Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending July 14, 2017

Selected reports and information published by New York State's Comptroller Thomas P. DiNapoli during the week ending July 14, 2017

Click on text highlighted in color  to access the full report

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports have been issued:

DiNapoli report highlights local government reliance on federal aid

On July 14, 2017, State Comptroller Thomas P. DiNapoli issued a report  detailing the impact of federal aid on New York’s municipalities and school districts. In 2015, local governments and school districts outside New York City received $4.7 billion in direct federal aid. Separately, New York City received $7 billion, of which $1.7 billion went to funding the city’s public schools. “Local governments receive much-needed federal aid that supports our schools, fixes our roads and keeps our communities safe,” said DiNapoli. “But potential policy changes in Washington could have a considerable impact on local government operations. In today’s political climate, it’s important for New Yorkers to get a sense of how much funding is at stake and what programs might be at risk.”

How heavily local governments rely on federal aid as part of their individual revenue mix varies by class.  In 2015, federal aid as a share of total revenue was the highest for counties (11.2 percent), followed by New York City (10.1 percent), New York City schools (6.5 percent), other cities in the state (5.7 percent), other school districts (4.1 percent), villages (2.9 percent) and towns (2.7 percent). Reliance on federal aid can also vary widely within these classes of government. Specific data on each county, city, town, village and school district for 2015 is available through a new, interactive feature on DiNapoli’s website.

Generally, the type of federal aid New York’s local governments received in 2015 supported a broad range of purposes, which includes social services, education, transportation, public safety, economic development, health, community services, culture and recreation, utilities and sanitation.

To read DiNapoli’s report “The Impact of Federal Aid on New York’s Local Governments,” go to:

 http://www.osc.state.ny.us/localgov/pubs/research/federal-aid-impact.pdf

To view the interactive data, go to: http://wwe1.osc.state.ny.us/localgov/fedaid/fedaid.cfm 


State audits and examinations issued:

Department of Health (DOH): Medicaid Program: Medicaid Payments for Pharmacy Claims - Joia Pharmacy and a Related Prescriber (2013-S-4)

Based on a statistical projection, auditors determined DOH overpaid Joia $1,485,121 for improper pharmacy claims. Disallowances included: claims billed for excess quantities of drugs; claims for drugs in which the prescriptions were missing or invalid; and claims for unauthorized and inappropriate refills. The audit also identified a range of practices by both Joia and a doctor that warrant further review. The doctor was listed as the prescriber on 63 percent of Joia’s claims; among these claims, auditors found high volumes of prescriptions for individual patients on single days, and instances of drug conflicts and prescriptions that exceeded utilization.

Department of Health (DOH): Inappropriate Payments for Recipients not Enrolled in Medicaid Mainstream Managed Care or Family Health Plus (2015-S-47)  
For the period Oct. 1, 2010 through Dec. 31, 2014, DOH made 190,686 improper or questionable premium payments, totaling about $72.6 million, on behalf of 105,358 recipients who were subsequently disenrolled retroactively from managed care plans and who did not receive medical services during the disenrollment periods. This included more than $10.5 million related to 7,415 deceased recipients. During the six-month period after auditors provided the claim details to DOH, 14,209 claims totaling more than $7.4 million in improper premium payments had been voided, leaving 176,477 premium payments totaling about $65.2 million that still needed to be reviewed and, if warranted, recovered.

New York State Health Insurance Program: Empire BlueCross BlueShield (Empire): Controls over Payments for Special Items (2016-S-67)
In response to prior audits, Empire improved its controls over the identification and recovery of overpayments for special items. As a result of Empire’s efforts, including contracts with two vendors, Empire recovered overpayments totaling $6,313,534 for special items. Nonetheless, auditors concluded that Empire needs to further enhance its reviews of special item payments by incorporating steps and techniques that result in additional recoveries.

New York State Liquor Authority (SLA): Statewide Compliance with Administrative Requirements for Retail Liquor License Approvals, Renewals, and Enforcement Actions (2016-S-32)
On a statewide basis, SLA generally approved new liquor licenses and license renewals consistent with state law and its prescribed administrative protocols. SLA adequately ensured that license applicants and parties seeking renewals complied with the prescribed documentation requirements. For the new license applications selected for review, SLA had 99 percent of the required documentation on file. SLA also complied with its administrative requirements pertaining to license revocations, cancellations, and suspensions.

Department of Health, Office of Parks, Recreation and Historic Preservation - Department of Environmental Conservation Oversight of Health and Safety Regulations at Public Pools, Beaches, and Spray Grounds (2016-S-55)
All three agencies have appropriate controls in place and are providing adequate oversight to ensure that public pools, beaches, and spray grounds under their jurisdiction are safe for public use. Each agency has developed procedures to address health and safety issues at each of the facilities it operates or oversees.

New York City Department of Finance: Selected Controls over Property Tax Assessments (2015-N-1)
Auditors reviewed 508 parcels valued during fiscal year 2014 to fiscal year 2016 and found the agency  did not conduct necessary inspections for 276 (54 percent) of them. Without the required inspections, DOF cannot be certain such changes are adequately considered when valuing a property.

Office of Temporary and Disability Assistance (OTDA):  Electronic Benefit Transfer Card Transactions and Prohibited Locations(2016-S-52)
OTDA has adopted appropriate policies and practices to avoid the risk of federal financial penalties. In addition, auditors found the office’s monitoring of EBT transactions to generally be adequate, but identified certain strategic refinements that could help the office to better monitor transactions and identify violations. Auditors analyzed client card usage at prohibited locations and identified 15 recipients with 20 or more EBT transactions. Of these, seven recipients had 20 or more transactions at the Turning Stone Casino, including one recipient with 71 EBT card transactions totaling more than $3,360.

Department of State (DOS): Monitoring of Not-for-Profit Cemetery Corporations for Fiscal Stability and Adequate Facility Maintenance (2016-S-79)
As of Sept. 30, 2016, DOS records indicate 642 cemeteries (37 percent) had overdue audits and 285 (16 percent) had delinquent annual reports. For 145 cemeteries (8 percent), audits were overdue and annual reports were delinquent as well. As of Dec. 1, 2016, 391 cemeteries (22 percent) had not been inspected in over seven years.

Municipal audits and examinations issued:

Village of Fleischmanns – Financial Condition and Clerk-Treasurer’s Duties (Delaware County)
The board has not developed a multiyear financial plan and did not adopt effective budgets because it did not receive accurate and sufficient financial information from the clerk-treasurer. Unpaid property taxes ($101,000) and water bills ($64,000) have severely impacted the village’s financial condition. The board also did not conduct an annual audit of the clerk-treasurer’s records and reports.

Village of Old Westbury – Justice Court (Nassau County)
The justices correctly reported financial activities to the Justice Court Fund on a monthly basis. However, they did not perform bank reconciliations or accountability analyses on a monthly basis during the audit period. As a result, two of the three judges had cash overages totaling $1,743.

Town of Orangetown – Overtime (Rockland County)
The board did not develop overtime budgets based on known needs and historical trends. Officials did not adequately monitor adopted budgets and allowed them to be over-expended each year. Auditors also found that although the police department’s collective bargaining agreement allows officers to accumulate up to 80 hours of overtime during the year, town officials did not adhere to those limits.

Town of Portland – Water Operations (Chautauqua County)
The town’s unaccounted-for water during the past two years was approximately 38 million gallons, or 40 percent of total production. Inaccurate master meters and customer meters have contributed to the unaccounted-for water. Water Districts 1, 3 and 7 reported deficit fund balances as of December 31, 2016, and all but two water districts realized operating deficits in 2016.

Rockville Centre Housing Authority – Claims Auditing and Cash Receipts (Nassau County)
The board needs to improve the claims auditing process to ensure all claims are properly audited, adequately supported and for legitimate authority purposes. The board also needs to improve its cash receipt process to ensure cash receipt functions are adequately segregated to safeguard authority assets.

Village of Southampton – Fire Department Length of Service Award Program (Suffolk County)
The village’s length of service award program (LOSAP) records for 47 of the department’s 138 active volunteers showed that at least 27 of these volunteers did not receive accurate LOSAP points. This may result in the loss of future benefits for volunteers or, conversely, in the village incurring more LOSAP costs than necessary.

Westchester Community College – Fixed Assets (Westchester County)
College officials have adopted effective fixed asset policies and procedures. The fixed asset policies and procedures establish the minimum cost to determine when assets should be recorded in the inventory records.

City of Yonkers – Budget Review (Westchester County)
The 2017-18 budget relies on nonrecurring revenue, such as fund balance, to balance its budget. The city could potentially face a shortfall of approximately $1.7 million in revenue if income tax surcharges remain at 2016-17 levels and a shortfall of $515,000 if revenue estimates from the Parking Violations Bureau are not realized. Police overtime costs could potentially be over budget by as much as $2.6 million based on the 2016-17 fiscal year overtime costs.

For access to state and local government spending and 50,000 state contracts, visit OpenBookNY. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

 

Attempting to vacate an adverse arbitration award rendered after a consensual arbitration process

Attempting to vacate an adverse arbitration award rendered after a consensual arbitration process

Transit Workers Union, Local 100 v New York City Tr. Auth., 2017 NY Slip Op 05446, Appellate Division, Second Department

The New York City Transit Authority [CTA] terminated the employment of a member of the Transit Workers Union, Local 100 [Local 100], a bus CTA driver, who had been involved in an incident with a pedestrian. Local 100 filed an Article 75 action seeking a court order vacating an arbitration award that held that CTA had just cause to terminate Local 100's member's employment because of the incident.

The Supreme Court denied the petition and Local 100 appealed.

The Appellate Division sustained the lower court's decision, explaining that "Where, as here, an arbitration award was rendered after a consensual arbitration process pursuant to the terms of a collective bargaining agreement, the award may not be vacated unless it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation of the arbitrator's power."

Contrary to Local 100's contention that the arbitrator's award was irrational, the Appellate Division ruled that "the arbitrator's award was supported by evidence in the record and is, therefore, rational."

Local 100 also argued that the penalty imposed, termination from employment, was irrational. The Appellate Division said it disagreed and sustained the dismissal of the bus driver from employment by CTA, concluding that the penalty did not violate any strong public policy or clearly exceed an enumerated limitation on the arbitrator's power.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2017/2017_05446.htm

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Suspension of a tenured teacher requires the timely filing of written charges and specifications with the clerk or secretary of the board of education

Suspension of a tenured teacher requires the timely filing of written charges and specifications with the clerk or secretary of the board of education

Decisions of the Commissioner of Education, Decision No. 17,054

After disposing of a number of procedural issues, the Commissioner of Education addressed Petitioner's allegations that she was unlawfully placed on administrative leave with pay without any disciplinary charges having been preferred against her pursuant to Education Law §3020-a in violation of her rights to administrative due process. Holding that this aspect of the appeal submitted by Educator was timely, the Commissioner explained that the "Suspension of a tenured teacher requires a board of education to file written charges with the clerk or secretary of the board (see Education Law §3020-a). Suspension of a tenured teacher without the filing of such charges within a reasonable time is ultra vires and constitutes a continuing wrong.

Turning to the merits of Petitioner's appeal, the Commissioner found that although Petitioner was advised that she was being placed on “paid administrative leave,” there was nothing in the record indicating the reason for her placement on such leave beyond the initial two days. In any event, the Commissioner found that Petitioner had been suspended for more than a year without any charges being preferred against her and that during that time she has been prohibited from coming onto school property. 

The only reason provided by the district for the continuation of Petitioner on such leave was her failure to submit a HIPAA-compliant release and submit to an independent medical examination as requested more than three months after she was placed on such "administrative leave."  However, said the Commissioner, there is nothing in the record to show that the district preferred charges alleging insubordination against Petitioner based on her alleged failure to comply with the district’s directive "to submit to a medical examination, as it is clearly empowered to do."

The Commissioner agreed that a board of education has the right to place an employee on administrative leave pending an investigation and, or pending disciplinary charges being filed against the employee and has the right to require a teacher to submit to a medical examination. However, on this record, the Commissioner ruled that the district’s actions constitute an unlawful suspension in the absence of its timely filing of disciplinary charges against Petitioner. Further, said the Commissioner, the board of education did not introduce any evidence that it was conducting an active investigation during the period of such administrative leave and had not established that it took action to file charges within a reasonable time in compliance with Education Law §2566(6). Further, the Commissioner noted that there was no "viable explanation" for the board's delay in bringing disciplinary charges against Petitioner.

The Commissioner concluded that as Petitioner's suspension was not acted upon in a timely manner, it must be deemed null and void and directed that all references to the suspension challenged by Petitioner be expunged from her record.

Finally, the Commissioner ordered that Petitioner be deemed to be on involuntary sick leave pursuant to Education Law §913 until she submits to a medical examination, indicating "that nothing in this decision precludes [the] board from filing [disciplinary] charges [against Petitioner] in accordance with Education Law §3020-a within the period of limitation prescribed in Education Law §3020-a(1).

The decision is posted on the Internet at:

http://www.counsel.nysed.gov/Decisions/volume56/d17054 

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Imposing a lesser disciplinary penalty than the one recommended by the disciplinary hearing officer

Imposing a lesser disciplinary penalty than the one recommended by the disciplinary hearing officer

2017 NY Slip Op 01628, Appellate Division, First Department

The penalty of termination of employment was imposed by a disciplinary hearing officer upon the petitioner in the Article 78 action [Petitioner], a special education home instruction teacher. The hearing officer found that Petitioner had submitted time sheets falsely stating that she had provided instruction to a disabled student and inaccurately indicated that she had reported to certain New York City Department of Education [DOE] schools and libraries over the two-month period in the aftermath of the impact of Hurricane Sandy on New York City and its surrounding area.

There was no question that the hearing officers findings were correct; Petitioner was guilty of all charges and specifications. Petitioner, however, appealed, seeking a court order not to setting aside the findings of misconduct but only an order modifying the penalty imposed on her. Further, Petitioner had acknowledged her error in judgment and pledged to change her practices and never to repeat the error.

Notwithstanding Petitioner's guilt of the charges misconduct filed against her, the Appellate Division ruled that under the circumstances the penalty of termination shocked its sense of fairness and applied the so-called Pell Doctrine [see Matter of Pell v Board of Educ., 34 NY2d 222, 233.

The Appellate Division explained that here there were extraordinary conditions to consider, as well as certain attempts at mitigation undertaken by Petitioner, including the following:

1. Petitioner and her student had been displaced from their homes as a result of Hurricane Sandy and Petitioner, although she had contacted her student's mother, did not provide any educational services to her student.

2. The Department of Education had not provided teachers such as Petitioner with any guidance or information as to the instruction of students displaced by Hurricane Sandy, other than that displaced students would not be penalized.

3. Petitioner had filled out the time sheets in question in advance of the dates to which those time sheets pertained and although she had  no provided instruction to the disabled student on the days indicated in those time sheets, she had instructed other students on each of the dates in question and she would have received the same salary regardless of how many students she had instructed or how many hours she had spent with them, and thus derived no extraordinary benefit from her actions.

4. Prior to Hurricane Sandy Petitioner had an unblemished record over a 17-year period as a special education home instruction teacher and the disabled student's mother had  testified at the disciplinary hearing that Petitioner was a good teacher who worked well with her son and had served his needs more successfully than had other teachers.

The Appellate Division characterized Petitioner's misconduct as "more a matter of lax bookkeeping than implementation of any venal scheme" and no intent to defraud or harm to the public. and any harm to DOE was mitigated. It then explained that "a [disciplinary] result is shocking to one's sense of fairness if the sanction imposed is so grave in its impact on the individual subjected to it that it is disproportionate to the misconduct, incompetence, failure or turpitude of the individual, or to the harm or risk of harm to the agency or institution, or to the public generally visited or threatened by the derelictions of the individuals."

Additional factors to be considered, said the court, "would be the prospect of deterrence of the individual or of others in like situations, and therefore a reasonable prospect of recurrence of derelictions by the individual or persons similarly employed."

Noting that at the hearing Petitioner admitted guilt and acknowledges that her misconduct warrants punishment since the disabled student was deprived of the services of a teacher for two months, the Appellate Division,  . Petitioner does not seek to set aside the findings of misconduct contained in the hearing officer's opinion, but only to modify the penalty imposed on her. She has acknowledged her error in judgment and has pledged to change her practices and never to repeat the error.

Citing Bolt v New York City Dept. of Education, 145 AD3d 450, the Appellate Division said that "There is no evidence that '[Petitioner] could not remedy her behavior'" and that it believed that the penalty of termination, "is disproportionate to the level of [Petitioner's] misconduct and exceeds the standards that society requires to be applied to this offense."

The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2017/2017_01628.htm

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A Reasonable Disciplinary Penalty Under the Circumstances - The text of this publication focuses on determining an appropriate disciplinary penalty to be imposed on an employee in the public service in instances where the employee has been found guilty of misconduct or incompetence. Now available in two formats - as a large, paperback print edition, and as an e-book. For more information click on http://booklocker.com/books/7401.html

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