Selected audits and reports posted by New York State Comptroller

Selected audits and reports posted by New York State Comptroller

Source: Office of the State Comptroller, July 24, 2018

Click on text highlighted in color to access the full report.

On July 24, 2018,  New York State Comptroller Thomas P. DiNapoli announced that the following audits and examinations had been issued.
       
State Education Department: The Network for Children's Speech, Occupational & Physical Therapy (CTN) (2017-S-79)
For the three fiscal years ended June 30, 2015, auditors identified $707,677 in ineligible costs that CTN reported for state reimbursement. The ineligible costs included $668,259 in personal service costs, including $511,672 in overstated personal service costs for special education itinerant teachers (SEIT), and $39,418 in other than personal service costs, which included $13,574 in insufficiently documented expenses and $13,491 in related-party lease expenses that exceeded the owner’s actual cost.

Erie County Medical Center Corp. (ECMCC): Employee Incentive and Bonus Payments (2018-F-06)
An initial audit report, issued in January 2017 found ECMCC did not properly administer certain incentive payments made to its employees. For the audit period reviewed, auditors identified $76,254 in incentive payments that should be recovered from employees because they were not justified under the terms of the relevant incentive plan, were distributed in error, or were miscalculated. In a follow-up, auditors found ECMCC has made progress addressing the issues identified in the initial audit.

Environmental Facilities Corp. (EFC): Monitoring the Green Innovation Grant Program (2017-S-19)
Auditors found EFC monitors some aspects of the projects by frequent communication with grantees, receiving progress photographs, and reviewing fiscal documentation to monitor project progression. However, EFC’s on-site monitoring of the projects auditors sampled frequently occurred later in the construction cycle than EFC’s goal of between 50 and 75 percent completion. Also, EFC does not perform site visits after project completion to determine if the grantee is properly maintaining the project and has installed the required signage.

Homes and Community Renewal (HCR): Office of Rent Administration (2018-F-3)
An initial report issued in December 2014 found the office had not established criteria for how long it should take to assign, address, or resolve tenant complaints. Records showed that a significant number of tenant complaints may have been unresolved for anywhere between one to four years, taking an average time of 6.7 months just to assign an incoming complaint to an examiner, among other findings. In a follow-up, auditors found HCR has made some progress in addressing the issues identified in the prior report.

Department of Taxation and Finance: Personal Income Tax (2018-BSE8-01)
Auditors examined personal tax refunds processed during the calendar year January 1, 2017 through Dec. 31, 2017. During that time, the department processed almost 7.7 million refunds totaling over $9.5 billion. Auditors stopped 10,414 refunds totaling almost $36.7 million and sent them to the department for follow up evaluation and appropriate action.

New York State Homes and Community Renewal (HCR): Taxable Travel (2018-BSE7-01)
Auditors examined travel expenses of a HCR rent inspector incurred during calendar years 2014, 2015, and 2016. The employee’s official station was New York City, and all of his assignments were within 35 miles of his official station.  According to state regulations, employees are not in travel status when their work locations are within 35 miles of their official station. Therefore, the employee was not entitled to reimbursement for expenses to travel from his home to his work area. HCR was required to report the commuting expenses as supplemental wages of the employee, but did not.  As a result, we determined the employee incurred $3,543, $2,556, and $1,838 in personal commuting expenses during 2014, 2015, and 2016, respectively.
 
New York City Health and Hospitals Corp. (HHC) (2017-N-2)
Auditors reviewed files for a random sample of 200 direct hire and 98 temporary nurses from five HHC facilities or organizations to verify that these nurses were properly screened prior to being hired and were continuously monitored after hire. Of the 200 direct hire nurses in the sample, 41 (21 percent) had not been fingerprinted. Of these, 38 were hired before 2002 – when fingerprinting became required. For direct hire nurses, various background checks were not completed before hire. None of the facilities followed HHC procedures for maintaining documentation of all screening checks. Further, there was no evidence that HHC reviewed background check documentation, as required. Performance evaluations were not completed for 25 direct hire nurses, including 24 at a single facility.

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 145,000 contracts, billions in state payments and public authority data. 

 

An individual's General Municipal Law §207-c benefits may be discontinued where the decision to do so is supported by substantial evidence

An individual's General Municipal Law §207-c benefits may be discontinued where the decision to do so is supported by substantial evidence

Matter of Cordway v Cayuga County, 2018 NY Slip Op 04873, Appellate Division, Fourth Department

Petitioner, a deputy sheriff, commenced a CPLR article 78 proceeding challenging the determination that terminated the disability benefits the deputy sheriff had been receiving pursuant to General Municipal Law §207-c. The Hearing Officer issued a report recommending that Petitioner's continued receipt of benefits be terminated. Contrary to Petitioner's contention, the Appellate Division found "no basis to disturb the Hearing Officer's determination terminating the benefits."

Although Petitioner presented evidence supporting his contention that his injuries and ailments were causally related to the work-related, the Hearing Officer was entitled to weigh the parties' conflicting medical evidence and to assess the credibility of the witnesses. Where the evidence is conflicting and there is room for a choice, a court may not weigh the evidence or reject the Hearing Officer's decision where his or her determination is supported by substantial evidence

Citing Matter of Park v Kapica, 8 NY3d 302, the court opined that an employer's "initial award of Section 207-c benefits does not require the continuation of such benefits inasmuch as "[t]he continued receipt of Section 207-c disability payments is not absolute."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04873.htm

Employer's termination of a biologically male employee transitioning from male to female held unlawful discrimination on the basis of sex

Employer's termination of a biologically male employee transitioning from male to female held unlawful discrimination on the basis of sex

EEOC v R.G. and G.R. Harris Funeral Home., USCA, 6th Circuit, No. 16-2424

Plaintiff, born biologically male, while living and presenting as a man, worked as a funeral director at R.G. & G.R. Harris Funeral Homes, Inc. [Funeral Home], a closely held for-profit corporation.

In an unlawful discrimination complaint filed with the Equal Employment Opportunity Commission [EEOC] Plaintiff alleged that the Funeral Home terminated her* after she had advised the Funeral Home that she intended to transition from male to female and would commence presenting herself and dress as a woman while at work.

In the course of EEOC investigation of Plaintiff's complaint it found that the Funeral Home provided its male public-facing employees with clothing that complied with the company’s dress code while female public-facing employees received no such allowance.

The EEOC subsequently brought suit against the Funeral Home in which the EEOC charged the Funeral Home with violating Title VII of the Civil Rights Act of 1964 [Title VI] by (1) terminating Plaintiff's employment on the basis of her transgender or transitioning status and her refusal to conform to sex-based stereotypes; and (2) administering a discriminatory-clothing-allowance policy.

In its motion for summary judgment, EEOC argued that it was entitled to judgment as a matter of law on both of its claims.

The Funeral Home, in contrast, contended that it had not violate Title VII by requiring Plaintiff to comply with a sex-specific dress code that it asserts equally burdens male and female employees, and, in the alternative, that Title VII should not be enforced against the Funeral Home because requiring the Funeral Home owners to employ Plaintiff while she dresses and represents herself as a woman would constitute an unjustified substantial burden upon the Funeral Home’s owner's sincerely held religious beliefs in violation of the Religious Freedom Restoration Act [RFRA].

The federal district granted summary judgment in favor of the Funeral Home on both claims.

The Circuit Court of Appeals reversed, holding that:

[1] the Funeral Home engaged in unlawful discrimination against Plaintiff on the basis of her sex; and 

[2] the Funeral Home has not established that applying Title VII’s proscriptions against sex discrimination to the Funeral Home would substantially burden its owner's exercise of their religious beliefs and, therefore, the Funeral Home was not entitled to a defense under RFRA.

Further, said the Circuit court, (a) even if the Funeral Home's owner's religious exercise were substantially burdened, the EEOC established that enforcing Title VII is the least restrictive means of furthering the government’s compelling interest in eradicating workplace discrimination against Plaintiff and (b) that the EEOC may bring a discriminatory-clothing-allowance claim in this case because such an investigation into the Funeral Home’s clothing-allowance policy was reasonably expected to grow out of the original charge of sex discrimination that Plaintiff submitted to the EEOC.

The Circuit Court issued a judgment to the EEOC on its unlawful-termination claim, and remanded the case to the district court "for further proceedings consistent with this opinion."

* The Circuit Court used female pronouns in its decision in accordance with the preference Plaintiff expressed through her briefing to this court.

The decision is posted on the Internet at:

https://cases.justia.com/federal/appellate-courts/ca6/16-2424/16-2424-2018-03-07.pdf?ts=1520443817

Terminated educator alleges that her employer breached the employment agreement and negligently terminated her

Terminated educator alleges that her employer breached the employment agreement  and negligently terminated her

Morrison v Buffalo Board of Education, et al, USCA, 2nd Circuit, No. 17-3496-cv

A school administrator, [Plaintiff] terminated from her position, sued the City of Buffalo Board of Education [District] and numerous individual administrators alleging breach of her employment agreement [Agreement] and "negligent termination."

The genesis of Plaintiff's termination was her alleged failure to obtain the professional certifications required by the Agreement. 

Although Plaintiff acknowledged that she held only a Florida certification at the time she applied for a position with the District, she contended that she “truthfully declared” her lack of a valid New York certification during the application process and was hired nonetheless." Plaintiff further alleged that when, during her first week on the job, she was directed to apply for interstate certification reciprocity, she promptly did so and said that  "the New York State Department of Education awarded her a conditional School Building Leader certificate [and] she was directed to apply for a School District Leader  internship certificate, which certificate she received in March 2014.

Accordingly, Plaintiff asserted that she was "adequately certified" at the time of her termination in April 2014.

The Circuit Court vacated that part of the district court's decision concerning Plaintiff's  breach of contract claim, affirming the lower court's ruling "in all other respects," explaining that "In dismissing the breach of contract claim, the district court here determined that [Plaintiff] failed to satisfy a contractual condition requiring her to maintain certain professional certifications and, thus, that [the District] did not violate the Agreement by terminating her employment. Because the first conclusion cannot be reached as a matter of law on the present record, [district court] dismissal was premature." 

The decision is posted on the Internet at:

http://www.ca2.uscourts.gov/decisions/isysquery/cdbc3784-2c1b-4017-b7d6-e13c18d43d65/21/doc/17-3496_so.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/cdbc3784-2c1b-4017-b7d6-e13c18d43d65/21/hilite/

Placing an employee on involuntary leave pursuant to Civil Service Law §72.5

Placing an employee on involuntary leave pursuant to Civil Service Law §72.5

NYC Office of Administrative Trials and Hearings, OATH Index No. 1865/18

Based on statements a customer service representative [Anonymous] was reported to have made to co-workers, the Appointing Authority [Authority] placed Anonymous on involuntary leave pursuant to Civil Service Law §72.5 in consideration of safety concerns about Anonymous' presence at the work place.

Anonymous filed a timely objection to being placed on §72.5  leave, typically refered to as "emergency leave." After a two-day hearing during which Authority presented the testimony of a psychiatrist, who examined Anonymous and concluded he was unfit, as well as the testimony of two of Anonymous’ co-workers and Anonymous' testimony on his own behalf and the testimony of a psychiatrist called by Anonymous a witness, OATH John B. Spooner found that Authority's failed to meet the standard justifying its placing Anonymous on emergency leave.

Judge Spooner said the Authority did not prove that [1] it had probable cause to believe that Anonymous was dangerous or [2] his presence in the workplace would “severely interfere" with its operations, or [3] Anonymous was likely to be violent. Accordingly, said the ALJ, Authority failed to demonstrate that placing Anonymous on an “extraordinary” pre-hearing suspension authorized by §72.5 was necessary.

Judge Spooner recommended that Authority's petition be dismissed and that Anonymous be awarded back pay for the period of pre-trial leave. Authority, however, rejected the ALJ’s recommendation, finding that it had proved that, due to his psychiatric disorders, Anonymous was unfit to work. Authority also found that Anonymous was not entitled to back pay for the period of prior to his hearing as it had a sufficient basis to institute emergency leave.*

The "standard Section 72 procedure" is triggered by the appointing officer's determina­tion that the individual is physically or mentally unable to perform his or her duties and should be placed on leave of absence and CSL Section 72.1 requires completing a number of procedural steps before the individual may actually be placed on Section 72 leave over his or her objections.

 
In contrast, Section 72.5 relied upon by Authority in Anonymous' situation, essentially sets out an exception to the "standard procedure" that allows it to be truncated only in the event the appointing authority determines that there is probable cause to believe that the continuation of the individual on the job poses a danger to persons, property or the agency's operation.

The "standard procedure" followed under Section 72 may be summarized as follows:

1. The appointing authority determines than an employee is unable to perform the duties of his or her position by reason of an ordinary disability.

2. The appointing authority requires such employee to undergo a medical examination to be conducted by a medical officer selected by the civil service department or munici­pal commission having jurisdiction.

3. The appointing authority provides the employee and the civil service department or commission, in writing, the facts that constitute the basis for the judgment that the employee is not fit to perform the duties of his or her position prior to the medical examination.

4. If the medical officer certifies that the employee is not physically or mentally fit to perform the duties of his or her position, the appointing authority notifies the em­ployee of any proposed Section 72 leave and the proposed date on which such leave is to commence.

5. The employee is also advised of his or her right to object to his or her placement on the proposed Section 72 leave of absence and to request a hearing.

6. If the employee requests a hearing, the appointing authority is to give the employee a hearing within 30 days of the receipt of the request. The appointing authority is also required to provide the employee and the employee's personal physician or authorized representative, with copies of all diagnoses, test results, observations and other data supporting the appointing authority's decision.

7. The employee is not to be placed on leave until a final determination is made by the appointing authority after the hearing is held.

As is typical in administrative actions of this type, the appointing authority has the burden of proof and must provide the evidence that the employee is mentally or physically unfit to perform his or her duties.

Following the receipt of the hearing officer's findings and recommendations, the ap­pointing authority may decide to (1) uphold the original proposed notice of leave of absence, (2) withdraw such notice or (3) modify the notice as may be appropriate.

If the final determination is to place the individual on Section 72 leave, the employee is to be advised of his or her right to appeal the determination to the civil service commis­sion having jurisdiction as provided by CSL Section 72.3.

* §75.2, in pertinent part, provides "5. Notwithstanding any other provisions of this section, if the appointing authority determines that there is probable cause to believe that the continued presence of the employee on the job represents a potential danger to persons or property or would severely interfere with operations, it may place such employee on involuntary leave of absence immediately; provided, however, that the employee shall be entitled to draw all accumulated unused sick leave, vacation, overtime and other time allowances standing to his or her credit...."

The Anonymous decision, including Authority's justification for rejecting the OATH ALJ's recommendation, is posted on the Internet at:

http://archive.citylaw.org/wp-content/uploads/sites/17/oath/18_cases/18-1865.pdf

Separation of Powers

Separation of Powers

Garcia v New York City Dept. of Health & Mental Hygiene, 2018 NY Slip Op 04778, Court of Appeals

Among the issues addressed by the Court of Appeals in this action was an alleged violation of the doctrine of Separation of Powers.

In response to the Appellate Division's holding that the adoption of certain administrative rules violated the separation of powers doctrine, New York City argued that the legislature has properly delegated to New York City's Board of Health, through Administrative Code §17-109, the necessary authority to promulgate the rules at issue.* The City contended that the Appellate Division inappropriately applied the so-called Boreali factors** "to second-guess the manner in which the Board exercised its regulatory authority, instead of merely determining whether the Board possessed the requisite authority to promulgate the rules in the first instance."

The Court of Appeals agreed. Citing Matter of NYC C.L.A.S.H., Inc. v New York State Off. of Parks, Recreation & Historic Preserv., 27 NY3d 174, the court explained that "The concept of the separation of powers is the bedrock of the system of government adopted by this State in establishing three coordinate and coequal branches of government, each charged with performing particular functions." This principle, "implied by the separate grants of power to each of the coordinate branches of government, requires that the Legislature make the critical policy decisions, while the executive branch's responsibility is to implement those policies."

Separation of powers challenges, noted the court, "often involve the question of whether a regulatory body has exceeded the scope of its delegated powers and encroached upon the legislative domain of policymaking."

In this regard an administrative agency can adopt regulations that go beyond the text of the relevant legislation, "provided they are not inconsistent with the statutory language or its underlying purposes." On the other hand, as it ruled in Greater N.Y. Taxi Assn., 25 NY3d at 609, the Court of Appeal said that "The guiding legislation 'need not be detailed or precise as to the agency's role' and, as an overarching principle, 'common sense must be applied when reviewing a separation of powers challenge.'"

The "difficult-to-define line between administrative rule-making and legislative policy-making" was clarified [by Boreali] by articulating four "coalescing circumstances" relevant to rendering such a determination as follows:

1. Did the regulatory agency balanced costs and benefits according to preexisting guidelines rather than make value judgments requiring difficult and complex choices between broad policy goals to resolve social problems;

2. Did the regulatory agency "merely filled in details of a broad policy" or did it create its own comprehensive set of rules without benefit of legislative guidance;

3. Had the legislature been unsuccessful in its efforts to enact laws pertaining to the issue; and

4. Did the regulatory agency use "special technical expertise in the applicable field."

Ultimately any Boreali analysis, said the court, "should center on the theme that it is the province of the people's elected representatives, rather than appointed administrators, to resolve difficult social problems by making choices among competing ends" as "A rule has the force of law, but it is not a law; rather, it implements or applies law or policy" and the administrative body must act within the limitations of its legislatively-delegated powers.

Rejecting the Petitioners' separation of powers challenge, the Court of Appeals emphasized that a Boreali analysis is not aimed at determining whether a regulatory agency adopted the most desirable method or type of regulation and the factors enumerated in Boreali "are not designed to second-guess agency regulations that properly falls within the agency's purview." In the event the Boreali factors indicate that the agency has been empowered to regulate the matter in question, the court said that the separation of powers analysis "goes no farther in reviewing the agency's methods."***

* The challenged rules: The City's Board of Health's amendments to the New York City Health Code mandating that children between the ages of 6 months and 59 months who attend city-regulated child care or school-based programs receive annual influenza vaccinations.

** Boreali v Axelrod, 71 NY2d 1.

*** The Court of Appeals also rejected Petitioner's alternative theory, that the City's flu vaccine rules were invalid because they conflicted with the State's Public Health Law and thus violated the Premption Doctrine which expresses "a fundamental limitation on home rule powers" and "embodies the untrammeled primacy of the [l]egislature to act with respect to matters of State concern."

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_04778.htm

Claim that the arbitrator exceeded a limitation in the collective bargaining agreement held to be, in fact, a challenge to the arbitrator's interpretation of the agreement

Claim that the arbitrator exceeded a limitation in the collective bargaining agreement held to be, in fact, a challenge to the arbitrator's interpretation of the agreement

Matter of Lift Line, Inc. (Amalgamated Tr. Union, Local 282), 2018 NY Slip Op 05102, Appellate Division, Fourth Department

The terms of the collective bargaining agreement (CBA) between Lift Line, Inc., [Employer] and the Amalgamated Transit Union, Local 282 [Local 282] provided that, if the discharge of an employee was found to be without "just cause," the record of the offense would be cleared from the employee's personnel file.

The CBA also incorporated a memorandum of agreement with respect to employee attendance (Attendance Policy) that set forth an eight-step disciplinary process, including discharge of the employee at step eight. The Attendance Policy provided that an employee "who is tardy will progress one step in the attendance disciplinary process for each instance of tardiness," and would move back one step if he or she did not have "another incident of tardiness for six consecutive months after such discipline."

The employee [grievant] here was late to work on seven occasions over the course of a little over one year and was thus at step seven at the time of the incident that led to her termination. In that incident, she was one minute late to work after her vehicle was stuck behind a disabled train at a rail crossing near her employer's facility.

The arbitrator analyzed the just cause provision together with the Attendance Policy and concluded that Employer's strict application of the attendance disciplinary process to terminate the grievant was "overly severe, especially with the absence of any evidence that efficiency or other difficulties were created by the [g]rievant's one-minute tardiness."

Supreme Court granted Employer's petition to vacate the arbitration award, in part, denied the application of Union to confirm the arbitration award, and reimposed the penalty of employment termination as provided by the CBA. The Appellate Division unanimously reversed the Supreme Court's ruling "on the law," granted the Union's application and confirmed the arbitration award.

As relevant here, said the Appellate Division, "[A]n arbitrator's rulings, unlike a trial court's, are largely unreviewable [and] [a]n arbitrator's interpretation may even disregard the apparent, or even the plain, meaning of the words of the contract before him [or her] and still be impervious to challenge in the courts." Explaining that an arbitration award is irrational "if there is no proof whatever to justify," the court said it agreed with the Union  that the arbitrator's award in this instance was not irrational* as here "there is a colorable justification for the arbitrator's determination."

The Attendance Policy was a no-fault, straightforward progression of discipline that would be imposed for every incident of tardiness. Nevertheless, the CBA also had the "just cause" provision, and the arbitrator concluded that strict adherence to the attendance policy could be rejected in exceptional cases.

In concluding that the grievant's termination was overly severe, the court said that the arbitrator relied on the fact that the grievant called in 10 minutes before her shift to say that she might be late due to the delay caused by the disabled train; another employee called in to report the same delay; the delay was unexpected and abnormal; the grievant was only one minute late; and no difficulties were created by the grievant's tardiness.

Thus, said the Appellate Division, "[t]he arbitrator made a rational interpretation of the just cause provision and the Attendance Policy. "Although the court recognized that "a different construction could have been accorded to the subject provision[s] of the [CBA]," it decided that "it cannot be stated that the arbitrator gave a completely irrational construction to the provision in dispute and, in effect, exceeded [his] authority by making a new contract for the parties."

Observing that the CBA provided that the arbitrator "shall have no power or authority to add to, subtract from, modify, change, or alter any provisions of this Agreement,"** the Appellate Division found that the arbitrator had not impose any new requirement upon Employer before it could discipline its employees and thus did not add to or alter the CBA. Rather, as the court had indicated earlier in its opinion, "the arbitrator determined, under the specific facts of this case, that the penalty of termination could not be upheld" and did not adopt any new rules that Employer must follow in future disciplinary cases. [Emphasis supplied by the court.]

Indeed, the court commented that "[t]he argument that the arbitrator exceeded a limitation in the collective bargaining agreement . . . is nothing more than a challenge to the substance of the arbitrator's contract interpretation, which . . . is foreclosed." 

* The Appellate Division, however, noted that "[a]n arbitration award must be upheld when the arbitrator offer[s] even a barely colorable justification for the outcome reached."

**A court may vacate an arbitration award if it finds that the rights of a party were prejudiced when "an arbitrator . . . exceeded his [or her] power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made" (CPLR 7511 [b] [1] [iii])." Such an excess of power occurs only where the arbitrator's award violates strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator's power.

The decision is posted on the Internet at:

http://www.nycourts.gov/reporter/3dseries/2018/2018_05102.htm