiff's remaining arguments, the Second Circuit Court of Appeals concluded that "that they are without merit" and affirmed the judgment of the federal District Court dismissing Plaintiff's complaint.

Click HERE to access the Circuit Court's decision posted on the Internet.

Exhaustion of administrative remedies

It is clear that New York courts, as a general rule, will not consider lawsuits filed by an aggrieved Plaintive protesting some administrative determination unless the Plaintiff has exhausted his or her or its administrative remedies.

The major exception to this rule: a party's effort to exhaust an available administrative remedy would constitute "an exercise in futility". Typically, New York courts apply this exception when it is deemed that the administrative decision is a foregone conclusion.

There is a coda to this exception as the Appellate Division indicated in deciding the instant CPLR Article 78 action. 

The Appellate Division rejected the New York City Department of Records and Information Services' [Records] argument that the Petitioner had failed to exhaust its administrative remedies, noting that Petitioner "... filed a timely administrative appeal from [Record's] initial denial of [Petitioner's] FOIL request" and Records had denied that appeal.

The court then opined "Petitioner was not required to bring a second administrative appeal challenging [Record's] determination of [Petitioner's] first administrative appeal."

Click HERE to access the Appellate Division's decision posted on the Internet.