Correcting the "fall-out" resulting from a wrongful termination

A former police officer became ineligible to file for service retirement benefits when she was wrongfully terminated from her position. 

Although the termination was corrected and the former officer was reinstated to her former position, it required the enactment of Chapter 800 of the Laws of 2021 to allow the former officer obtain retirement benefits from the New York State and Local Police and Fire Retirement System.

The bills sponsor explains that through no fault of her own, the police officer was ineligible to file for her service retirement benefit with the New York state and local police as the result of her wrongful termination because at the time of her termination she was ineligible to qualify for a service retirement benefit because she did not have "twenty qualifying years of service credit necessary to retire under her special retirement plan established pursuant to §384-d of the Retirement and Social Security Law. 

The  bill's sponsor, New York State Timothy M. Kennedy, explained that "a grave injustice was corrected" when the police officer's termination was vacated and the police officer was reinstated to her former position, providing her with the necessary twenty years of qualifying service credit required for her to be eligible to qualify for retirement benefits pursuant to Chapter 800.

 

Audits and reports issued by the New York State Comptroller during the week ending April 8, 2022

New York State Comptroller Thomas P. DiNapoli announced the following audits have been issued during the week ending April 8, 2022:

 Click on the text highlighted in color to access the complete audit report.

School Districts

George Junior Republic Union Free School District – Website Transparency (Tompkins County) Although school district officials maintain a website, certain financial information was either not posted or comprehensive, resulting in a lack of transparency. Officials did not post external audit reports, original and final annual budgets, or board meeting minutes as required.

Hancock Central School District – Non-Resident Student Tuition (Delaware County) Officials did not establish non-resident tuition (NRT) rates in the best interest of school district taxpayers. The board approved NRT contracts between the district and Wayne Highlands School District without performing a cost-benefit analysis. Over the past three school years, the board approved Wayne Highlands NRT rates that were less than the New York State Education Department’s maximum allowable rates and actual BOCES costs by a total of $1.29 million, or an average of $430,000 each school year.

LaFargeville Central School District – Information Technology (Jefferson County) District officials did not establish adequate IT controls over physical IT assets and non-student user account access to the district’s network. In addition to sensitive IT control weaknesses, auditors found that 235 IT assets costing $108,462 were not recorded in the district’s inventory records, and seven computers, two audio systems, one projector and 10 other electronic components that cost $9,266 could not be found.  

Northport – East Northport Union Free School District – Extra-Classroom Activity Fund (Suffolk County)Extra-classroom activity (ECA) funds were not properly collected, recorded, remitted, deposited, disbursed and reconciled. The district did not have proper procedures or a faculty auditor. Collections totaling $5,767 were not recorded in the accounting records and were not deposited in the bank and collections of $845,258 were missing key support. Records to support transactions totaling $134,449 were missing and 95 payment request forms totaling $66,149 either had no supporting documents or they lacked key information.

Oswego City School District – Separation Payments (Oswego County) District officials did not accurately calculate separation payments or benefits for five of the 10 employees reviewed. Officials made separation payments totaling $38,477 that were inconsistent with language in the employees’ CBA or employment contract. 

Otego-Unadilla Central School District – Information Technology (Otsego County) The board and district officials did not ensure computerized data was safeguarded. In addition to sensitive IT control weaknesses, auditors found the district had 58 unneeded user accounts and officials did not provide IT security awareness training. The board also did not adopt a written IT contingency plan.

Seneca Falls Central School District – Procurement (Seneca County) District officials did not always use a competitive process to procure goods and services to achieve the optimal use of district resources. Auditors reviewed 40 purchases and found 21 lacked competition or documentation to support an exception from competition. District officials did not competitively procure or document an exception from soliciting competition for services provided by six professional service providers that were paid a total of $895,668. The district also did not have written agreements with three professional service providers paid $112,262.

Wilson Central School District – Financial Management (Niagara County) The board and district officials did not properly manage fund balance and reserves. As of June 30, 2021, the recalculated surplus fund balance was $3.3 million, which exceeds the 4% statutory limit by 8 percentage points. District officials improperly restricted more than $1.6 million in the debt reserve fund. Workers’ compensation reserves fund balance of $836,000 can fund the average workers’ compensation expenditures for 26 years. Unemployment reserve balance of about $400,000 is nearly 200 times the average unemployment expenditure. By maintaining surplus funds in excess of the statutory limit and maintaining excess reserves, real property taxes may have been higher than necessary.

Wyandanch Union Free School District – Budget Review (Suffolk County) Auditors found that the significant revenue and expenditure projections in the proposed budget were reasonable. The district’s proposed budget complies with the tax levy limit because it includes a tax levy of $23,105,027, which is within the limits established by law.

Municipal Audits

Town of Coventry – Town Clerk/Tax Collector (Chenango County) The clerk did not record, deposit, remit or report all collections in a timely manner. As a result, the town’s collections were at a greater risk of being lost or misappropriated. The clerk did not accurately record all real property tax collections and deposited some collections and fees months after they were received. As of July 31, 2021, a portion of real property tax penalties collected ($1,601), a taxpayer’s double payment ($1,465), and a portion of clerk fees collected ($1,075) were not remitted or refunded to the appropriate parties. The board did not conduct the required annual audit of the clerk’s records.

Town of Delhi – Highway Department Leave Records (Delaware County) Town officials did not accurately maintain employee leave records. Leave balances for the former deputy highway superintendent from 2015 through 2019 were overstated by a total of 362 hours valued at almost $8,000. Of this, 272.5 hours was from leave time not being properly recorded, while 89 hours was attributed to the deputy’s failure to use sick leave for lost time due to an occupational injury, which resulted in an overpayment of his health and dental premiums of $6,411. The 2018 and 2019 leave balances of six of the other seven department employees were overstated by 94 hours. Based upon this examination and investigation of discrepancies the former deputy was arrested in September 2020 and charged with grand larceny in the third degree.

Town of Gaines – Town Clerk/Tax Collector (Orleans County) The clerk did not adequately perform her financial duties. The clerk did not deposit collections in a timely manner or perform bank reconciliations. The board also did not perform an annual audit of the clerk’s records, as required by New York State Town Law Section 123.

Town of Morehouse – Records and Reports (Hamilton County) The supervisor did not maintain the town’s accounting records and reports in a complete, accurate, up-to-date or timely manner. The town’s accounting records were not reliable and $2,082,924 in revenues and $673,497 in disbursements were not recorded. Cash balances were understated by about $1.7 million as of June 30, 2021. Federal payroll taxes were not filed timely, resulting in interest and penalties totaling $6,520. The 2012 through 2020 annual update documents (AUDs) were not filed with the Office of the State Comptroller, as required, and bank reconciliations were not performed. Monthly financial reports were not prepared for and submitted to the town board.

Town of Owego – Water Fund Operations (Tioga County) Town officials did not provide adequate oversight of water fund operations. Specifically: 104 of 1,380 water bills tested were not calculated correctly resulting in approximately $70,000 of lost revenue for the town. All 51 water bill adjustments reviewed, totaling $233,400, were not approved by the board. Of those, 28 adjustments totaling approximately $70,100 were also not appropriate. The consolidated water district had operating surpluses of over $465,000 in 2019 and $395,000 in 2020. 28 percent of the water produced, or 138.6 million gallons, is considered unauthorized non-revenue (lost) water, 12 percentage points above the national average.

Sullivan County Funding Corporation – Millennium Revolving Loan Program (2021M-196) Corporation officials did not award all funds from the program in accordance with established guidelines and did not ensure businesses complied with their agreements. The Loan Review Committee approved two loans that exceeded program loan allowances. One loan exceeded the allowance by $37,500, or 100%, and the second by $15,710, or 76%. Officials did not verify businesses’ self-reported job creation and retention numbers and had no procedures for recapture if job creation and retention expectations were not met. Six businesses self-reported they did not meet job creation and retention goals by a total of 24 jobs and seven businesses self-reported they met or exceeded job creation and retention goals by a total of 40 jobs.

Town of Ulysses – Information Technology (Tompkins County) Town officials did not ensure IT systems were adequately secured and protected against unauthorized use, access and loss. The board did not adopt adequate written IT policies or a written IT contingency plan. Officials did not adequately manage local user accounts. The board did not enter into a written service level agreement with the town’s IT service provider. Sensitive IT control weaknesses were communicated confidentially to officials.

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Track state and local government spending at Open Book New York. Under State Comptroller DiNapoli’s open data initiative, search millions of state and local government financial records, track state contracts, and find commonly requested data.

 

A probationary firefighter injured while participating in an approved basic firefighter training program is eligible for General Municipal Law §207-a disability benefits

Less than six months after being appointed as a full-time probationary firefighter by the City of Norwich the Plaintiff in the CPLR Article 78 action attended the Binghamton Fire Academy to complete an approved required training program. While practicing for one of the required physical tests, Plaintiff sustained an injury and was unable to complete the training or return to active duty. He subsequently applied for benefits pursuant to General Municipal Law §207-a, but Norwich denied his application contending that Plaintiff's injury did not occur in the course of his  performance of his official duties. 

As the collective bargaining agreement between the City and Plaintiff's union contained no provision for an administrative appeal of the denial of §207-a benefits, Plaintiff commenced a combined CPLR Article 78 and action for declaratory judgment proceeding seeking a court order annulling the City's determination, contending it was arbitrary and capricious and in violation of General Municipal Law §207-a.

Supreme Court rejected the City's argument that Plaintiff's "alleged injury occurred while training, not as a result of the performance of his duties" and held that the denial of Plaintiff's application for General Municipal Law §207-a benefits was arbitrary and capricious, which ruling the Appellate Division sustained upon Norwich's appeal.*

Explaining that "An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts," the Appellate Division observed that General Municipal Law §207-a provides for the payment of the full amount of regular salary or wages to a firefighter who is injured "in the performance of" or "as a result of" his or her job duties.

Further, said the court, "[t]o be eligible for benefits, a firefighter need only demonstrate 'a direct causal relationship between job duties and the resulting illness or injury" without regard to whether the specific injury-causing activity was one entailing the 'heightened risk' posed to firefighters." The court also noted that General Municipal Law §209-w requires that probationary firefighters, such as Plaintiff, complete an approved basic training program within a proscribed period of time following initial appointment.

Although Plaintiff was injured while practicing for the candidate physical ability test, a mandatory component of the required training and which had not occurred in the course of his actual performance of the required test, the Appellate Division opined that "successful completion of the candidate physical ability test was a necessary requirement of Plaintiff's position." Thus, said the court, Plaintiff "was engaged in the expected and foreseeable task of practicing for that test during a mandatory training program that was part of his duties as a probationary firefighter."**

Noting that §207-a[1] provides that payment of benefits shall be made to "[a]ny paid firefighter which term as used in this section shall mean any paid officer or member of an organized fire company or fire department of a city of less than one million population, ... who is injured in the performance of his or her duties," the Appellate Division concluded that statute applies to "any paid . . . member" of a municipal fire department and draws no distinction between certified and noncertified firefighters." Indeed, observed the Appellate Division, had the Legislature had intended to restrict General Municipal Law §207-a eligibility to only those firefighters who had obtained the required certification of basic training at the time of their injury, "it easily could have and surely would have written the statute to say so."

The bottom line: Benefits provided pursuant to General Municipal Law §207-a are available to both certified and noncertified paid firefighter[s] injured in the performance of their duties, including training required to qualify for the position.

Editor's note: In Cheryl M. Smith v County of Erie, et al., 210 AD2d 933, a probationary police officer injured during training was held eligible for General Municipal Law §207-c disability retirement benefits. 

*As the City of Norwich's administrative determination was made without having conducted an evidentiary hearing otherwise required by law, judicial review is limited to determining whether the City's determination had a rational basis and was not arbitrary and capricious.

**The Appellate Division also noted that Plaintiff "was attending the Fire Academy at the direction of the City that the training was paid for by the City and that [Plaintiff] was receiving full pay for his attendance and participation in the program."

Click HEREto access the Appellate Division's decision posted on the Internet.

Elements considered by courts when addressing a party's effort to vacate an arbitration award

Nassau County initiated a CPLR Article 75 action in Supreme Court in an effort to have the court vacate a contract disciplinary grievance arbitration award won by the Nassau County Investigators Police Benevolent Association, Inc. [PBA]. Nassau contended that the arbitration award "... was irrational, exceeded the arbitrator's powers, and violated public policy."

Supreme Court agreed with the County and denied PBA's petition seeking to confirm the arbitrator's award. The court then remitted the matter for a rehearing and determination before a different arbitrator. PBA appealed Supreme Court's ruling to the Appellate Division.

Citing Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471and other decisions, the Appellate Division explained that judicial review of arbitration awards is extremely limited, and an arbitration award may be vacated by a court only in the event "an arbitrator exceeds his or her power" and arbitrators exceed their power only in the event the award issued "violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power".

Here, said the Appellate Division, Supreme Court properly granted Nassau County's petition to vacate the arbitration award and properly denied the PBA's cross petition to confirm the award upon the court's finding that that the award was irrational and the arbitrator clearly exceeded a specifically enumerated limitation on his power. 

The relevant Collective Bargaining Agreement [CBA] provided that the arbitrator had no authority to modify the CBA and that the arbitrator "shall onlydecide whether misconduct or incompetence existed and, if so, the appropriate penalty permitted by [the CBA]" [emphasis in the Appellate Division's decision].

The court then explained that "[u]pon vacating an arbitration award, 'the court may order a rehearing and determination of all or any of the issues either before the same arbitrator or before a new arbitrator' [and that] It is within the court's discretion to remit an arbitration matter to the same or a different arbitrator."

Rejecting the PBA's contention to the contrary, the Appellate Division opined that "the Supreme Court providently exercised its discretion" in remitting the arbitration for a hearing before a different arbitrator, citing Matter of O'Flynn [Monroe County Deputy Sheriffs' Assn., Inc.], 141 AD3d at 1099].

Click HEREto access the Appellate Division's decision posted on the Internet.