Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week ending April 19, 2013 [Click on text highlighted in bold to access the full report] 

Office of Alcoholism and Substance Abuse Services, Contract with Daytop Village, Inc (Follow-Up) (2011-F-18)
The Office of Alcoholism and Substance Abuse Services (OASAS) oversees programs for preventing and treating alcohol and substance abuse. Many of these programs are provided by not-for-profit organizations. One such contract is with Daytop Village Inc. under which OASAS paid Daytop about $97 million through the end of 2009. In an initial report, auditors found that Daytop did not fulfill its fiscal responsibilities under the contract and as a result, OASAS paid Daytop $11.5 million more than it was entitled to. In a follow-up report, auditors found OASAS has made progress correcting the problems.

Office of Alcoholism and Substance Abuse Services, Chemical Dependency Program Payments to Selected Contractors in New York City (Follow-Up) (2011-F-17)
In an initial report, auditors examined $8.4 million in payments made to the two contractors and found that neither contractor could provide documentation showing that the expenses reimbursed by these payments related to authorized contract activities. Auditors recommended OASAS recover the $8.4 million. In a follow-up report, auditors determined OASAS has made progress in addressing the matters.

New York State Health Insurance Program, United HealthCare: Compensation and Benefit Costs for the Empire Plan for the Period January 1, 2008 through December 31, 2010 (2011-S-50)
The New York State Health Insurance Program provides health insurance coverage to more than 1.2 million active and retired state employees, participating local government employees and school district employees and their dependents. NYSHIP includes several health plan options, of which the Empire Plan is the largest. The Department of Civil Service contracts with United HealthCare (United) to process and pay medical and surgical claims for services provided to Empire Plan members. The state’s contract with United requires all administrative costs charged to the state to be related to United’s administration of the Empire Plan’s medical/surgical program. In addition, a state contractor must maintain complete and accurate records to support its claims for six years. United did not always maintain certain source and summary data to support the charges for time worked by claims and call center staff assigned to the Empire Plan. United also did not have a uniform method to track and account for the time worked by claims center staff.

Department of Health, Medicaid Payments for Excessive Dental Services (Follow-Up) (2012-F-30)
An initial audit report examined Medicaid payments for routine dental services provided during the period September 1, 2004 through August 31, 2009. The audit identified $40 million of excessive dental services that exceeded certain frequency limits. Auditors also determined that if DOH adjusted its Medicaid fees for these services to the averages of other comparable states, it could have saved more than $60 million during the audit period. In a follow-up report, auditors found DOH officials have made progress in addressing several of the issues previously identified. In particular, changes to payment schedules for routine dental services saved Medicaid more than $11 million. However, additional actions still need to be taken.

Department of Motor Vehicles, Motor Vehicle Financial Security and Safety Responsibility Acts Statement of Assessable Expenses for the Three Fiscal Years Ended March 31, 2011 (2012-S-25)
New York State’s Vehicle and Traffic Law stipulates that the DMV commissioner and the Office of the State Comptroller shall ascertain the total amount of expenses the Department of Motor Vehicles incurs in its administration of the Motor Vehicle Financial Security Act and the Motor Vehicle Safety Responsibility Act. Auditors found the statements for those acts reflect the expenditures of the two acts for the three fiscal years ended March 31, 2011, in accordance with cash basis accounting.

Also: Statewide Travel Audits of the following entities were issued

As part of a statewide initiative to determine whether the use of travel money by selected government employees was appropriate, auditors looked at travel expenses for the highest-cost travelers in the state for the following state entities:

New York State Department of Financial Services, Selected Employee Travel Expenses (2012-S-77)
Auditors found ten of the highest-cost travelers  worked at the New York State Department of Financial Services and had travel costs totaling $1,248,144. Auditors also examined other travel totaling $627,902. Auditors were only able to audit two of the three years of travel expenditures totaling $1,876,046 because the DFS was not required to and did not maintain records prior to April 2009. The travel expenses for the 27 employees selected for audit were documented and adhered to state travel rules and regulations. Most of the employees were either insurance or bank examiners; while the rest were executive managers and administrative staff. The majority of travel expenses for the 27 department employees included lodging, airfare, train fare, fuel charges and meal reimbursements.

Division of Military and Naval Affairs, Selected Employee Travel Expenses (2012-S-130)
Auditors identified two travel cards used by staff at the Division of Military and Naval Affairs as high risk due to substantial charges for car rentals. The total costs associated with these travel cards was $118,843. Auditors found that the travel expenses for the two travel cards selected for audit were documented and adhered to state travel rules and regulations.

State University of New York, University at Buffalo - Selected Employee Travel Expenses (2012-S-135)
Twelve of the state’s highest cost travelers worked at the University at Buffalo (University) and had travel costs totaling $3,593,928. We also audited one employee with an outlier in fuel expenses that totaled $45,882. In total, auditors examined $3,639,810 of the University’s travel payments. They found the travel expenses for the 13 university employees selected for audit were documented and adhered to state travel rules and regulations. The 13 employees are athletic coaches or administrative staff whose travel consisted primarily of team travel to athletic events.

Neither a judicial or quasi-judicial administrative proceeding may be conducted on a Saturday where such day is kept as a holy day by any party to the case or on a Sunday

Neither a judicial or quasi-judicial administrative proceeding may be conducted on a Saturday  where such day is kept as a holy day by any party to the case or on a Sunday

May judicial or quasi-judicial proceeding be conducted on a Sunday?

This was one of the issues raised by the petitioner in her CPLR Article 78 petition seeking to vacate the appointing authority’s disciplinary determination that resulted in her being dismissed from her position. The petitioner contended that she was impermissibly discharged from her position because one of the dates on which her disciplinary hearing was conducted was a Sunday, citing Judiciary Law §5.

Judiciary Law §5, in pertinent part, provides that: “A court shall not be opened, or transact any business on Sunday, nor shall a court transact any business on a Saturday in any case where such day is kept as a holy day by any party to the case, except to receive a verdict or discharge a jury and for the receipt by the criminal court of the city of New York or a court of special sessions of a plea of guilty and the pronouncement of sentence thereon in any case in which such court has jurisdiction.”

In rebuttal, the appointing authority argued that out of “a multiple day hearing, only one of the days was a Sunday, and therefore the proceedings cannot be held invalid.”

Supreme Court Justice Catherine M. Bartlett disagreed with the argument advanced by the appointing authority, annulling the appointing authority’s' decision and remanding the matter for “a new hearing and determination de novo in compliance with New York law Judiciary Law §5.

The court, citing Jones v E. Meadow Fire Dist., 21 AD2d 129, explained at common law no judicial act could be done on Sunday; and, in the absence of a permissive statute, a judge had no authority to hold court or to conduct a trial on Sunday.  Judiciary Law §5, said the court, was enacted as a substitute for the common-law rule. The Jones court held that “quasi-judicial proceedings such as disciplinary proceedings before a review board fall under Judiciary Law §5's auspices.”*

On a related point, Justice Bartlett also noted that the mandates of Judiciary Law §5 may not be waived by a party as §5 expresses the public policy of the State.

* In Matter of Brody [Owen], 259 App.Div. 720, the Appellate Division held that an arbitration hearing and award were both “illegal and void,” because both occurred on a Sunday and “An arbitration is a judicial proceeding and arbitrators perform a judicial function.”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_23122.htm

Performing “out of title” work may be lawful under certain circumstances

Performing “out of title” work may be lawful under certain circumstances

New York State Corr. Officers & Police Benevolent Assn., Inc. v Governor's Off. Of Empl. Relations, 2013 NY Slip Op 02445, Appellate Division, Third Department

Kevin Ashby was employed as a correction sergeant, SG 17, by the NYS Department of Corrections and Community Supervision [DOCCS]. Ashby filed two out-of-title work* grievances alleging that on eight occasion in April 2010 and seven occasions in June 2010 he was assigned as shift supervisor, thereby requiring him to perform the work of a correction lieutenant, salary grade 20, and he sought to be compensated accordingly.

The Governor’s Office of Employee Relations [GOER] denied all 15 grievances and Ashby appealed.

The Appellate Division though it noteworthy to comment that during the administrative review processes before GOER the only evidence that was presented concerning the duties that Ashby actually performed on the relevant dates was submitted by DOCCS.

Neither Ashby nor his union submitted any information regarding the facts surrounding the grievances or specific duties that Ashby performed. Although the collective bargaining agreement [CBA] provided the union the right, to submit to DCC a "written brief of the facts surrounding the grievance," during the administrative appeal to the GOER, it never did so.

Ashby, while assigned as shift supervisor, did perform some duties that are listed in the classification standard of a correction lieutenant. However, the Appellate Division noted that “there are many duties that a correction lieutenant performs pursuant to the classification standard that [Ashby] never performed.” In addition, the court said that “While there is some overlap between the duties that [Ashby] performed and the duties of a correction lieutenant, most of the duties that he performed fall within or are a reasonable outgrowth of the duties of his current position.

The Appellate Division sustained GOER’s determination, explaining that “Given the similarities between the duties actually performed by [Ashby] as a shift supervisor and those enumerated in the correction sergeant classification standard, … the infrequent nature of such assignments and the absence of evidence establishing that [Ashby] performed a distinctive aspect of the correction lieutenant job title (namely, supervision of correction sergeants), GOER's determinations are supported by a rational basis in the records.” 

Also noted was that although “Civil Service Law 61(2) seemingly provides an ‘unqualified prohibition against nonemergency out-of-title work, case law has made the standard somewhat more flexible based on practicality’" as demonstrated by the decisions in Sprague v Governor's Off. of Empl. Relations, 13 AD3d at 850; City of Saratoga Springs v Saratoga Springs Civ. Serv. Commn., 90 AD3d at 1400; and Cushing v Governor's Off. of Empl. Relations, 58 AD3d 1095.

May a Taylor Agreement provided that an employee who was offered a temporary or acting higher level position and who was on a Civil Service eligible list for such position shall be required to accept and perform the duties of the higher level position or "the employee shall remove his name from the Civil Service eligible list?"

The employer sought a judgment declaring such a contract provision valid notwithstanding the fact that §61.2 of the Civil Service Law prohibited such out of title work "... except ... during ... a temporary emergency situation.…”

In City of Newburgh v Potter, 168 A.D.2d 779, motion for leave to appeal denied 78 N.Y.2d 857, the Appellate Division concluded that the contract provision was not valid as a waiver of statutory rights and declared the contract provision void and of no force and effect.

Another possible “out-of-title” work situation was the genesis of Yanis v McGuire, 98 A.D.2d 669, affirmed 62 N.Y.2d 723. Yanis, employee with a special skill or talent, his knowledge of both English and Spanish, refused to accept an assignment that required his use of that skill or talent.

Is an employee subject to disciplinary action if he or she refused to accept the assignment? The Appellate Division said he or she could be subjected to disciplinary action based on his or her refusing the assignment.

Yanis, because of his knowledge of both English and Spanish, was instructed to aid detectives in the interrogation of a Spanish speaking witness to a homicide. Yanis failed to report for the assignment and in the disciplinary action that followed the hearing officer found that Yanis' refusal to serve as an interpreter was unjustified and a violation of a reasonable order.

The disciplinary penalty imposed: Yanis could forfeit of six days of vacation credit or he could elect to perform extra tours in lieu thereof.

According to the decision, Yanis had previously served as an interpreter on some 40 occasions in connection with police work and that the "true motive" in refusing to serve as a translator was "his desire to be compensated or to be recognized with a detective designation for what (Yanis) claimed was a special skill."

The dissenting opinion by Justice Asch suggests that the use of such special skill or talent might, under certain circumstances, constitute “out-of-title work.” Accordingly, Justice Asch opined that the assignment could be lawfully refused “unless an emergency situation existed” as the title "interpreter" exists in the New York City Police Department.

.

* An out-of-title work assignment exists when an employee has been assigned or compelled to perform the duties of a higher grade, without a concomitant increase in pay, frequently, recurrently and for long periods of time . . ." (see Caruso v Mayor of Vil. of S. Glens Falls, 278 AD2d 608

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02445.htm

A CPLR Article 78 challenge to the validity of an employee’s resignation must be filed within four months of the date of the resignation

A CPLR Article 78 challenge to the validity of an employee’s resignation must be filed within four months of the date of the resignation

Reo v Village of Lawrence, 2013 NY Slip Op 02403, Appellate Division, Second Department

Daniel S. Reo was initially employed by the Village of Lawrence in the title Laborer.

According to the decision, in 2007 Reo resigned from this position to accept a position Sewer Plant Attendant with the Village and served in this title until 2009, when he resigned and sought reemployment in his former position, Laborer, with the Village.

As this would be a new Laborer position the Village was required to secure approval of that position from the Nassau County Civil Service Commission pursuant to Civil Service Law §22.*

As a condition of its approval of this new position the Commission asked the Village for its assurance that Reo “would only be performing duties appropriate for the laborer title.” The Village, however, decided to give those assurances to the Commission and terminated Roe’s employment effective January 7, 2011.**

Roe filed a petition pursuant to Article 78 of the CPLR challenging “the validity of his resignations in 2007 and 2009 and sought a court order directing the Village to reinstate him. Supreme Court denied the petition and dismissed the proceeding.

The Appellate Division said that Roe’s challenges to the validity of his resignations*** were barred by the four-month statute of limitations applicable to proceedings pursuant to CPLR Article 78. Further, said the court, “the termination of [Roe’s] employment in the new position of Laborer was not arbitrary and capricious or affected by an error of law."

* CSL §22, in pertinent part, provides that “[b]efore any new position in the service of a civil division shall be created … the proposal therefor, including a statement of the duties of the position, shall be referred to the municipal commission having jurisdiction and such commission shall furnish a certificate stating the appropriate civil service title for the proposed position …. “

** Although the decision is silent regarding Roe’s employment status between 2009 and January 2011, presumably he was appointed to “temporary position” of Laborer pending the Commission’s classification, approval and certification of the new position pursuant to CSL §22.

*** Typically once the employee has delivered his or her resignation to the appointing authority or its designee, he or she may not withdraw or rescind the resignation without the approval of the appointing authority. For example, 4 NYCRR 5.3(c),which applies to employees in the classified service of the State and public authorities, public benefit corporations and other agencies for which the Civil Service Law is administered by the State Department of Civil Service, provides that “A resignation may not be withdrawn, cancelled or amended after it is delivered to the appointing authority, without the consent of the appointing authority.” Many local civil service commissions and personnel officers have adopted a similar rule. 

The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2013/2013_02403.htm

Courts will reject an untimely demand to submit a matter to arbitration

Courts will reject an untimely demand to submit a matter to arbitration

Town of Orangetown v Rockland County Policemen's Benevolent Assn., 2013 NY Slip Op 02408, Appellate Division, Second Department

In this CPLR Article 75 the Town of Orangetown petitioned Supreme Court seeking an order to permanently stay an arbitration demanded by the Rockland County Policemen’s Benevolent Association and the Town of Orangetown Policemen's Benevolent Association.

Both Associations, on the other hand, asked the court to issue an order to “compel arbitration.”

Although the Town contended that demand for arbitration was untimely, Supreme Court granted the Associations’ petition. The Appellate Division, however, revered the lower court’s ruling, vacated the order, and granting the Town’s petition to permanently stay the arbitration.

The Appellate Division explained that under New York statutory and case law, a court may address three threshold questions on a motion to compel or to stay arbitration:

1. Whether the parties made a valid agreement to arbitrate;

2. If so, whether the agreement has been complied with; and

3. Whether the claim sought to be arbitrated would be time-barred if it were asserted in State court.

Finding that the grievance the Association sought to be arbitrated was time-barred under the applicable 18-month statute of limitations, the Appellate Division held that Supreme Court erred in denying the Town’s petition to permanently stay arbitration and granting the Association’s cross motion to compel arbitration.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02408.htm

A board may not appoint one of its own members to a vacant position under it jurisdiction

A board may not appoint one of its own members to a vacant position under it jurisdiction
Fishman v Board of Educ. of S. Country Cent. Sch. Dist, 2013 NY Slip Op 02394, Appellate Division, Second Department

Roberta Fishman filed a CPLR Article 78 petition challenged a resolution of the Board of Education of the South Country Central School District appointing Gregory C. Miglino, Jr. to the position of Building Services Administrator Miglino was a then member of the Board.

Supreme Court’s ruling annulling the Board’s resolution appointing Miglino to the position. In the words of Supreme Court Justice Paul J. Baisley, "… the Court determines and declares that the Board Action in creating the position … and appointing its member and president Gregory C. Miglino, Jr. to the position was arbitrary and capricious … and accordingly is null and void.”

Miglino appealed the decision but the Appellate Division affirmed Justice Baisley's decision. The Appellate Division held that Supreme Court had correctly determined that the action of the Board in appointing one of its present members to the position of Building Services Administrator was “illegal and improper,” citing Wood v Town of Whitehall, 120 Misc 124, affd206 App Div 786.*

In Whitehall the court ruled that a board may not appoint one of its members to a position under its jurisdiction as such an action is contrary to public policy and the general welfare. Further, the Attorney General has indicated that the recusal of the member of the board to be appointed does not remedy the conflict of interests (1995 Informal Opinions of the Attorney General1074).

The Association of Towns has observed that “in the absence of a state law, local law or session law to the contrary,” a board is bound by the Whitehall doctrine.

The Whitehall decision is posted on the Internet at:

* http://decisions.courts.state.ny.us/fcas/fcas_docs/2012FEB/51002913120103SCIV.pdf

The Fishman decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2013/2013_02394.htm

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli

Issued during the week ending April 12, 2013 [Click on text highlighted in bold to access the full report] 

Town of Amsterdam – Supervisor’s Records and Reports (Montgomery County)
The town supervisor does not maintain timely or accurate accounting records for the town. Therefore, the accounting records do not support the AUDs filed in 2010 and 2011. The town board does not receive all the financial information it needs to monitor the town’s financial operations. Additionally, auditors found discrepancies between bank reconciliations and account balances documented in the town’s accounting records.

Village of Cuba – Sewer Fund Financial Condition and Records and Reports (Allegany County)
The village board did not adopt budgets for the sewer fund that provided sufficient revenues to finance expenditures, because revenues were consistently overestimated. Auditors also found that the clerk-treasurer did not maintain the village’s accounting records in a complete and accurate manner. Specifically, cash, accounts receivable and accounts payable were misstated, which resulted in the operating funds’ fiscal health appearing to be more favorable.

Village of Dannemora – Internal Controls Over Cash Receipts (Clinton County)
The village has informal procedures over the collection of cash receipts for water and sewer rents and property taxes.  The clerk-treasurer prepares billings, enters receipts into the accounting system, reconciles customer accounts, prepares bank deposits and reconciles bank statements without any additional verification or assistance.

Village of Delanson – Internal Controls Over Selected Financial Operations (Schenectady County)
The village clerk and treasurer both perform incompatible cash disbursement duties and compensating controls have not been established. The village board does not require claims to be adequately documented or appropriately audit and approve all claims. Also, the clerk did not collect all interest and penalties due on overdue real property tax and water rent payments or properly record and report to the county unpaid water rents for re-levy.

Downtown Ithaca Business Improvement District – Disbursements (Tompkins County)
The Executive Director did not ensure that disbursements were for proper DIBID purposes. Although the claims reviewed by auditors appeared to be for reasonable DIBID expenditures, without proper supporting documentation such as receipts, invoices, or bills attached to the claims, taxpayers do not have any assurance that these monies were used for valid DIBID purposes.

Village of Hoosick Falls – Internal Controls Over Selected Operations (Rensselaer County)
The village board has not adopted policies establishing responsibilities and duties for handling cash and maintaining accounting records. As a result, the treasurer has filed the village’s annual financial report an average of 221 days past the due date from 2008 through 2011. Further, the board has not implemented compensating controls to address the lack of segregation of duties performed by the treasurer.

Village of Nelsonville – Financial Operations (Putnam County)
The village board did not develop policies and procedures for the clerk-treasurer to follow when performing cash receipts and disbursement duties and did not audit the clerk-treasurer’s financial records. Further, the board did not ensure bank reconciliations were performed or that the village payroll was properly certified.

Town of Schroon – Internal Controls Over Transfer Station Operations (Essex County)
The town does not reconcile the amount of money collected with the amount of trash disposed at the transfer station. Auditors found that over a three-month period in 2012, the weight of the solid waste the town paid to dispose of at the county landfill exceeded the amount of trash accounted for as being received at the transfer station, resulting in approximately $10,000 in missing revenues. Auditors also found weak internal controls over cash receipts and poor monitoring of solid waste received at the transfer station.

Village of Victory – Audit Follow Up (Saratoga County)
Auditors found that the village has made limited progress in implementing our recommendations. Of the eight audit recommendations, two recommendations were implemented, four recommendations were partially implemented and two recommendations were not implemented.

Helping Students Get Course Credit: Credit Recovery Programs in School Districts (2012MS-8)
Auditors found that all eight school districts reviewed provided evidence to show, to the State Education Department’s (SED) satisfaction, that Credit Recovery Programs (CRPs) aligned with state learning standards. SED’s current measure of satisfactory alignment, however, is very easy to meet. More explicit expectations for demonstrating alignment with current standards would provide better assurance that online CRPs provide intensive instruction in a subject that is equivalent to teacher-provided classroom instruction.

Fabius-Pompey Central School District – Budget Review (Onondaga County)
Auditors found that the significant revenue and expenditure projections in the proposed budget are reasonable. The school district’s proposed budget currently includes a tax levy that is over the statutory limit by $58,246.

North Colonie Central School District – Claims Processing (Albany County)
The school board adopted claims processing policies which require all claims to be audited prior to payment except for certain allowed exceptions. District policy requires the claims auditor to ensure that all claims are properly authorized, itemized, supported and that goods and services have been received in the amount and price as ordered prior to payment.