New York State Comptroller Thomas P. DiNapoli releases Municipal and School Audits

On December 12, 2024, New York State Comptroller Thomas P. DiNapoli issued the following local government and school audits were issued and posted on the Internet.

Click on the text highlighted in color to access the item posted on the Internet

Village of Riverside – Clerk-Treasurer’s Records and Reports (Steuben County)

The former and current clerk-treasurers did not prepare or maintain complete, accurate or timely accounting records. As a result, the board’s ability to make informed financial decisions was inhibited because the village’s true financial position was unknown. The clerk-treasurers did not record investment transactions and interfund transfers, improperly recorded receipts, disbursements and budget transfers, and did not record water and sewer adjustments. In addition, the current clerk-treasurer did not file the required Annual Financial Report (AFR) for the last four fiscal years and the current AFR was overdue as of Aug. 9, 2024. The clerk-treasurers also did not file payroll reports or remit withholdings timely to the Internal Revenue Service or the New York State Department of Taxation and Finance, which could result in fines and penalties.

 

City of Dunkirk – Budget Review (Chautauqua County)

The lack of complete, accurate, and current accounting and financial records significantly limited the auditors’ review and precluded them from determining the reasonableness of all of the city’s revenue and expenditure projections.  As of Dec. 31, 2022, unassigned fund balance in the general, water, wastewater, refuse and boardwalk funds were ($6,827,480), ($1,163,085), ($247,482), $0 and $0; respectively. The mayor anticipates that the city’s reported operating results in the 2023 audited financial statements will be significantly worse than the deficits in 2022 and officials are also projecting deficits in 2024. The 2025 proposed budget includes a planned deficit in water, wastewater and boardwalk funds, which will further negatively impact the city’s overall financial condition and exacerbate cash flow issues. The city’s known outstanding liabilities totaled more than $20.5 million and the 2025 proposed budget does not provide for satisfying these obligations. These liabilities exceed the $18.5 million maximum amount authorized by an act of the state Legislature for the city to issue debt to liquidate the deficits.

 

Village of North Haven – Collections (Suffolk County)

Village officials did not ensure collections were properly collected, recorded and deposited in a timely manner. As a result, the village has an increased risk that funds could be lost, misused or misappropriated. Auditors reviewed 922 collections totaling $1.4 million and identified 486 collections totaling $829,694 that had one or more discrepancies. Seventy-two collections totaling $238,032 did not indicate the form of payment (cash or check). Auditors found 358 collections totaling $537,175 did not indicate the date of receipt. Therefore, officials and auditors could not confirm whether the collections were deposited in accordance with village law. Also, 48 collections totaling $53,722 were not deposited in a timely manner and 69 collections totaling $57,426 were not recorded on a timely basis. In addition, officials did not properly segregate the duties of, or review the work performed for, collecting, recording and depositing of collections.

 

Caledonia-Mumford Central School District – Financial Management (Genesee County)

ty)The board and district officials did not effectively manage fund balance, the difference between revenues and expenditures accumulated over time. As a result, the district’s surplus fund balance is two times the statutory limit. District officials were not transparent with taxpayers and more real property taxes were levied to fund operations. In the 2020-21 through 2022-23 fiscal years, the board-adopted budgets made it appear the district would have budget deficits requiring fund balance to be appropriated and real property taxes to be increased. However, the district had operating surpluses totaling $5.1 million. Appropriating unneeded fund balance circumvents the statutory limit. In addition, three general fund reserves totaling $1.4 million were not necessary or reasonably funded and the debt reserve in the debt service fund had $337,777 in unidentified money that should be returned to the general fund.

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New York State Comptroller Thomas P. DiNapoli releases State Department and Agency audits

On December 11, 2024, New York State Comptroller Thomas P. DiNapoli issued the following State Department and Agency audits.

Click on the text highlighted in color to access the item posted on the Internet

Department of Health: Medicaid Program – Overpayments for Medicare Part C Claims (2023-S-13)

Under Medicare Part C, private insurance companies administer Medicare benefits through Medicare Advantage Plans. From a judgmental sample of 89 claims identified as high-risk, totaling $1,325,452, from five hospitals, auditors determined Medicaid made improper payments for 49 Part C claims (55%) totaling $881,233. The improper payments occurred in part because hospitals misinterpreted state regulations and billing guidelines, did not properly submit Claim Adjustment Reason Codes on claims, or indicated Medicare Advantage Plans did not cover services when they actually did. Auditors also found improvements are needed to the Department of Health’s automated claims processing and payment system to prevent incorrect payments.

Homes and Community Renewal: Housing Trust Fund Corporation – Internal Controls Over and Maximization of Federal Funding for Various Section 8 Housing Programs and the COVID Rent Relief Program (Follow-Up) (2024-F-21)

Homes and Community Renewal (HCR) receives federal funding from the U.S. Department of Housing and Urban Development (HUD) through the Housing Trust Fund Corporation to administer the Section 8 Housing Choice Voucher Program (HCV) and the Section 8 Performance-Based Contract Administration Program across the state. HCV provides rental and homeownership assistance. A prior audit, issued in March 2023, found that HCR was not fully utilizing its HUD-authorized HCV vouchers or budget to help families in need of housing assistance, HCR did not meet HUD’s voucher utilization threshold during any year covered by the initial audit scope, and HCR could not fully reconcile its HCV financial figures. HCR made progress in addressing the issues identified in the initial audit report, implementing two recommendations and partially implementing another (one recommendation was no longer applicable).

Department of Health: Medicaid Program – Excessive Payments for Durable Medical Equipment Rentals (Follow-Up) (2024-F-18)

Medicaid recipients receive necessary durable medical equipment (DME, i.e., devices and equipment available on a monthly rental basis) as a benefit of the Medicaid program. There are typically limits (or caps) on the number of monthly rental payments. A prior audit, issued in April 2023, found about $1.5 million in overpayments and $503,619 in questionable payments for DME rentals. DOH made little progress in addressing the issues identified in the initial audit report. For example, DOH had not formally determined whether it is efficient and appropriate to require a cap on the number of rental payments for oxygen equipment. Of the initial report’s seven audit recommendations, one was partially implemented and six were not implemented.

New York City Department of Parks & Recreation – Park Accessibility for People With Disabilities (Follow-Up) (2024-F-13)

Title II of the 1990 Americans with Disabilities Act (ADA) prohibits discrimination against individuals with a disability in all programs, activities, and services of public entities, such as the New York City Department of Parks & Recreation (Parks). A prior audit, issued in March 2023, found that Parks’ accessibility efforts were primarily focused on ensuring newly funded capital projects are ADA compliant, rather than removing identified barriers at existing facilities. In addition, the audit found that agency officials did not adequately monitor concession contractors to ensure they were complying with contractual obligations and other accessibility requirements, nor did Parks ensure that the facility accessibility information posted on its website was accurate and updated. Parks officials made some progress in addressing the issues identified in the initial audit report, partially implementing five recommendations and not implementing two.

Office for the Aging, Department of Financial Services, Department of State, State University of New York, Office of Temporary and Disability Assistance – Selected State Agencies’ Roles in Financial Literacy (Follow-Up) (2024-F-7)

In 2021, New York State enacted legislation that essentially creates a single repository of links to all State agency and authority financial literacy information and programs. The law required all agencies and authorities to initially provide relevant financial literacy-related education information to the Department of Financial Services (DFS). Those subject to the law are also required to send any updates, revisions, and new information to DFS annually for posting. A prior audit, issued in September 2022, found that, although each of the five agencies assessed was involved to some degree in financial literacy efforts and some collaboration existed, there didn’t appear to be a coherent strategy or plan to coordinate these efforts statewide, nor was there a shared understanding or definition of “financial literacy.” The agencies made progress in addressing the problems identified in the initial audit report, implementing four of the five recommendations.

Homes and Community Renewal – Internal Controls Over the Governor’s Office of Storm Recovery’s Federally Funded Programs (2022-S-37)

The Governor’s Office of Storm Recovery (GOSR), which operates within the Housing Trust Fund Corporation, a component of Homes and Community Renewal (HCR), was established in June 2013 as a temporary agency to coordinate and direct statewide administration of the federal funds used for recovery and rebuilding efforts in storm-affected municipalities across the state. Auditors identified potential weaknesses in GOSR’s methods for determining applicant eligibility to receive assistance and in determining award amounts. There were also delays in redevelopment of some properties and weaknesses in GOSR’s practices related to both recapturing funds and handling uncollectible accounts. Though sample results cannot be projected to the related populations of the funded properties, the implications and significance of the findings warrant prompt and appropriate action to better manage the remaining open projects and to inform other HCR housing programs.

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Board of Trustee's decision denying Petitioner's application for accidental disability benefits under color of the World Trade Center Disability Law sustained

Supreme Court denied Plaintiff's petition to annul the relevant Board of Trustees' determination rejecting Petitioner's application for accidental disability benefits pursuant the World Trade Center Disability Law and dismissed the proceeding brought by Plaintiff pursuant to CPLR Article 78. The Appellate Division unanimously affirmed the Supreme Court's ruling, without costs.

The Appellate Division noted that "Credible evidence supported the Board's conclusion that [Petitioner] failed to meet the threshold requirement showing that she participated in the rescue, recovery, or cleanup operations at the World Trade Center site during the first 48 hours after the attack or for 40 hours over the following year as set out in New York Retirement and Social Security Law §2[36][e], [g]. Further, the Appellate Division noted that:

1. "Petitioner's overtime slips from September 2001 indicated that she had worked in the Bronx, not at the World Trade Center site, in the days and weeks after the 9/11 attack;" and

2. Conclusory statements from two other New York City employees that they saw Petitioner at the World Trade Center site were insufficient to support her claim.

In addition, the Appellate Division noted that a remand for further consideration of the matter was not required as an "undated color photographs and a safety helmet bearing a signature purportedly by former President Bill Clinton failed to connect [Petitioner] to the statutory time frame" and courts cannot substitute their judgment for that of the Board of Trustees.

Citing Matter of Picciurro v Board of Trustees of the N.Y. City Police Pension Fund, Art. II, 46 AD3d 346, the Appellate Division pointed out that the Board of Trustee's determination must stand as long as there is any credible evidence to support its determination.

Click HERE to access the Appellate Divisions decision posted on the Internet.

Probationary employee's compliant that her termination was based on her race and gender dismissed for failure to allege acts of unlawful discrimination

In this action the Appellate Division found that the Supreme Court correctly granted the City of New York's motion to dismiss the Plaintiff's complaint. Plaintiff, said the court, had failed to sufficiently allege that her termination occurred under circumstances "giving rise to an inference of unlawful discrimination". 

The Appellate Division observed that Plaintiff's complaint alleged, "in a conclusory fashion", that Plaintiff's employment was terminated based on her race and gender but it failed to allege that any decision-makers "made remarks evidencing discriminatory intent" or alledge that "other similarly situated employees outside of her protected class were treated more favorably", or "any other act or omission giving rise to an inference of discrimination".

In contrast, the Appellate Division noted that the City's documentary evidence indicated that the appointing authority terminated Plaintiff's employment "as of right within [Plaintiff's] probationary period"* and Plaintiff "fails to allege that a facially neutral employment practice had a disparate impact on her protected class".

Citing Sedgwick v New York City Department of Educ., 215 AD3d 607, the Appellate Division commented that "To the extent [Plaintiff] argues that the [Appointing Authority's] decision to terminate her employment was arbitrary and capricious, such a claim should have been brought in a CPLR article 78 proceeding".

* V.5.7 of the Personnel Rules and Regulations of the City of New York provides, in pertinent part, "... the agency head may terminate the employment of any probationer whose conduct and performance is not satisfactory after the completion of a minimum period of probationary service and before the completion of the maximum period of probationary service by notice to the said probationer and to the commissioner of citywide administrative services."

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

 

NYS Comptroller DiNapoli tracks NYC agency performance, recommends greater transparency

New York City’s government workforce reached more than 300,000 employees in June of 2024, the first year-over-year increase since the COVID-19 pandemic. Still, some city agencies remain understaffed, resulting in critical services being impacted, according to a new report released on December 6, 2024, by New York State Comptroller Thomas P. DiNapoli.

The analysis is based on data from his office’s Agency Services Monitoring Tool, which launched in November 2023 to help the public and lawmakers better evaluate agency performance. The tool uses the performance indicators (“tracked services”) that are included in the Mayor’s Management Report, but also displays funding, staffing levels and service performance for 36 city agencies. This data is updated regularly and provides additional insight and context to 144 unique services and 238 service goals established by agencies.

“My office developed a comprehensive data tool to increase transparency and accountability, while advancing innovation in government data availability and accessibility,” DiNapoli said. “Looking at performance management and service delivery at city agencies is critical when serving more than 8 million New Yorkers. City officials can use our findings to inform and improve managerial decisions and resource allocation, and the public can see what progress is being made with city services.”

Key Highlights:

Staffing Has Not Rebounded at Many Agencies

New York City’s public workforce stood at 306,248 employees at the end of City Fiscal Year (CFY) 2024, but staffing at the city Law Department (1,396), Fire Department (17,095), Administration for Children’s Services (6,455), Department of Health and Mental Hygiene (5,372) and Department of Investigation (270) remain below pre-pandemic levels. A decline in staffing since 2019 at these agencies coincides with a reported decline of at least 50% of tracked services.  For example, the Law Department saw the number of cases pending in state courts grow from 22,611 in June 2019 to 32,873 in June 2024, a 45% increase. While the Department of Investigation saw case times balloon from 145 days in June 2019 to 297 days in June 2024, a 105% increase. 

Some Agencies Delivered Improved Services

Eight of 36 city agencies saw an improvement in at least 50% of tracked services from 2019 to 2024, including the Departments of Citywide Administrative Services, Homeless Services and Youth and Community Development. Some of these agencies did this while remaining below pre-pandemic staffing levels, while others like the Department of Youth and Community Development and Parks and Recreation increased staff. Parks planted 38% more trees in the city in June 2024 compared to June 2019. Homeless services reduced the time people were in shelters by 10% for single adults, 28% for families, and 19% for families with children when comparing June 2019 to June 2024. 

Some Improvements and Declines in Delivery of Critical Indicators

Critical indicators are defined by the city as necessary for an agency’s operations. Twelve agencies delivered improved critical services, including the Departments of Citywide Administrative Services, Homeless Services, Correction, Probation, Parks and Recreation and the Taxi and Limousine Commission. For example, the Department of Citywide Administrative Services is processing civil service exam results more quickly, from 323 days in June 2019 to 276 days in June 2024, 15% faster.

However, 11 of 36 agencies covered in the monitoring tool saw at least 50% of their critical indicators decline, including the Chief Medical Examiner, the Department of Transportation and the Administration for Children’s Services. For example, the median time to complete autopsy reports increased by 90% from 48 days in June 2019 to 91 days in June 2024 at the Office of the Chief Medical Examiner.

DiNapoli recommends the city improve transparency by:

Enhancing the quality of the data it collects by ensuring agencies have reported in a timely, accurate and complete manner.

Including an agency’s division-level staffing and funding information alongside service performance in management reports to best evaluate goals and programming.

Creating classifications for performance indicators, including 311 services, based on whether they measure service demand, workload capacity or performance outcomes.

Report

Click New York City Agency Services Update to access Comptroller DiNapoli's report posted on the Internet.