Audits and reports issued during the week ending May24, 2021 by the New York State Comptroller

New York State Comptroller Thomas P. DiNapoli announced the following audits and reports were issued during the week ending May 21, 2021.

Click on the text highlighted in colorto access the complete audit report.

Local Governments

Brooktondale Fire District – Purchases and Disbursements (Tompkins County) - District officials ensured the purchases and disbursements auditors examined were proper and supported.  Auditors reviewed 39 disbursements (totaling $119,590) of 304 disbursements (totaling $826,000) paid during the audit period. The auditors found the reviewed purchases followed the district’s purchasing policy, were adequately supported, and approved prior to payment. As a result of this audit, there were no recommendations

City of Cortland – Credit Accounts and Employee Reimbursements (Cortland County) - City officials did not ensure all credit account purchases and employee reimbursements were properly supported and for appropriate purposes. There were no formal city-wide policies in place to address the usage, documentation and approval of credit account purchases. As a result, 314 of the 438 (72 percent) claims auditors reviewed were either not properly supported or for questionable or inappropriate purchases.

Town of Caneadea – Fund Balance Management (Allegany County)- The board did not effectively manage fund balance and spent down fund balance by $427,000 or 71 percent. The board also appropriated fund balances the town did not have, which resulted in deficit, or negative fund balances, in the general fund. The board did not develop and adopt a comprehensive written fund balance policy, a multiyear financial plan, or capital plans. As a result, the board’s ability to know what effect financial decisions would have on future fund balance levels was diminished.

Herkimer-Fulton-Hamilton-Otsego Board of Cooperative Educational Services (BOCES) – Online Banking (Fulton County, Hamilton County and Otsego County)- BOCES officials did not establish adequate controls to ensure online banking transactions were appropriate and secure. Online banking transactions are not compared to supporting documentation. Bank agreements lack important components such as identifying who is authorized to process online banking transactions or requiring the bank to provide confirmations of online transactions. A dedicated computer is not used for online banking.

In addition, auditors conducted reviews of 20 adopted budgets of various counties, cities, towns and villages across the state to assess whether local officials adequately considered the impact of the pandemic on their financial operations while developing their 2021 fiscal year budgets. Below are the findings of some of the communities reviewed:

Adequacy of 2021 Budgets – Genesee County - Genesee County officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Town of Herkimer (Herkimer County)- Town of Herkimer officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – City of Norwich (Chenago County) - City of Norwich officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – Village of Ossining (Westchester County)- Village of Ossining officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget.

Adequacy of 2021 Budgets – City of Saratoga Springs (Saratoga County)- City of Saratoga Springs officials adequately assessed the impact of the pandemic on financial operations while developing estimates for significant revenues and expenditures in the 2021 adopted budget. However, city officials should develop a plan and make budgetary modifications to balance the budget for the $1.15 million Federal aid revenue shortfall. They should also closely monitor revenue estimates for Aid and Incentives for Municipalities (AIM) funding and Video Lottery Terminal (VLT) aid throughout 2021 and develop a plan to balance the budget in the event these revenue projections are not fully realized. 

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Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 180,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.

 

Arbitrator's award in a disciplinary arbitration of alleged sexual harassment charges vacated as violative of public policy

The appointing authority [Employer] issued a notice of suspension and a notice of discipline to an employee [Respondent] advising him of his immediate suspension, without pay based on various disciplinary charges related to allegations of sexual harassment in the workplace. The notices specified that the Employer was seeking a penalty terminating Respondent's employment. Ultimately the matter proceeded to arbitration pursuant to a collective bargaining agreement [CBA] between the Employer and Respondent's collective bargaining representative.

Following a hearing, the arbitrator issued a "Decision and Award" sustaining four of the 13 charges served on Respondent and determined that:

1. There was probable cause for the interim suspension;

2. There were "certain mitigating factors warranted a penalty less than termination; and

[3] Characterized the Decision and Award as "a final warning" to Respondent that "any repeat of offending conduct will most surely result in [Respondent's] termination."

Employer initiated a CPLR Article 75 proceeding seeking to vacate the arbitration award, contending that the penalty was against public policy. Supreme Court granted the Employer's petition, vacated the award and remitted the matter for the imposition of a new penalty before a new arbitrator. Respondent appealed the court's ruling.

The Appellate Division said that the core issue presented is whether the arbitrator's award violated established public policy considerations prohibiting sexual harassment in the workplace, noting that, Supreme Court recognized, "that there is a strong public policy under both state and federal law that prohibits sexual misconduct in the workplace."

Noting that a court may vacate an arbitrator's award only on grounds stated in CPLR §7511(b), which include an instance where an arbitrator "exceed[s] his [or her] power" by rendering an award that violates a strong public policy, the Appellate Division observed that this limited public policy exception pertains "only when 'public policy considerations, embedded in statute or decisional law, prohibit, in an absolute sense, certain relief being granted by an arbitrator' [and] the courts must be able to examine the award on its face without engaging in extended fact-finding, or legal analysis, and conclude that public policy precludes its enforcement." This inquiry necessitates that courts gauge the penalty against the sustained charges.

The arbitrator sustained charges that alleged the Respondent had sexually harassed a female coworker. Indeed, the coworker's complaint with respect to the last incident suffered as the result of Respondent's alleged sexual harassment prompted an investigation and the filing of the instant disciplinary charges on the Respondent by the Employer. In addition, the coworker also filed criminal charges against Respondent, resulting in Respondent's plea of guilty to harassment in the second degree.

Conceding that the findings of the arbitrator are not challenged on this appeal, only the penalty imposed, the Appellate Division noted that under relevant provisions of the CBA, the arbitrator's decision:

1. As to the penalty to be imposed "shall be final and binding upon the parties"; and

2. The arbitrator is authorized to "take any ... appropriate action warranted under the circumstances including ... ordering reinstatement and back pay for all or part of any period of suspension without pay." 

The Employer, however, contended that the arbitrator's reinstatement of Respondent without conditions violates the public policy against sexual harassment.

Citing Newsday Inc. v Long Island Typographical Union No. 915, CWA, AFL-CIO, 915 F2d at 844-845, the Appellate Division noted that the United States Court of Appeals, Second Circuit, held that an arbitral award was properly vacated under the public policy exception where an arbitrator reinstated a terminated employee who had engaged in multiple acts of sexual harassment. 

Although the employee in Newsday had previously been disciplined for such conduct and warned, as here, that similar future conduct would warrant immediate discharge, the Appellate Division noted that Respondent did not have a disciplinary history. The Appellate Division, observed that unlike the employee in Newsday Respondent does not have a "disciplinary history", ... [but] ... "we have a series of four separate, escalating and outrageous sexual harassment incidents" by the Respondent.

This, said the Appellate Division, is "particularly troublesome" considering that Respondent had engaged in annual sexual harassment training since 2013 and, when confronted by his supervisors after two recent incidents of sexual harassment, "promised not to re-offend." In the words of the court, "The events that followed were even more egregious and rise to the level of criminal conduct, as memorialized in [Respondent's] guilty plea to the harassment charge."

Given the "extremely inappropriate nature" of Respondent's conduct, the Appellate Division concluded that the arbitrator's decision violated public policy, that the award failed to account for the rights of other employees to a non-hostile work environment and that it conflicted with the Employer's obligation to eliminate sexual harassment in the workplace. 

Finally, opined the court, "The fact that the victimized coworker no longer worked in the office is hardly a mitigating factor" nor is the penalty imposed on Respondent by the arbitrator "consistent with the arbitrator's 'significant concern' that [Respondent] failed to acknowledge his own wrongdoing."

Concluding that Supreme Court properly vacated the award as violative of the public policy prohibiting sexual harassment, the Appellate Division also ruled that Supreme Court was authorized to remit the matter to a different arbitrator for the imposition of a new penalty.

Click HERE to access the Appellate Division's decision. 

 

Unfair rejection of applicants for employment or a license required for employment because of a conviction of a criminal offense prohibited

In describing the thrust of New York State's Correction Law §752 the Appellate Division said §752 prohibits unfairly discriminating against persons previously convicted of one or more criminal offenses absent "a direct relationship between the offense(s) and the duties or responsibilities inherent in the license or employment sought or held by the individual, or such employment or license poses an unreasonable risk to the public" after consideration of certain enumerated elements set out in the statute.

The New York City Transit Authority [NYCTA] denied a former employee [Plaintiff] re-employment because he had been convicted of criminal possession of a firearm.

Plaintiff brought a CPLR Article 78 action and subsequently appealed Supreme Court's dismissal of his petition seeking a court order directing NYCTA to approve his application for reemployment. The Appellate Division sustained the Supreme Court's ruling, noting that NYCTA "reasonably determined" that Plaintiff's re-employment would pose an unreasonable risk. 

The court explained that when making its determination under color of §752, the public employer must consider the eight enumerated factors set out in Correction Law §753(1). These include, but are not limited to, considering the specific duties and responsibilities related to the employment sought, the age of the person at the time of the criminal offense, the seriousness of the offense, and information produced by the person with respect to his rehabilitation and good conduct. 

In its decision the court referred to an affidavit submitted by NYCTA's Director of Employment Operations for Human Resources indicating that NYCTA had reviewed the recommendation letters and certificates submitted by Plaintiff in support of his reemployment by NYCTA but had decided not to re-employ Plaintiff after considering all of the relevant factors including:

[1] The duties and role of the position Plaintiff was seeking;

[2] Plaintiff's prior work history with NYCTA;

[3] The seriousness of Plaintiff's prior misconduct; and 

[4] The amount of time that had elapsed since Plaintiff's misconduct.

Citing Bonacorsa v Van Lindt, 71 NY2d 60, the Appellate Division observed that a finding of unreasonable risk "depends upon a subjective analysis of a variety of considerations relating to the nature of the license or employment sought and the prior misconduct."

The Appellate Division opined that NYCTA's determination that Plaintiff would pose an unreasonable risk because "he was convicted of criminal possession of a firearm only two years before seeking re-employment with NYCTA and he sought a role that required unsupervised contact with the public and other employees" was reasonable and unanimously affirmed the Supreme Court's ruling.

Click HEREto access the Appellate Division's decision.

Performance reports and the testimony by administrators submitting the reports considered by the arbitrator in a disciplinary hearing

Supreme Court denied the Plaintiff's petition to vacate an arbitration award terminating Plaintiff's employment and granted the Appointing Authority's cross motion to dismiss Plaintiff's petition. Plaintiff appealed Supreme Court's disposition of the matter.

The Appellate Division unanimously affirmed [1] the Arbitrator's finding the Petitioner guilty of the disciplinary charges and specifications filed against him and [2] the penalty imposed, dismissal from his position. The court noted that the Arbitrator's decision was supported by the evidence, which included "eight observation reports and credible testimony of the principal and assistant principals who authored those reports," which described Plaintiff's persistent teaching deficiencies and inability to control his students.

Further, said the court, "[t]he evidence also demonstrated the school administrators' efforts to remediate [Plaintiff's] deficiencies, which ultimately were unsuccessful due to [Plaintiff's] lack of effort or interest in improving his performance."

Addressing the penalty imposed, termination of Plaintiff's employment, the Appellate Division opined that the penalty of dismissal "does not shock the conscience" in light of the prior disciplinary action taken against Plaintiff's which documented Plaintiff's "inability to meet standards of effective instruction" after considerable attempts were made to help him to improve his performance.

Click HERE to access the Appellate Division's decision.