Selected Reports issued by the Office of the State Comptroller during the week ending December 11, 2015

Selected Reports issued by the Office of the State Comptroller during the week ending December 11, 2015

Click on text highlighted in color to access the full report 

Former pharmacist pleads guilty in $232,000 fake prescriptions scam involving Medicaid and the New York State Health Insurance Program (NYSHIP)

A former Long Island pharmacist admitted today he faked prescriptions to steal $232,000 in a fraud that was uncovered in two audits*by State Comptroller Thomas P. DiNapoli’s office.

The Comptroller reports that William Davis, the former owner of Davis Ethical Pharmacy in Rockville Centre, pleaded guilty to grand larceny in the second degree in Nassau County District Court for sending phony prescription records for reimbursement to Medicaid and the New York State Health Insurance Program (NYSHIP) from 2008 through 2011.

Davis, who currently resides in Lake Ariel, Pennsylvania, agreed to make full restitution of $231,919 on or before his sentencing on January 27.

The improper payments were exposed when the Comptroller examined around $7 million in claims paid to Davis. NYSHIP provides health insurance to some state and local government and school district employees and their families. The state Medicaid Program provides prescription drug coverage for enrollees.

* To read the two audit reports, visit: http://www.osc.state.ny.us/audits/allaudits/093013/12s11.pdfand http://www.osc.state.ny.us/audits/allaudits/093013/12s10.pdf

Halfmoon Town Supervisor Sentenced to 12 months in prison

Former Halfmoon Town Supervisor Melinda Wormuth was sentenced to one year and one day in prison as a result of her convictions for extortion and making a false statement, announced State Comptroller Thomas P. DiNapoli and United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.

http://www.osc.state.ny.us/press/releases/dec15/121015b.htm?utm_source=weeklynews20151213&utm_medium=email&utm_campaign=121015brelease 


New York State Comptroller Thomas P. DiNapoli published the following audits:

State Education Department: United Cerebral Palsy Association – Rochester area: compliance with reimbursable cost manual

For the year ended Dec. 31, 2013, auditors identified $6,634 in costs charged to special education programs that did not comply with SED’s requirements for reimbursement. Auditors also questioned the appropriateness of $1,544 in costs for consultant services that did not comply with bidding requirements.

http://osc.state.ny.us/audits/allaudits/093016/14s75.pdf

New York City Department of Finance: Controls and Accountability of Court, Trust and Bail Funds

An initial audit issued in April 2014, determined that NYC Department of Finance’s Court Assets Department could not accurately account for court, trust and bail funds. The department also could not demonstrate that it applied the full, correct amount of interest to the Court and Trust accounts. In a follow-up, auditors found Finance officials have made progress in correcting each of the problems identified in the earlier report.  Of the eight recommendations prior recommendations six were implemented and two were partially implemented.

http://osc.state.ny.us/audits/allaudits/093016/15f16.pdf

United HealthCare Insurance Company of New York: Empire Plan Drug Rebate Revenue

An audit report, issued in September  2014, identified $694,227 in drug rebate and discount revenue that was not credited to the Department of Civil Service for the period Jan. 1, 2010 through Dec. 31, 2012. Auditors recommended that UHC remit to the department the $694,227 in rebate and discount revenue identified by the audit, and fully comply with contract provisions that require timely audit access to all documents and information deemed necessary. In a follow-up report, auditors found UHC officials made some progress in implementing the recommendations made in the initial audit report, including remitting $670,470 in additional drug rebate and discount revenue to the department.

http://osc.state.ny.us/audits/allaudits/093016/15f23.pdf

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236. Review prior cases at http://www.osc.state.ny.us/investigations/index.htm. 

Courts must defer to an agency's interpretation of its own regulations in its area of expertise

Courts must defer to an agency's interpretation of its own regulations in its area of expertise

Abramoski v New York State Educ. Dept., 2015 NY Slip Op 08880, Appellate Division, Third Department

Reacting to declining enrollment at West Park Union Free School District Number Two [West Park #2], a special act school district created by special legislation in 1973 for the purpose of educating residents of a facility for adolescent girls with emotional disabilities, the West Park School Board [Board] resolved to begin the process of dissolving West Park #2.

The Board notified the State Education Department [SED] of its decision to cease operation of West Park #2 and SED informed the Board of its various responsibilities during the close-down period, including calculating the District's close-down costs.

These costs included the cost of [1] educating students during the final year of operation and [2] any outstanding financial obligations. In response to a question concerning whether the costs of certain contractual obligations that the Board had to pay employees for their post-retirement health and dental insurance coverage for their respective lifetimes would be included in the tuition rate for the close-down period, SED informed the Board that the cost of such lifetime insurance coverage for the District's retirees would not be included in the close-down tuition rate.

Maureen Abramoski and a number of other employees [Abramoski] challenged SED’s determination with respect to excluding the cost of Abramoski's post-retirement medical and dental insurance in the close-down tuition rate of a special act school district. Abramoski ultimately initiated a “combined CPLR Article 78 proceeding and plenary action against SED and other named defendants seeking, among other things, [1] a review of SED's determination excluding the costs related to Abramoski’s lifetime post-retirement health and dental insurance coverage in the close-down tuition rate, [2] an order directing the reinstatement of such post-retirement health insurance and dental insurance coverage and [3] damages for breach of contract. Supreme Court dismissed Abramoski’s various motions and petitions concerning such benefits and she appealed.

The Appellate Division affirmed the Supreme Court rejection of Abramoski’s claims, explaining that a court's review of an administrative determination such as the one at issue in this action is limited to whether the determination was arbitrary and capricious, lacked a rational basis or was affected by an error of law. Here, said the court, SEC's determination was neither arbitrary nor capricious, was rational and was not affected by an error of law.

Further, said the Appellate Division, “courts must apply deference to an agency's ‘interpretation of its own regulations in its area of expertise,’" noting that 8 NYCRR 200.9(f)(1)(i) provides that the tuition rate at issue "shall include administration and direct care costs and the costs of operation and maintenance of instructional facilities." 

The court’s conclusion: Abramoski’s lifetime post-retirement health and dental insurance coverage should not be considered in the close-down tuition rate, sustaining SED’s interpreting of 8 NYCRR 200.9(f)(1)(i) to exclude long-term outstanding debt obligations "that were largely — if not entirely — unrelated to the costs of providing an education to the students attending the District during the relevant tuition period." SED’s interpretation, said the court, “is reasonable and is consistent with a statutory and regulatory scheme that evinces an intent to tailor tuition rates to those costs reasonably related to the special act school district's provision of services to students during the relevant tuition period.”

The Appellate Division also rejected Abramoski’s contention that SED violated her constitutional rights to due process and equal protection as being without merit, explaining that SED was not a party to the contracts that provided Abramoski’s rights to lifetime post-retirement health and dental insurance coverage. The fact that SED's determination may have incidentally affected Abramoski’s ability to collect such benefits, said the Appellate Division, does not support her allegations of constitutional violations.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08880.htm

NYC school principal’s appeal of a disciplinary action brought by the NYC Department of Education pursuant to Education Law §3020 sustained in part

NYC school principal’s appeal of a disciplinary action brought by the NYC Department of Education pursuant to Education Law §3020 sustained in part

Decisions of the Commissioner of Education, Decision #16,848

A NYC school principal [Principal] was found guilty of certain disciplinary charges by an arbitrator pursuant to Education Law §3020(3), appealed the arbitrator’s determination.

The Commissioner ruled that the Principal’s appeal must be sustained in part, noting that Education Law §3020, as amended by adding a new subdivision 3, the City School District of the City of New York and any employee organization representing employees or titles that are or were covered by any memorandum of agreement executed by the District and the Council of Supervisors and Administrators of the City of New York to negotiate agreements that modify or replace the procedures set forth in Education Law §§3020-a and 2590-j(7).  §3020(3). The Commissioner also noted that “the Commissioner shall review any appeals brought in accordance with such agreements.”

Pursuant to Education Law §3020(3), the Council and the District entered into an agreement [Agreement] establishing a modified disciplinary procedures that, to the extent relevant in this appeal, provided that “at the principal’s option, allegations of misconduct may be presented to an impartial arbitrator who will decide whether just cause exists for the proposed action.”

The agreement further provides that, at the request of the principal, the Chancellor of the New York City Department of Education [Chancellor] may review the arbitrator’s decision, “which review must be complete within 15 days of such decision.”  The Agreement provides that “[t]he employee shall be provided with written notice of the outcome of the Chancellor’s review.”  If the Chancellor implements the arbitrator’s decision against the principal, the principal may then apply to the Commissioner of Education for review of the arbitrator’s decision.

The arbitrator issued a final decision on June 20, 2015, finding Principal guilty of certain charges and specifications and imposed a penalty of suspension, such suspension to terminated effective July 1, 2014. 

Although the Principal wrote asking the Chancellor seeking a review the arbitrator’s decision within 15 days and providing her with a written notice of the outcome of the Chancellor’s review in timely fashion, the record indicates that Principal did not receive any response.  On August 19, 2015, the Principal commenced this appeal from the hearing officer’s determination, contending that the arbitrator’s determination was arbitrary, capricious, irrational, and unsupported by the evidence. 

The Commissioner said that she would not render an advisory opinion on an issue before it becomes justiciable, explaining that Article VII(J)(4)(a)(6) of the Agreement clearly provides that either the superintendent or the principal [1] may request a review of the arbitrator’s decision by the Chancellor and if such a request is timely made, [2] requires the Chancellor to complete such review within 15 days and which further requires the Chancellor to provide the employee with written notice of the outcome of the review.  

Thus, said the Commissioner, the Agreement contemplates that the Chancellor “will review the arbitrator's decision, and render a decision of her own.” 

Noting that Commissioner’s regulations implementing Education Law §3020(3) are set out in 8 NYCRR Part 281 and are consistent with provisions in the Agreement, the Commissioner said that record before her contained no such decision by the Chancellor. 

Although the Principal interpreted the Chancellor’s silence as a default, entitling her to appeal the hearing officer’s decision directly to the Commissioner, the Commissioner said that there was no authority for such an action. 

Accordingly, the Commissioner ordered “the Chancellor to review the [arbitrator’s] decision and provide [the Principal] with written notice of the outcome of such review within 15 days of the date of [the Commissioner’s] decision in accordance with Article VII(J)(4)(a)(6) of the Agreement.”

The Commissioner also noted that the Principal “retains the right to commence a new appeal to the Commissioner in the event that the Chancellor implements the hearing officer’s decision” within 15 days from the Principal’s receipt of written notice of the Chancellor’s decision in the event the Principal is unhappy with the Chancellor’s decision.

 

The Commissioner’s decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume55/d16848

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The Discipline Book - A 458 page guide focusing on New York State laws, rules, regulations, disciplinary grievances procedures set out in collective bargaining agreements and selected court and administrative decisions concerning disciplinary actions involving state and municipal public officers and employees. For more information click on http://booklocker.com/5215.html

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Recent decisions by NYC Office of Administrative Tribunals and Hearing Administrative Law Judges

Recent decisions by NYC Office of Administrative Tribunals and Hearing Administrative Law Judges

Click on link in highlighted in color to access the text of the decision

Unnecessary use of force on inmates

OATH Index No. 156/16

ALJ Alessandra F. Zorgniotti found that a New York City correction officer violated the Department's use of force directive on two occasions by using unnecessary force on inmates who were restrained and also filing a false report. 

ALJ Zorgniotti recommended termination of the correction office's employment.  

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/16_cases/16-156.pdf

Employee served with disciplinary charges after complaining about being denied a "day off" on a holiday

OATH Index No. 2686/15

OATH Administrative Law Judge Kevin F. Casey recommended dismissal of charges alleging an New York City Environmental Police Officer was guilty of “conduct prejudicial to good order and discipline by using inappropriate language” to a superior after finding that the Department failed to show that the officer engaged in misconduct when he complained to a supervisor about being denied the day off on a holiday, in this instance Christmas Day.

The ALJ found that the employee’s supervisor had consented to his repeating his complaint to his co-workers and held that “[a] verbal disagreement or expression of dissatisfaction with a supervisor is not always misconduct, even in a paramilitary setting.”

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/15_cases/15-2686.pdf

Public Officers Law §36 provides for the removal of an individual from public office for self-dealing, corrupt activities, conflict of interest, moral turpitude, intentional wrongdoing or violation of a public trust

Public Officers Law §36 provides for the removal of an individual from public office for self-dealing, corrupt activities, conflict of interest, moral turpitude, intentional wrongdoing or violation of a public trust

Libordi v Isaman, 2015 NY Slip Op 08552, Appellate Division, Fourth Department

Francis Libordi initiated an action in the Appellate Division, 4^th Department, pursuant §36 of the Public Officers Law in an effort to have Kenneth Isaman, a public officer, removed from his position of Town Supervisor of the Town of Hornellsville.*

Libordi alleged that Isaman had been involved in “self-dealing” and had a conflict of interest arising from his employment by an insurance agency that did business with the Town while serving as Town Supervisor. The Appellate Division said that Isaman "conclusively refuted those allegations” and that Libordi failed to present evidence to raise a triable issue of fact with respect to such allegations.

Libordi also alleged another conflict of interest in that Isaman voted at Town Board meetings in favor of appointing his wife to positions with the Town Board, and approving the salaries for her positions.

Noting "[R]emoval from office pursuant to Public Officers Law §36 is an extreme remedy reserved for officials engaged in self-dealing, corrupt activities, conflict of interest, moral turpitude, intentional wrongdoing or violation of a public trust," the court said that [1] Isaman admitted that he should have abstained from those votes and [2] his failure to do so "does not constitute the type of conduct that would warrant removal from office."

The court then unanimously dismissed Libordi’s action.

* Any citizen resident in the jurisdiction, or the appropriate district attorney, may file an application seeking the removal of a public officer enumerated in §36 of the Public Officers Law with the Appellate Division in the appropriate judicial department. §36 requires that a copy of the application and the charges upon which the application is to be made must be served upon the officer at least 8 days prior to such filing. 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2015/2015_08552.htm