Audits of School Districts posted during the week ending October 15, 2016

Audits of School Districts posted during the week ending October 15, 2016

Source: Office of the State Comptroller

[Internet links highlighted in color]

Bradford Central School District – Financial Management (2016M-253)

Purpose of Audit

The purpose of our audit was to evaluate the District's financial management for the period July 1, 2012 through April 15, 2016.

Background

The Bradford Central School District is located in the Towns of Bath, Bradford, Urbana and Wayne in Steuben County and the Towns of Orange and Tyrone in Schuyler County. The District, which operates one school with approximately 275 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $8.8 million.

Key Findings

The Board and District officials have not adopted realistic budgets or effectively managed fund balance and, despite the significant amount of accumulated fund balance, continued to raise the tax levy by an average of 2 percent each year or a total of $350,000 over the last three years.

When unused appropriated fund balance is added back, unrestricted fund balance exceeded the statutory limit by amounts ranging from $1.4 million to $1.9 million or 12.8 to 17.5 percentage points.

Key Recommendations

Ensure budgets include realistic appropriations based on actual needs and planned use of fund balance to avoid levying taxes at a level greater than needed.

Ensure that unrestricted fund balance is in compliance with the statutory limit and develop a plan to use excess fund balance in a manner that benefits District residents.

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Corning City School District – Procurement (2016M-222)

Purpose of Audit

The purpose of our audit was to review the District's procurement practices for the period July 1, 2014 through April 26, 2016.

Background

The Corning City School District is located in the Towns of Big Flats and Catlin in Chemung County; the Towns of Dix and Orange in Schuyler County; and the City of Corning and the Towns of Bradford, Campbell, Caton, Corning, Erwin, Hornby and Lindley in Steuben County. The District, which operates eight schools with approximately 4,800 students, is governed by an elected nine-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $102.5 million.

Key Findings

The District's procurement policy does not include procedures for the procurement of professional services.

District officials did not always solicit competition through requests for proposals or obtain or retain quotes or bids.

Key Recommendations

Revise the procurement policy to include clear language addressing the procurement of professional services and require strict adherence to the requirements of the procurement policy.

Solicit competition for professional service contracts and ensure that written or verbal quotes are obtained for purchases that are under bidding thresholds.

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East Moriches Union Free School District – Claims Processing (2016M-273)

Purpose of Audit

The purpose of our audit was to examine claims processing for the period July 1, 2014 through May 31, 2016.

Background

The East Moriches Union Free School District is located in the Town of Brookhaven, Suffolk County. The District, which operates two schools with approximately 730 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $25.8 million.

Key Findings

The claims auditor did not properly identify and report all confirming purchase orders to the Board.

The Treasurer did not supervise an account clerk typist's use of her electronic signature to sign the District’s checks.

Key Recommendations

Properly identify and report to the Board all instances of confirming purchase orders.

Discontinue the practice of allowing the Treasurer's electronic signature to be affixed to checks without direct authorization or supervision.

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Merrick Union Free School District – Financial Condition (2016M-240)

Purpose of Audit

The purpose of our audit was to evaluate the District's financial operations and use of fund balance for the period July 1, 2014 through December 31, 2015.

Background

The Merrick Union Free School District is located in the Town of Hempstead, Nassau County. The District, which operates three schools with approximately 1,480 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $46.9 million.

Key Findings

The Board adopted budgets that overestimated expenditures by a total of $9.3 million and underestimated revenues by a total of $2.8 million from July 1, 2012 through June 30, 2015.

The District's unrestricted fund balance exceeded the statutory maximum for each of the three years reviewed.

Fund balance appropriated by the Board was not used.

The district did not use its reserve funds during the audit period but instead used operating funds to pay for related costs.

Key Recommendations

Adopt budgets that realistically reflect the District’s operating needs based on historical trends or other identified analysis.

Develop a written plan to reduce the level of unrestricted fund balance to legal limits and consider revising the District’s fund balance policy to require compliance.

Discontinue the practice of appropriating unexpended surplus funds that are not needed and not used to fund District operations.

Ensure that reserve funds are used for their intended purpose.

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Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability 110 State Street, 12th Floor; Albany, NY 12236

New York State Comptroller audit reveals the State’s Health Department overpaid certain Medicaid Managed Care premiums

New York StateComptroller audit reveals the State’s Health Department overpaid certain Medicaid Managed Care premiums

Source: Office of the State Comptroller [Internet links highlighted in color]

The state Department of Health (DOH) overpaid managed care organizations nearly $19 million for the state fiscal year 2014-15, in part, because of a flaw in how it calculated premiums, according to an auditreleased on October 13, 2016 by New York State Comptroller Thomas P. DiNapoli. Auditors warned that another $56.8 million was at risk of overpayment over the next three years due to the flaw.

Additionally, DiNapoli’s auditors found DOH, because it had not provided sufficient cost reporting guidance, is missing out on millions in annual savings it is supposed to realize through reforms recommended by the state’s Medicaid Redesign Team. The department also failed to collect $38.6 million in actuarial costs, incurred since 2009, from managed care organizations (MCOs).

For the state fiscal year ended March 31, 2015, New York’s Medicaid program had approximately 7.1 million enrollees and Medicaid claim costs totaled about $53 billion. The federal government funded about 52 percent of New York’s Medicaid claim costs; the state funded about 30 percent; and localities funded the rest.

Most of New York’s Medicaid recipients receive their services through mainstream Medicaid managed care. Medicaid pays MCOs a monthly premium payment for each enrolled Medicaid recipient and the MCOs arrange for the recipients’ health services. Mainstream managed care provides hospital care, physician services, dental services, pharmacy benefits, and many others. Of the $53 billion in Medicaid costs, MCOs received $17.8 billion in mainstream managed care premiums for nearly 5.2 million Medicaid enrollees.

DiNapoli’s auditors found that the approximate $19 million in premium overpayments largely occurred because DOH incorrectly factored in the cost of certain taxes – a franchise tax imposed on insurance corporations and the Metropolitan Transportation Business Tax (MTA surcharge) – levied against for-profit MCOs into DOH’s rate-setting calculations. This resulted in higher premiums for all MCOs, including those MCOs that did not pay these taxes. In response to the audit, DOH officials told auditors they updated the methodology.

Auditors also reviewed the expenses submitted by one MCO to DOH and determined the MCO claimed certain non-allowable administrative expenses, which also contributed to the overpayments.

DOH’s cost reporting instructions failed to provide clear and specific instructions for reporting some expenses, such as fines and penalties and certain legal expenses. DOH also provided poor reporting guidance that allowed MCOs to misreport non-allowable marketing expenses, contrary to the intent of a policy change initiated from a Medicaid Redesign Team (MRT) proposal. As a result, DOH is not fully realizing the MRT’s estimated $45 million in annual savings from the change.

DiNapoli’s auditors also found that since October 2009, DOH has contracted with Mercer Health and Benefits, LLC to provide actuarial services and guidance in setting all managed care premium rates. As of January 2015, the total cost of the contract was $38.6 million. Under state law, DOH is required to charge the MCOs for those services, but had not done so.

DiNapoli recommended DOH:

1. Modify the rate-setting methodology to ensure that franchise taxes and MTA surcharges are properly factored into the methodology;

2. Determine the extent to which the MCOs’ reported expenses include non-allowable marketing expenses, and assess whether planned cost savings can be achieved under current MCO reporting practices;

3. Revise the Medicaid Managed Care Operating Report (MMCOR) instructions to ensure adequate guidance is given for reporting marketing and facilitated enrollment expenses, fines, and legal costs;

4. Recalculate the administrative cost cap and the base administrative premium rate based on the audit’s findings and apply the recalculations to the premiums paid for the state fiscal year 2014-15 and forward;

5. Recover overpayments;

6. Assess the cost of the current actuary contract, and any future contracts and amendments, to MCOs; and

7. Include MCOs in the future selection of the actuary.

Department officials generally concurred with some of the audit recommendations, and indicated that actions have been and will be taken to address them. DOH’s full response is included in the complete audit.

The complete report is posted on the Internet at: report

Employee’s misuse of employer’s email results in dismissal

Employee’s misuse of employer’s email results in dismissal
Posted by Employment Law News, WK WorkDay - A service provided by Wolters Kluwer Legal & Regulatory U.S.

[Internet links highlighted in color]

Fire Captain terminated after using Department’s internal email system to transmit religious messages

By Dave Strausfeld, J.D.

A fire department captain who was discharged for sending Christian messages to coworkers via the department’s internal email system was unable to prove that his First Amendment free speech rights were violated, held a Washington Court of Appeals, affirming a lower court’s grant of summary judgment. The email system was a nonpublic forum, and limiting its usage to fire department business was reasonable and viewpoint neutral. Judge Lawrence-Berrey filed a separate concurring opinion.

In dissent, Chief Judge Fearing argued the department had opened the email system to religious messages by forwarding newsletters from its health insurer about solving personal problems and living a healthy lifestyle, because the government may not “prefer secular chatter over religious oration” (Sprague v. Spokane Valley Fire Department).

The text of Mr. Strausfeld summary is posted on the Internet at:

http://www.employmentlawdaily.com/index.php/news/fired-for-using-internal-email-system-to-send-religious-messages-fire-captain-loses-free-speech-claim/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CCH-Workday+%28WK+WorkDay%29

Employee’s termination for sending 900 company emails to personal account did not constitute reverse discrimination

By Kathleen Kapusta, J.D.

Sending over 900 company emails to his personal or other outside account, including over 100 containing confidential client information, was a legitimate nondiscriminatory reason for firing a 59-year-old employee, notwithstanding that he was allowed to work at home on the company’s secure network and that an NLRB law judge found some of the employer’s confidentiality rules overbroad.

Accordingly a federal district court in Michigan granted summary judgment against his federal and state law reverse race and gender discrimination claims as well as his age bias claim under the ADEA. His FLSA claim for unpaid overtime also failed (MacEachern v. Quicken Loans, Inc., September 21, 2016, Steeh, G.).

The text of Ms. Kapusta’s summary is posted on the Internet at:

http://www.employmentlawdaily.com/index.php/news/employee-fired-for-sending-over-900-emails-to-personal-account-not-for-reverse-discrimination/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CCH-Workday+%28WK+WorkDay%29

N.B. No part of the above materials may be copied, photocopied, reproduced, translated, reduced to any electronic medium or machine-readable form, or retransmitted, in whole or in part, without the prior written consent of WK. Any other reproduction in any form without the prior written consent of WK is prohibited. Written consent may be obtained from WK. Please click here for more information.

Other decisions addressing an employee’s alleged misuse of an employer’s electronic equipment include:

Fraser v Nationwide Mutual Insurance Co.

USDC, 135 F. Supp. 2d 623

The court held that an employee using his or her employer's computer equipment for personal business does not enjoy any "right to privacy" barring the employer’s reviewing the employee's e-mail that is stored in its computer system. Federal District Court Judge Anita B. Brody decided that an employer may peruse an employee's e-mail files that are stored in the system without violating either federal or Pennsylvania wiretap laws.

On appeal the USCA, Third Circuit, affirmed the District Court's grant of summary judgment in favor of Nationwide on Fraser's wrongful termination claim but vacated and remand the state claims, and his bad-faith claim and forfeiture-for-competition claim for consideration in light of the Pennsylvania Supreme Court's decision in Hess v. Gebhard and Co., Inc., 570 Pa. 148.

Leo Gustafson v Town of N. Castle, 

45 A.D.3d 766

The employee, an assistant building inspector with the Town of North Castle, was charged and found guilty of falsifying official records with respect to where he was while on duty. The individual was assigned a town vehicle for the purpose of making field inspections in connection with his employment. The vehicle had a global positioning system installed that transmitted information to the town’s computer reporting the vehicle’s location and movements. Based on this information, the Town charged the employee with falsifying town records as to his whereabouts. This, said the Appellate Division, constituted substantial evidence to support the determination that the employee was guilty of falsifying town records.

Ghita v Department of Education of the City of New York

2008 NY Slip Op 30706(U), Supreme Court, New York County, Docket Number: 0110481/2007 [Not selected for publications in the Official Reports]

The employee challenged an arbitrator’s determination terminating his employment with the New York City Department of Education after finding him guilty of downloading a file of pornographic material from his AOL email account and openly viewed such pornographic material from a school computer. Supreme Court rejected the individual’s claim that [1] the arbitrator exceeded his authority under Education Law §3020-a, and [2] the award terminating Ghita's employment is a violation of public policy and New York State Law.

Perry v Comm. of Labor,

App. Div. 3rd Dept., 283 A.D.2d 754

This unemployment insurance claimant challenged a determination by the Unemployment Insurance Appeals Board denying him benefits after finding that his employment was terminated due to his misconduct. The nature of the individual's alleged misconduct: his misuse of his employer's computer equipment. The employee, a human resource specialist, was terminated after his employer discovered that he used his computer terminal to frequently access pornographic websites during working hours.

Fraser v Nationwide Mutual Insurance Co.

USDC, 135 F. Supp. 2d 623

The court held that an employee using his or her employer's computer equipment for personal business does not enjoy any "right to privacy" barring the employer’s reviewing the employee's e-mail that is stored in its computer system. Federal District Court Judge Anita B. Brody decided that an employer may peruse an employee's e-mail files that are stored in the system without violating either federal or Pennsylvania wiretap laws.

As to the issue of the expectation of privacy, the appointing authority may wish to periodically advise its officers and employees that they have no right to privacy with respect to any data retrieved from the employer's computers, servers, video tapes, message tapes or other storage devices, electronic or otherwise.

The full text of the Wilkinson - Casey decision is posted on the Internet at:
http://nypublicpersonnellawarchives.blogspot.com/2008/06/searching-employers-computer-for.html

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A Reasonable Penalty Under The Circumstances - a 618-page volume focusing on New York State court and administrative decisions addressing an appropriate disciplinary penalty to be imposed on an employee in the public service found guilty of misconduct or incompetence. For more information click on http://booklocker.com/7401.html

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States and political subdivisions of states adopting “Ban the Box” laws prohibiting employers from inquiring into the criminal history of applicants on initial employment applications

States and political subdivisions of states adopting “Ban the Box” laws prohibiting employers from inquiring into the criminal history of applicants on initial employment applications

So-called “Ban the Box” legislation is being enacted by many public jurisdictions to eliminate the possibility of job candidates being disqualified from further consideration based on a criminal history that has been revealed in his or her initial application form.  Instead, legislation is being adopted to require that employers, public and private alike, consider the applicant’s qualifications for the position first and than subsequently make individualized inquiries into any criminal conviction and determine whether any such conviction relevant in making a decision with respect to the individual’s being selected for the job sought or to public safety.*

New York State Attorney General Schneiderman has stated that his office is committed to breaking down barriers that impede rehabilitation, especially those that prevent fair access to employment,” noting that several municipalities across New York State have enacted “Ban the Box” legislation. 

Although there is no statewide "ban the box" law in New York currently in effect,**  Article 23-A of New York State’s Correction Law mandates that both public and private employers be mindful of a number of specific factors when considering criminal history information during the hiring process in making an employment decision. 

The text of Article 23-A is posted on the Internet at:

http://www.labor.ny.gov/formsdocs/wp/correction-law-article-23a.pdf.

Consistent with Article 23-A, an employer may not deny employment because of an individual’s criminal history unless [1] it can draw a direct relationship between the applicant’s criminal record and the prospective job or [2] show that employing the applicant “would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.”

In the event the employer determines that such a direct relationship exists, an employer must evaluate the several Article 23-A factors listed below to determine whether the concerns presented by the relationship have been mitigated. If the potential employer determines that the concerns presented by the relationship have not been mitigated, it must then demonstrate how the factors combine to create an unreasonable risk.

The Buffalo “Ban the Box” Ordinance is posted on the Internet at:

http://www.hireimage.com/_resources/common/userfiles/file/Ban%20the%20Box%20Law%20Files/Buffalo%20Ban%20the%20Box.pdf

New York City’s Local Law to “Ban the Box” is posted on the Internet at:

http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1739365&GUID=EF70B69C-074A-4B8E-9D36-187C76BB1098

The Rochester “Ban the Box” Ordinance is posted on the Internet at:

http://www.hireimage.com/_resources/common/userfiles/file/Ban%20the%20Box%20Law%20Files/Rochester%20BTB.pdf

* The New York State Department of Civil Service’s examination application form NYS APP (6-16) includes the following statement and questions:

Certain job titles, including many law enforcement positions (such as Correction Officer, Parole Officer, and Park Patrol Officer) and direct patient care positions (such as Mental Health Therapy Aide and Secure Care Treatment Aide), are also subject to agency criminal history background investigations, as required by law. Applicants should read the official examination announcement for more specific information.

If you answer YES to any of these questions, please provide a detailed explanation in the REMARKS section provided below, including employer information, position, reasons and dates:

1. Yes [ ]  No [ ] Were you ever discharged from any employment except for lack of work, funds, disability or medical condition?

2. Yes [ ]  No [ ] Did you ever resign from any employment rather than face a dismissal?

3. Yes [ ]  No [ ] Did you ever receive a discharge from the Armed Forces of the United States which was not an “Honorable Discharge” or a “General Discharge under Honorable Conditions”?

REMARKS:

** The Article 23-A factors to be considered are:

1. That New York public policy encourages the licensure and employment of people with criminal records;

2. The specific duties and responsibilities of the prospective job;

3. The bearing, if any, of the person’s conviction history on her or his fitness or ability to perform one or more of the job’s duties or responsibilities;

4. The time that has elapsed since the occurrence of the events that led to the applicant’s criminal conviction, not the time since arrest or conviction;

5. The age of the applicant when the events that led to her or his conviction occurred, not the time since arrest or conviction;

6. The seriousness of the applicant’s conviction history; and

7. Any information produced by the applicant, or produced on the applicant’s behalf, regarding her or his rehabilitation or good conduct.

Disciplinary charges must be served on the target of the disciplinary action on or before the expiration of the period set by the controlling statute of limitations

Disciplinary charges must be served on the target of the disciplinary action on or before the expiration of the period set by the controlling statute of limitations

Lebron v Village of Spring Valley, 2016 NY Slip Op 06500, Appellate Division, Second Department

Following a disciplinary hearing, the hearing officer found David Lebron, a Village of Spring Valley police officer, guilty of certain charges of misconduct. The hearing officer than recommend that Lebron be terminated from his position with the Spring Valley Police Department. The Spring Valley Village Board of Trustees adopted the recommendation of the hearing officer and dismissed Lebron from his position.

Lebron file a petition pursuant to CPLR Article 78 challenging his termination, contending, among other things, that:

The Board's determination was not supported by substantial evidence.

Addressing the issue of the alleged lack of “substantial evidence,” the Appellate Division simply noted that the in brief submitted to the court Lebron “did not contend that the Board's determination was not supported by substantial evidence.”

The charges served against him were time-barred because they were served more than 60 days after the Department's Chief of Police became aware of the facts upon which the charges were based.

As to the question of the charges being timely served, the Appellate Division explained that the applicable statute of limitations are set out in The Rockland County Police Act, §7 of Chapter 526 of the Law of 1936. This section provides that the disciplinary charges must be served on the target of the disciplinary action within 60 days after the facts upon which the charges are based became known to the Village Board of Trustees. Here, said the court, there was no dispute that the charges were served upon Lebron within 60 days after the facts upon which the charges were based became known to the Board.

Accordingly, the court found that the disciplinary charges served on Lebron were not time-barred.

Lebron also argued that he had suffered “added stigma” as the result of the “circumstances of the disciplinary procedure.”  The Appellate Division, however, decided that this contention was without merit. In the words of the Appellate Division, “[n]othing in the record suggests that, as a result of the termination of his employment as a police officer with the Department, [Lebron] is prohibited from obtaining future law enforcement employment, or that he is subjected to a public registry of any sort.”

Lebron also contended that his due process rights were violated by the hearing officer's declining to reopen the disciplinary hearing to consider “newly discovered evidence.

Citing Russell v Del Castillo, 181 AD2d 680, the Appellate Division concluded that “the hearing officer providently exercised his discretion in denying [Lebron’s] application to reopen the hearing on the basis of newly discovered evidence."

The Russell decision is posted on the Internet at:

http://www.legal.com/decision/1992861181AD2d680_1486/MATTER%20OF%20RUSSELL%V%20DEL%20CASTILLO

The Lebron decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06500.htm

Evidence that the firefighter suffered disease or malfunction of the heart as the result of his or her duties and activities required to trigger the statutory presumption set out in the Volunteer Firefighters' Benefit Law

Evidence that the firefighter suffered disease or malfunction of the heart as the result of his or her duties and activities required to trigger the statutory presumption set out in the Volunteer Firefighters' Benefit Law

Huffer v Nesconset Fire Dist., 2016 NY Slip Op 06535, Appellate Division, Third Department

§61.1 of the  Volunteer Firefighters' Benefit Law provides that "[a] claim for benefits for the death or disability of a volunteer [firefighter] due to disease or malfunction of the heart or of one or more coronary arteries . . . shall not be denied provided the claimant introduces evidence which establishes that a volunteer [firefighter] suffered disease or malfunction of the heart or of one or more coronary arteries which caused the disablement or death of the volunteer [firefighter], and that such disease or malfunction resulted from the duties and activities in which the volunteer [firefighter] was engaged."*

Appeal from a decision of the Workers' Compensation Board, filed October 23, 2015, which ruled that decedent's death was not causally related to his employment and denied claimant's claim for workers' compensation death benefits.

Ross Huffer, [Huffer] served as a volunteer firefighter with the Nesconset Fire District and worked as a first responder on Wednesdays and Thursdays. On Wednesday, February 26, 2014, Hufferresponded to two calls during the day and also attended drill that evening at the firehouse. Huffer then returned home, went to bed and died in his sleep early the next morning of hypertensive and atherosclerotic heart disease.

Huffer’ widow, Kathleen Ross [Claimant], filed a claim for workers' compensation death benefits. Following a hearing, the Workers' Compensation Law Judge denied her claim, finding that there was insufficient evidence as to the nature and extent of  Huffers’ activities on February 26, 2014 to find that his death was related to his volunteer firefighter duties. The Workers' Compensation Board affirmed the decision of the Workers' Compensation Law Judge and Claimant appealed.

The Appellate Division, citing the provisions of §61.1 Volunteer Firefighters' Benefit Law, affirmed the Board’s determination, explaining that neither Claimant’s testimony nor the testimony of doctors established the duties and activities that  Huffer undertook during the two emergency calls or at drill on the day before he died.**

Claimant testified that she was unaware of the specific nature of the calls to which Huffer responded or the nature of the drill. In addition, said the court, “the record establishes that the opinion of Lester Ploss, a physician who reviewed [Huffer's] medical records and opined that [Ross’] firematic duties contributed to his death, was based upon a lack of information, as well as certain assumptions made by Ploss regarding the specific activities that [Huffer] engaged in at the emergency calls and at the drill.

Considering the lack of evidence regarding the duties and activities in which  Hufferhad been engaged, the Appellate Division held that the requirements for the applicability of “the statutory presumption under Volunteer Firefighters' Benefit Law [§61.1] was not met.”

Accordingly, the court ruled that “the Board's decision denying [Claimant’s] death benefit claim will not be disturbed.”

* N.B.As currently enacted §61 of the Volunteer Firefighters' Benefit Law is “repealed effective July 1, 2020.”

** The Appellate Division noted that “No testimony or evidence was provided concerning Ross’ “responding to two calls during the day and also attending drill that evening] by any fire department officials”

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06535.htm

Affordable Care Act Outreach for State and Local Governmental Employer Community

Affordable Care Act Outreach for State and Local Governmental Employer Community 

Source: The Internal Revenue Service

REMINDER

The Affordable Care Act [ACA] Office and the Tax Exempt and Government Entities [TE/GE] Counsel will present a live webinar to address governmental entities' concerns and needs as they relate to ACA information reporting requirements on Thursday, October 20, 2016 at 2 p.m. [Eastern time].

Topics to be addressed include:

Determining Applicable Large Employer (ALE) status

Identifying full-time employees

Defining hours of service

What is Minimum Essential Coverage?

E-Filing of information returns

2016 filing season corrections and replacements

Penalties and relief

TIN solicitation

Changes to forms and instructions for Tax Year 2016

Click here to Register for this event.

N.B. IRS is not offering participants Continuing Education Credit for this event.

From the Law Blogs

From the Law Blogs - week ending October 8, 2016

[Internet links highlighted in color]

Posted by NYMUNIBLOG

NYMUNIBLOG has posted a draft revision of learning standards issued by the New York State Department of Education to replace "Common Core."

Posted on the Internet at:
http://www.nymuniblog.com/whats-name-nysed-releases-draft-revision-learning-standards-replace-common-core/

Posted in Wolters Kluwer's WorkDayhttp://www.employmentlawdaily.com/ 

Supervisor’s bias against Hispanic or overweight employees supports non-selection claim

By Kathleen Kapusta, J.D.

Although a close call, a federal court in the District of Columbia found that an Hispanic employee who described herself as having “a body size which may be perceived by some as being overweight” established a fact issue as to whether Fannie Mae’s rationale for passing her over for a VP position in favor of a slender Caucasian woman was pretextual. One view of the evidence, said the court, was that the senior VP who drove the hiring process harbored biases toward Hispanic and overweight employees and selected the successful candidate not because she was more qualified but because she fit the demographic and personal appearance mold. Accordingly, the court denied summary judgment against the employee’s non-selection claims alleging racial discrimination under Section 1981 and racial and personal appearance discrimination under the D.C. Human Rights Act (Lapera v. Federal National Mortgage Association dba Fannie Mae).

The full text of Ms. Kapusta’s article is posted on the Internet at:

http://www.employmentlawdaily.com/index.php/news/supervisors-bias-against-hispanic-or-overweight-employees-supports-non-selection-claim/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CCH-Workday+%28WK+WorkDay%29

Other issues considered in WorkDay:

Report on advancing diversity in law enforcement released

Communications between union member and union representatives not privileged in civil lawsuit

Two-day delay in reporting sexual harassment dooms Title VII retaliation claim

 

Handwritten agreement to resign during mediation of administrative race bias charges was valid, uncoerced

N.B. No part of the above materials may be copied, photocopied, reproduced, translated, reduced to any electronic medium or machine-readable form, or retransmitted, in whole or in part, without the prior written consent of WK. Any other reproduction in any form without the prior written consent of WK is prohibited. Written consent may be obtained from WK. Please click here for more information.

Selected reports issued by the New York State Comptroller during the week ending October 5, 2016

Selected reports issued by the New York State Comptroller during the week ending October 5, 2016: Completed audits of State Departments and Agencies; Municipalities and School Districts and BOCES

Source: Office of the State Comptroller

[Internet links highlighted in color]

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued and the full text of each are posted on the Internet:

State Departments and Agencies

State Education Department (SED): Selected Aspects of the Migrant Education Program (Follow-Up) (2016-F-9)
An audit report issued in May 2015 determined that the Migrant Education Program did not meet certain program outcomes and overarching program goals. SED did not complete federally required documents in a timely manner; and a significant portion of the Migrant Education Tutorial Services faced challenges obtaining migrant student performance data. In a follow-up report, auditors found SED has made significant progress in correcting the problems identified in the initial report. Several of the strategies the program plans to implement are scheduled to begin with the 2016-2017 school year. 

State Education Department: Kidz Therapy Services, PLLC, Compliance with the Reimbursable Cost Manual (2015-S-63)
For the three fiscal years ended June 30, 2014, auditors identified $249,850 in reported costs that did not comply with the state requirements for reimbursement and recommend such costs be disallowed. These ineligible costs included $240,553 in personal service costs and $9,297 in other than personal service costs.

Department of Health (DOH): Improper Fee-for-Service Payments for Pharmacy Services Covered by Managed Care (Follow-Up) (2016-F-5)
An audit issued in January 2015 determined that, for the 27-month period of Oct. 1, 2011 through Dec. 31, 2013, Medicaid inappropriately paid 29,289 fee-for-services pharmacy claims totaling $978,251 on behalf of 18,010 Medicaid recipients whose pharmacy benefits were covered by managed care. In a follow-up report, auditors determined DOH has made some progress in addressing the problems identified in the initial audit report. However, further actions are still needed.

Department of Health: Improper Payments for Controlled Substances That Exceed Allowed Dispensing Limits (Follow-Up) (2016-F-6)
An audit report issued in February 2015, determined that, for the period Jan. 1, 2009 through Dec. 31, 2013, Medicaid overpaid pharmacies $1,183,601 for 13,705 fee-for-service claims in which quantities of controlled substances exceeded the supply limits allowed. Auditors further identified 3,323 managed care claims for controlled substances in which the quantities dispensed exceeded the limits set by law. In a follow-up report, auditors found DOH has made progress in addressing the problems identified in the initial audit report. This included implementing controls to prevent the payment of pharmacy claims for quantities of controlled substances that exceeded supply limits. These actions resulted in the denial of approximately $3.3 million in claims through July 2016.

Department of Labor (DOL): Examination of Unemployment Insurance (UI) Benefits 2015 Year End Report (2016-BSE4-01)
Auditors identified 11,306 UI overpayments totaling more than $3.6 million. This includes $93,760 in current payment requests stopped, $280,276 in future payments that would have been made over the life of the claim and $3,311,848 in erroneous payments made. Based on the errors identified, DOL assessed $471,458 in monetary penalties to 344 claimants. Auditors also identified 588 underpayments totaling $105,744. DOL has recovered $253,968 in forfeited UI benefits from claimants who made false statements or representations to obtain benefits they were not eligible to receive and $488,138 from New York state employees who owed DOL for UI overpayments made in prior years.

Municipalities

Altona Volunteer Fire Company, Inc. – Financial Operations (Clinton County)
Company officials did not establish adequate controls or provide sufficient oversight of financial activities. Consequently, the company’s accounting records were not properly maintained, bank reconciliations were not prepared and crucial financial reports were inaccurate or not prepared and submitted to company officials or to the comptroller’s office.

City of Gloversville – Parking Violation Operations (Fulton County)
City officials have not established sufficient procedures for pursuing the collection of unpaid parking violations or set a benchmark for collection rates. The city collected $110,000 in revenues for 4,367 violations from January 2011 through April 2016, which represents 61 percent of total parking violations. The city could have collected an additional 1,757 parking violations totaling approximately $44,000 if it collected fines for 85 percent of the parking violation tickets issued. If the city collects the additional 24 percent of parking violations that are still outstanding, dating back to January 2011, the city could receive approximately $83,000 in additional revenue.

City of Jamestown – Financial Condition (Chautauqua County)
The city incurred operating deficits in fiscal years 2012 through 2015 totaling $2.8 million. As a result, general fund balance decreased by approximately 58 percent, from $4.8 million to $2 million. The city’s financial condition will continue to decline during 2016 because the adopted budget is again not structurally balanced. The city will likely incur an operating deficit of at least $400,000 unless significant and immediate spending changes are implemented.

Town of Warwarsing – Napanoch Water District Rents and Assessments (Ulster County)
The board needs to improve its internal controls over water rents to ensure that they are accurately billed and collected and assessments are properly levied. Auditors found that internal controls over water rents and assessments were inadequate and oversight is lacking. Because town officials were uncertain of district boundaries, assessments were not levied on all properties in the district. As a result, assessments charged to district property owners were higher than necessary.

School Districts and BOCES

Frankfort-Schuyler Central School District – Financial Management (Herkimer County)
District officials did not adopt budgets based on historical or known trends but instead overestimated expenditures by almost $2.7 million from 2011-12 through 2014-15. The district appropriated $2.4 million in fund balance as a financing source in the annual budgets for 2012-13 through 2015-16. However, the district’s budgeting practices resulted in operating surpluses in three of these years and will also likely end 2015-16 with an operating surplus. As a result, none of the appropriated fund balance will be needed to finance operations. The district also retained an average of approximately $342,000 of unrestricted funds in the debt service fund, $1.1 million in the agency fund’s group health insurance account and $429,000 in excessive reserves over these years. When adding back unused appropriated fund balance, excess money retained in the debt service, agency funds and reserves, the district’s recalculated unrestricted fund balance exceeded the statutory limit, averaging more than 18 percent of the ensuing year’s appropriations, or more than four times the statutory limit.

Hammondsport Central School District – Nonresident Tuition (Steuben County)
District officials should improve their billing process for nonresident students by determining actual attendance dates. Auditors reviewed 10 tuition invoices for seven nonresident students placed at the district totaling $219,941 from the 2012-13 through 2014-15 years. While district officials effectively identified nonresident students who were placed at the district, the treasurer ,a href="used incorrect attendance dates when calculating bills for three students. As a result, two home districts were underbilled by $5,078 and one home district was overbilled by $638.

Putnam Northern Westchester Board of Cooperative Educational Services (BOCES) – Information Technology and Claims Auditing (2016M-205)
BOCES officials need to improve controls to adequately secure and protect IT systems. The rooms housing the servers and IT infrastructure did not have safeguards to track access and protect IT assets, and BOCES officials have not developed a disaster recovery plan to guide action in the event of a disaster. Additionally, the board appointed a claims auditor but needs to improve its oversight of the claims auditing function. There was no evidence that 33 claims totaling $100,873 were checked to ensure they did not exceed their related purchase orders or that 13 claims totaling $42,526 agreed with approval contracts or agreements.

Raquette Lake Union Free School District – Monitoring Financial Condition (Hamilton County)
The board did not ensure that adequate accounting records and reports were maintained and did not effectively monitor the district’s financial operations. The clerk did not maintain accurate and complete accounting records and the treasurer did not provide the board with adequate periodic reports. Furthermore, auditors recalculated the district’s assets, liabilities and fund balance and found unrestricted fund balance deficits for the 2013-14 and 2014-15 fiscal years and budgetary deficits for the 2013-14, 2014-15 and 2015-16 fiscal years. Additionally, the district incurred a cash flow shortage that precluded employees from cashing their paychecks from July 2013 to September 2013.

Western Suffolk Board of Cooperative Educational Services – Budget Transfers and Confirming Purchase Orders (2016M-218)
The board did not always enforce its policies and procedures. Auditors reviewed 30 budget transfers totaling $9.2 million and found that 24 totaling $7.8 million were not presented to the board for approval. The board approved the remaining six budget transfers totaling $1.4 million between 18 and 70 days after the transfer was processed. The board’s ability to monitor the budget and ensure that account codes are not overspent is compromised when it does not approve budget transfers.

An employer is not liable for an employee's discriminatory acts targeting a co-worker unless the employer encouraged, condoned or approved such misconduct

An employer is not liable for an employee's discriminatory acts targeting a co-worker unless the employer encouraged, condoned or approved such misconduct

Figueroa v New York State Div. of Human Rights and Buffalo City School Dist., 2016 NY Slip Op 06319, Appellate Division, Fourth Department

Schwallie v New York State Div. of Human Rights and Buffalo City School Dist., 2016 NY Slip Op 06322, Appellate Division, Fourth Department
 

At the time of the alleged unlawful acts of employment discrimination both Rachel Figueroa and Ashleigh Schwallie were employed by the Buffalo City School District [District] and both worked at the same school.

They both alleged that they had been victims sexual harassment by a coworker. They subsequently filed separate complaints against the District alleging sexual harassment and retaliation with the New York State Division of Human Rights [Division]. The Division dismissed their respective complaints.

Then both Figueroa and Schwallie commenced separate proceedings pursuant to Executive Law §298* seeking court orders annulling the relevant decisions of the Division dismissing their complaints of sexual harassment and retaliation. The Appellate Division dismissed both appeals “on the merits.”

The court said it agreed with the District that substantial evidence supported the determinations of the Division that the District was not liable for the coworker's discriminatory conduct. The Appellate Division explained that "[u]nder [New York State’s] Human Rights Law, an employer cannot be held liable for an employee's discriminatory act[s] unless the employer became a party to [them] by encouraging, condoning, or approving [them]."

Neither Figueroa nor Schwallie had established that the District became a party to the alleged sexual harassment by a co-worker. Indeed, said the court, “the record establishes that [the District] reasonably investigated complaints of discriminatory conduct and took corrective action.”

The Appellate Division also found that substantial evidence supported the Division’s determinations that neither Figueroa nor Schwallie were subjected to retaliation by the District for complaining about alleged acts of unlawful discrimination by the co-worker. While both had established  prima facie cases of retaliation, the court found that the District "came forward with legitimate, independent, and nondiscriminatory reasons to support its employment decision[s]" and neither Figueroa not Schwallie had shown that that those reasons were pretextual,

With respect to alleged acts of alleged retaliation for filing a human rights complaint, where the employer has presented a lawful reason or explanation to rebut a charging party's prima facie evidence of retaliation, the burden shifts to the charging party to present facts to rebut each reason or explanation advanced by the employer in it defense against the charge of retaliation.

The Appellate Division unanimously confirmed the Division’s decisions and dismissed both petitions.

* §298 of the Executive Law provides for judicial review and enforcement of determinations by the New York State Division of Human Rights and provides, in pertinent part that “Any complainant, respondent or other person aggrieved by an order of the commissioner which is an order after public hearing … dismissing a complaint, … may obtain judicial review thereof ….”

The Figueroa decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06319.htm.

The Schwallie decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06322.htm.

Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit

Reducing health insurance prescription co-pay benefits for an employer’s retirees to the same level as the employer’s active employees' prescription co-pay benefit

Altic v Board of Educ., 2016 NY Slip Op 06315, Appellate Division, Fourth Department

As relevant to this action, §14 of Part B of Chapter 504 of the Laws of 2009  amended Chapter 729 of the Laws of 1994 and made permanent temporary legislation prohibiting a school district, a BOCES, or a vocational education and extension board providing health insurance benefits and employer contributions on behalf  retirees and their dependents that were less than the health insurance benefits and employer contributions it provide on behalf a corresponding group of active employees.*

In this action there was no question that the prescription co-pay benefits for retirees and active employees were identical from June 30, 1994, the effective date of this so-called Moratorium Statute through June 30, 2007. Effective July 1, 2007, pursuant to a collective bargaining agreement [CBA], the prescription co-pay benefit for active employees was reduced. The prescription co-pay benefit for active employees was again reduced pursuant to the terms and conditions of a subsequent CBA, effective September 1, 2013. 

Accordingly, Onondaga-Cortland-Madison Board of Cooperative Educational Services [OCM] reduced its prescription co-pay benefits for its active employees’ as the result of collective bargaining effective September 1, 2013. OCM subsequently reduced its prescription co-pay benefits for its retirees to the same level it paid on behalf of the active employees' for the prescription co-pay benefit effective April 1, 2014.

Nancy Altic, on behalf of herself and other OCM retirees, filed an Article 78 petition challenging OCM’s reduction of its prescription co-payment benefits it made on behalf of its retirees. Supreme Court granted Altic’s petition and annulled OCM’s decision to reduce the OCM’s prescription co-pay benefit for its retired employees to the then same level of its prescription co-pay benefit it made on behalf of its active employees as set out in the collective bargaining agreement. Supreme Court held that OCM had violated certain provisions of Chapter 504 of the Laws of 200.

OCM appealed and the Appellate Division unanimously reversed the Supreme Court’s ruling “on the law” and dismissed Altic’s petition.

The Appellate Division explained that the Moratorium Statute, first enacted in 1994 "sets a minimum baseline or floor for retiree health insurance benefits.” That floor was measured by the health insurance benefits received by active employees.” In other words, said the court, the Moratorium Statute “does not permit an employer to whom the statute applies to provide retirees with lesser health insurance benefits than active employees."

In view of this, the Appellate Division concluded that, “inasmuch as there was a corresponding diminution of  [prescription co-pay] benefits . . . effected [with respect to retired employees] . . . from the present level  … on or after June 30, 1994” to the level of the prescription co-pay benefits being made on behalf of active OCM employees, OCM did not violate the Moratorium Statute.

* §14 of Part B of Chapter 504 of the Laws of 2009 amended §1 of Chapter 729 of the laws of 1994, making permanent temporary legislation addressing the health insurance benefits and contributions to be made on behalf of retired employees of school districts, BOCES and certain other educational entities, to read as follows: “Section 1. From on and after June 30, 1994 [until May 15, 2010,]a school district, board of cooperative educational services, vocational education and extension board or a school district as enumerated in section 1 of chapter 566 of the laws of 1967, as amended, shall be prohibited from diminishing the health insurance benefits provided to retirees and their dependents or the contributions such board or district makes for such health insurance coverage below the level of such benefits or contributions made on behalf of such retirees and their dependents by such district or board unless a corresponding diminution of benefits or contributions is effected from the present level during this period by such district or board from the corresponding group of active employees for such retirees.” 

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2016/2016_06315.htm

AELE posts items of special interest to those involved in public safety, law enforcement and firefighting on its LawBlog

Americans for Effective Law Enforcement, Inc. posts items of special interest to those involved in public safety, law enforcement and firefighting on its LawBlog

  [Internet links highlighted in color]

Americans for Effective Law Enforcement, Inc. [AELE] offers free access to certain publications. In addition, it has a searchable library of more than 35,000 case digests organized into 700 + indexed topics. Users do not have to preregister and there is no time limit on research sessions. Except for commercial purposes the contents of its online law library may be copied and pasted, saved or printed.

AELE’s current issues of its three publications, back issues since 2000, case digests since 1975, and a search engine are accessible through the Internet and AELE invites everyone to read, print or download AELE publications without charge. The main menu is at: http://www.aele.org/law

Some of the items listed on AELE’s October 2016 LawBlog are: 

AELE Monthly Law Journal article - Overtime Pay Entitlement for Public Safety Employees Under the Fair Labor Standards Act (FLSA) – Part 2.View here.

Law Enforcement Liability Reporter - This issue has cases on assault and battery: flashbangs, dogs, false arrest/imprisonment with and without warrants, firearms related: Second Amendment, public protection: 911 systems, and search and seizure of persons and vehicles. View here.  

Fire, Police & Corrections Personnel Reporter - This issue has cases on First Amendment, Fair Labor Standards Act: donning and doffing uniforms and equipment, pay disputes, political activity/patronage employment, race/national origin discrimination, retaliatory personnel actions, sex discrimination, sexual harassment, and whistleblower protection. View here.

Jail and Prisoner Law Bulletin - This issue has cases on disability discrimination: prisoners, medical care, dental care, the "three strikes" rule of the Prison Litigation Reform Act, prisoner assault by inmates, prisoner discipline, religion, search of prisoners, and sexual assault. View here.

Discipline and Internal Investigations Seminar - AELE's 2016 seminar on Discipline and Internal Investigations for public safety agencies -police, corrections and the fire services - will be held in Las Vegas on October 24-26. This is a comprehensive 2 and a half day program will address all major aspects of discipline. The program covers both substantive and procedural issues as well as rules and regulations. The program includes the latest hot topics such as cell phones, social media, and constitutional issues. More information is available at http://www.aele.org/menu-disc.html

AELE’s annual seminar on Jail and Prisoner Legal Issues will be held in Las Vegas on January 9-12, 2017. More info at http://www.aele.org/menu-jail.html