Audits and reports issued by the New York State Comptroller during the week ending July 22, 2022

New York State Comptroller Thomas P. DiNapoli announced the following audits were issued for State Departments and Agencies, Municipalities and School Districts during the week ending July 22, 2022.

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

State and New York City Audits

The Division of Military and Naval Affairs: Internal Controls Over Selected Financial Operations (Follow-Up) (2022-F-4)
The Division of Military and Naval Affairs (DMNA) manages New York State’s military forces, which are composed of the New York Army National Guard, the New York Air National Guard, the New York Naval Militia, and the New York Guard. An audit issued in 2020 found numerous weaknesses in DMNA’s internal controls to ensure that state assets were appropriately managed and safeguarded. In a follow-up audit, auditors found that DMNA has made significant progress in addressing the issues identified in the initial audit, implementing all nine recommendations that were made.

 

State Education Department: Oversight of Pupil Transportation Services (Follow-Up) (2022-F-5)
Approximately 2.3 million children are transported to school daily across the state, with one third riding School District-owned buses, one third riding contracted buses, and the remaining third utilizing public transportation. The New York State Education Law requires the State Education Department to take steps to ensure that school bus drivers, monitors, and attendants are qualified and properly trained. A 2020 audit found that the Department could improve its efforts to monitor School Districts’ compliance with its requirements and, consequently, did not have assurance that drivers, monitors, and attendants across the state were qualified and had completed required training. The follow-up audit found that Department officials made limited progress in addressing the issues identified in the initial audit report.

 

NYC Department of Transportation: Street Construction-Related Permits 2020-N-6
The NYC Department of Transportation issues 150 different types of sidewalk and roadway construction permits that cover activities such as street openings, sidewalk construction and installation of canopies over sidewalks. DOT Highway Inspections and Quality Assurance (HIQA) is the agency’s enforcement unit and conducts construction site inspections to ensure permittees comply with the laws, regulations, and permit specifications and stipulations. Auditors determined that DOT did not always ensure that permittees were in compliance with street permit requirements.

 

Department of Taxation and Finance - Collection of Petroleum Business Tax and Motor Fuel Excise Tax (Follow-Up) 2021-F-30
An audit issued in 2020 looked at the systems and practices that the Department of Taxation and Finance put in place to allow it to appropriately collect Petroleum Business Tax and Motor Fuel Excise Tax, as they are required to do by law. The audit uncovered weaknesses in the Department’s efforts to appropriately collect taxes and suggested recommendations for how the Department could improve oversight of distributors and tax collection processes. In a follow-up, auditors found the Department has made significant progress in addressing the issues identified in the initial report, implementing both recommendations that were made.

 

United Cerebral Palsy Association of Nassau County, Inc. – Compliance With the Reimbursable Cost Manual
United Cerebral Palsy Association of Nassau County, Inc. (CPN) is a State Education Department (SED)-approved, non-profit special education provider located in Roosevelt. Among other programs, CPN provides preschool education services to young children with disabilities. CPN is reimbursed for these services through rates set by SED. Auditors looked at the fiscal year ended June 30, 2018, and found several issues with CPN’s reporting, including nearly $160,000 in ineligible costs reported by CPN on its Consolidated Fiscal Reports.

 

All My Children Day Care — Compliance With the Reimbursable Cost Manual
All My Children Day Care (AMC) is a New York City-based not-for-profit organization authorized by SED to provide Special Education Itinerant Teacher (SEIT) services to young children with disabilities. AMC also operated other programs, including the New York City Administration for Children’s Services’ Early Learn program. Auditors found that on its annual Consolidated Fiscal Reports, AMC failed to provide certain key documents it should have retained to support the expenses claimed on its annual CFRs, including over $3 million in unsupported costs for fiscal year 2014-15.

 

Municipal Audits

Finger Lakes Horizon Economic Development Corporation – Revolving Loan Fund Program (2022M-36)

The board did not properly manage and monitor the revolving loan fund program. As a result, the board cannot ensure the loan proceeds were used to further the corporation’s mission. Revolving loan fund activity was not adequately monitored to ensure loan recipients’ performance goals were achieved. Officials requested follow-up information from loan recipients to verify job creation/retention goals but did not enforce these goals if not achieved. No practices were in place to ensure penalties were accessed when warranted and no formal written policies and procedures were in place for officials to monitor whether loan disbursements were used for their intended purposes. Clear, written guidance was not developed for loan project eligibility, how loan applications should be reviewed or approved, confirming loan funds were used for approved purposes and goals, or how collections should be enforced.

 

Village of Hewlett Neck – Financial Management (2022M-35)

The board did not adopt realistic budgets or monitor and effectively manage fund balance. Revenues were underestimated by a total of $334,095 and appropriations were overestimated by a total of $171,095 from 2017-18 through 2020-21. As a result of the village officials’ budgeting practices, officials collected a four-year total of $505,187 more than necessary in taxes and maintained an excessive level of surplus fund balance in the general fund from 2017-18 through 2020-21, ranging between $364,415 in 2017-18 (100% of the ensuing year’s budget), and $445,858 in 2019-20 (109% of the ensuing year’s budget).

 

Town of Lansing – Information Technology (2022M-66)

Town officials did not ensure IT systems were adequately secured and protected against unauthorized use, access, and loss. In addition to sensitive IT control weaknesses that were communicated confidentially to town officials, auditors found the town had seven unneeded network user accounts and did not create adequate written IT policies for network user access, online banking, and breach notification. The board did not require IT security awareness training for computer users.

 

City of Poughkeepsie Industrial Development Agency – Project Approval and Monitoring (2021M-168)

The City of Poughkeepsie Industrial Development Agency (CPIDA) Board did not properly evaluate and approve projects and monitor the performance of businesses that received financial benefits. Specifically, the board did not have a process to adequately oversee and monitor CPIDA projects. As a result, projects were missing applications, cost-benefit analyses, project agreements, and uniform tax exemption policies. The board cannot verify two projects’ self-reported and calculated revenues upon which their payments in lieu of taxes (PILOTs) are based on. These projects have 99-year PILOT agreements. CPIDA officials did not ensure that projects were assessed late payment penalties totaling $30,664. 

 

School District Audits

Genesee Valley Board of Cooperative Educational Services – Purchase Cards (2022M-27)
While the 198 BOCES purchase card charges reviewed were adequately supported and for valid purposes, only one was properly approved. The purchasing agent did not approve 197 purchases totaling approximately $46,000 before goods or services were obtained.

Genesee Valley Board of Cooperative Educational Services – Reserve Funds (2022M-39)
While the board and BOCES officials properly established reserve funds, they did not transparently fund the reserves or use or maintain reserve funds at reasonable levels. The board and officials used unnecessarily restricted funds that could have been refunded to school districts and overfunded two reserves totaling $1.9 million. Officials could not demonstrate the balances in the four remaining reserves, totaling approximately $800,000, were needed or reasonable and did not adopt a written reserve fund policy.

Ogdensburg City School District – Medicaid Reimbursements (2022M-52)
The district did not maximize Medicaid reimbursements by submitting claims for all eligible Medicaid services provided. Claims were not submitted and reimbursed for 1,365 eligible Medicaid services provided totaling $65,254, which resulted in the district not realizing $32,627 in revenue. The district lacked adequate procedures to ensure that Medicaid claims were submitted in a timely manner, necessary documentation requirements were met, and disallowed claims were reviewed and resubmitted when appropriate.

Otselic Valley Central School District – Procurement (2022M-58)
District officials did not always seek competition to procure goods and services not subject to competitive bidding. Out of nine purchases under the competitive bidding threshold reviewed totaling $109,671 and two professional service contracts totaling $35,038, officials did not seek competition for a transportation efficiency study ($32,500), purchases of ice melt ($10,845) and information technology equipment ($8,512), or for the district’s attorney that was paid $21,038 during the audit period. District officials may have saved $13,781 on fuel costs had they been able to use state contracts. Procurement policies and procedures were inadequate and did not help ensure officials sought competition for goods and services.

Town of Webb Union Free School District – Financial Management (2022M-53)
The board and district officials did not adopt realistic budgets and did not properly manage fund balance. The board consistently overestimated appropriations in the 2018-19 through 2020-21 budgets by a total of $3.7 million (16%) and appropriated fund balance totaling $3.5 million that was not needed. Officials improperly overstated fiscal year-end encumbrances by approximately $974,000 from 2018-19 through 2020-21. When unused appropriated fund balance and invalid encumbrances are added back to surplus fund balance, it increased to approximately 26%, as of June 30, 2021, exceeding the 4% statutory limit. Despite reporting excess surplus fund balance, the board increased the real property tax levy by 6.8% from 2017-18 through 2021-22 and levied more taxes than needed to fund operations.

West Islip Union Free School District – Financial Management (2022M-40)
The board appropriated fund balance that was not needed to fund operations and was not transparent when funding reserves. The board adopted budgets that overestimated appropriations by $24.6 million, or approximately 5.2% over a four-year period. The board annually appropriated fund balance that was not needed to pay operational expenses and made year-end unbudgeted transfers to reserves to stay within the statutory surplus fund balance limit. The board did not properly establish the workers’ compensation and unemployment insurance reserves which are also overfunded, having enough money to pay the average annual expenses for eight and 51 years respectively. The board and officials’ budgeting practices and management of fund balance and reserves resulted in levying more taxes then were needed to fund operations.

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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.

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NYPPL's New York Public Personnel Law Handbooks are listed below and are available for purchase from BookLocker, Inc.

The Discipline Book - A concise guide to disciplinary actions involving public officers and employees in New York State set out as an e-book. For more about this electronic handbook, click HERE.

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. For more information click HERE.

Disability Benefits for fire, police and other public sector personnel - an e-book focusing on retirement for disability under the NYS Employees' Retirement System, the NYS Teachers' Retirement System, General Municipal Law Sections 207-a/207-c and similar statutes providing benefits to employees injured both "on-the-job" and "off-the-job." For more information about this e-book click HERE.

The Layoff, Preferred List and Reinstatement Manual - This e-book reviews the relevant laws, rules and regulations, and selected court and administrative decisions. Click HEREfor more information. 

Government Technology webinars you may have missed

Knowledge Management: UtahEmpowers IT teams to run faster, leaner and better

Knowledge management – processing, managing and analyzing information – is at the heart of everything government does. The key to improving services is to understand how to increase the speed and agility of your knowledge management processes and workflows. Join us for smart ideas on how your agency can improve knowledge management, empower your team to be more productive, and do it all on a faster, more efficient timeline.

Click here to Watch now

 

How Can Data Help Fight America's Continuing Opioid Crisis?

More than 100,000 Americans died from drug overdoses between May 2020 and April 2021 — the most ever recorded in a single year — according to the Centers for Disease Control and Prevention. Most of the deaths were due to opioids. Nearly every state in the country has seen a rise in these overdose deaths. One exception? New Jersey, which is using a data-based approach to bring health and human services officials together with law enforcement agencies in the fight against this deadly epidemic. Listen to Juan Colon, a longtime Major in the New Jersey State Police and now the National Director of Opioids and Illegal Drug Solutions with SAS, as he shares his story about how New Jersey and other jurisdictions have seen success in using data analytics to combat the opioid crisis.

Click here to Watch now

 

Mastering the Balance: Identity Verification for Digital Equality and Fraud Prevention

Jordan Burris is the former chief of staff for the White House Office of the Federal CIO. Linda Miller served as the Deputy Executive Director of the federal Pandemic Response Accountability Committee (PRAC) from 2020-2021, and she led the development of a new framework for managing fraud risks while at the Government Accountability Office. Each of these two leaders is a national expert in fraud, risk and identity - both of them joined us for this virtual panel to discuss their top strategies and best practices. This webcast offers practical, actionable ideas for your organization to ensure that the right people are receiving access to the vital government services they need.

Click here to Watch now

 

The Middle-Mile Broadband Infrastructure Program: How your organization can tap into billions of dollars in broadband funding

Listen to officials from the National Telecommunications and Information Administration (NTIA) and the Oregon Fiber Partnership explore unprecedented opportunities to strengthen digital equity — including new middle-mile resources included in the Infrastructure Investment and Jobs Act. You'll learn how jurisdictions are using federal funds to expand broadband connectivity.

Click here to Watch now

 

To view upcoming and on-demand webinars, click on webinars.govtech.com.

For assistance with registration, contact:
Jeremy Smith, jsmith@erepublic.com (916) 932-1402 direct

 

Three individuals alleged to have schemed to steal unclaimed funds from New York State arrested

Pursuant to provisions of the Abandoned Property Law and related laws, the Office of the State Comptroller receives unclaimed monies and other property deemed abandoned. A list of the names and last known addresses of the entitled owners of this abandoned property is maintained by the office in accordance with Section 1401 of the Abandoned Property Law.*

New York State Comptroller Thomas P. DiNapoli, Damian Williams, the United States Attorney for the Southern District of New York and Daniel B. Brubaker, Postal Inspector in Charge, Postal Service Inspection Service, New York Division, announced the arrest of Bakare Doukoure, Sanneh Tunkara, and Lassana Sylla on mail fraud and identity theft charges arising out of their scheme to fraudulently obtain unclaimed funds held by the New York State Comptroller’s Office of Unclaimed Funds. Tunkara was arrested on July 19, 2022 and presented before the Hon. Andrew E. Krause, United States Magistrate Judge. Sylla surrendered upon learning of an outstanding arrest warrant and was presented before Judge Krause on July 20, 2022. On July 21, 2022, Doukoure also surrendered upon learning of an outstanding arrest warrant and was presented before Judge Krause.

New York State Comptroller Thomas P. DiNapoli said: “The defendants unconscionably stole people’s identities to submit claims for money that did not belong to them, stealing from those who had unclaimed funds held by the state. Thanks to the work of my investigations team, the United States Attorney’s Office for the Southern District of New York, the United States Postal Inspection Service and the New York City Housing Authority’s Office of Inspector General, they have been arrested and will be prosecuted to the full extent of the law.”** 

U.S. Attorney Damian Williams said: “As alleged in the Complaint, Bakare Doukoure, Sanneh Tunkara, and Lassana Sylla defrauded over 100 unsuspecting New York residents out of money to which they were entitled that was held in trust by the New York State Comptroller’s Office of Unclaimed Funds. My Office and our partners in law enforcement will not stand idly by when wrongdoers target government programs designed to protect the assets of the people of this State.”

USPIS Inspector-in-Charge of the New York Division Daniel B. Brubaker said: “The defendants thought no one was looking while they carried out their scheme to defraud the New York State Comptroller’s Office, and in an attempt to hide their crimes steal the identities of numerous victims. They gamed the system for over one hundred thousand dollars and tarnished the names of innocent people, all in the pursuit of their greed. However, Postal Inspectors and our law enforcement partners are ever vigilant when it comes to exposing fraudsters. We will commit every resource available to us in the fight against identity theft and fraud. Today’s arrests should also serve as a warning to anyone who uses the mail for illegal purposes: once Postal Inspectors are on the case, it’s game over for the bad guys.

According to the allegations in the Complaint filed yesterday and unsealed today:

New York State’s Abandoned Property Law requires banks and other financial institutions to transfer abandoned customer funds in their custody to the Office of Unclaimed Funds after a specified period of time. The Office of Unclaimed Funds maintains an online database in which anyone can search to see if the Office of Unclaimed Funds is holding any unclaimed funds in someone’s name.* The owner of the funds can recover the money from the Office of Unclaimed Funds by filing a claim and proving he or she is the rightful owner of the money by providing personal identifying information such as a Social Security number or an address.  New York State has approximately $17.5 billion in unclaimed money with more than 46 million account records remaining unclaimed. The Office of Unclaimed Funds returns over $1.5 million to individuals, companies, non-profit organizations, and municipalities daily.

An investigation by the State Comptroller’s Office initially discovered the identity theft and the fraud. State Comptroller investigators brought the matter to the federal authorities and worked jointly with the Postal Inspection Service and the United States Attorney’s Office to fully uncover the scheme.

From at least in or about June 2012 to in or about April 2018, Doukoure, Tunkara, and Sylla worked together in a fraudulent scheme in which they filed fraudulent claims with the Office of Unclaimed Funds for abandoned monies held in trust by the New York State Comptroller.  Bank records show that, during the relevant period, the Office of Unclaimed Funds issued approximately 170 checks made out to approximately 120 different payees that were deposited into approximately eight different bank accounts that were controlled by either Doukoure or Tunkara.

In connection with the scheme, bank accounts controlled by Doukoure and Tunkara were used to make purchases from online databases that collect public records on individuals, such as names, dates of birth, and addresses. Doukoure and Tunkara also used stolen identities to perpetrate their scheme, including fake driver’s licenses.

Doukoure, 54, of the Bronx, New York, has been charged with conspiracy to commit mail fraud, mail fraud, and two counts of aggravated identity theft, which carries a maximum sentence of 40 years in prison and a mandatory minimum sentence of 4 years in prison.  Tunkara, 38, of the Bronx, New York, has been charged with conspiracy to commit mail fraud, mail fraud and one count of aggravated identity theft, which carries a maximum sentence of 40 years in prison, and a mandatory minimum sentence of 2 years in prison.  Sylla, 47, of Philadelphia, Pennsylvania, has been charged with conspiracy to commit mail fraud and mail fraud, which carries a maximum sentence of 40 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of Postal Inspectors with the United States Postal Inspection Service, Investigators with the Office of the New York State Comptroller, and Investigators with the New York City Housing Authority’s Office of Inspector General. 

* Interested individuals and organizations may determine if their name appears on the Abandoned Property Listing by contacting the Office of Unclaimed Funds, Monday through Friday from 8:00 a.m. to 4:30 p.m., at: 1-800-221-9311 or visit Department of Audit and Controls' web site by clicking HERE. 

**N.B. The charges in the Complaint are merely accusations, and Doukoure, Tunkara and Sylla are presumed innocent unless and until proven guilty

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Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at https://www.osc.state.ny.us/investigations, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236.

The substantial evidence standard is used in administrative disciplinary hearings

In this appeal challenging an adverse disciplinary decision following an administrative hearing on the various allegations of misconduct and insubordination filed against the Petitioner pursuant to Civil Service Law §75, the Appellate Division found that the misconduct findings by the hearing officer were supported by substantial evidence.

Citing Matter of Wales v City of Saratoga Springs, 200 AD3d 1262, the court explained that substantial evidence is "a minimal standard that requires less than [a] preponderance of the evidence and demands only the existence of a rational basis in the record as a whole to support the findings upon which the determination is based."

Addressing the penalty imposed on the Petitioner, termination, the Appellate Division, considering Petitioner's nearly a 30-year career with the employer and her "positive personnel record," concluded that imposing the penalty of termination was not '"so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one's sense of fairness," citing Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222.

Click HEREto access the text of the Appellate Division's decision.

 

Seeking video footage recorded by a police officer's body-worn camera and attorney fees and litigation costs pursuant to New York State's Freedom of Information Law

Underlying this CPLR Article 78 action was a Petitioner's  Freedom of Information Law [FOIL] request for certain video footage recorded by a police officer's Body-Worn Camera [BWC]. The police department [Department] responded by providing Petitioner access to a video consisting of fully blurred images with the audio removed. The Department advised Petitioner that if a less redacted copy was requested, "the cost would need to be estimated and such fees would need to be paid in advance to obtain the more precisely redacted video."

As relevant to the issues on appeal, the Appellate Division opined that FOIL provides that "the court must assess against the agency involved the requesting party's reasonable attorney's fees and other litigation costs when the requesting party 'has substantially prevailed and the court finds that the agency had no reasonable basis for denying access.'"

Although the Department did not dispute that Petitioner "substantially prevailed" when the Department disclosed the records Petitioner sought in the FOIL request, it contended that it had a reasonable basis for denying Petitioner's FOIL request pursuant to its  prepayment redaction policy.

The Appellate Division held that Petitioner "has been subjected to the very kinds of unreasonable delays and denials of access which the counsel fee provision [contained in FOIL] seeks to deter" and that Petitioner is entitled to "reasonable attorney's fees and other litigation costs."

Click HERE to access the text of the Appellate Division's ruling.

[See also Matter of Maziarz v Western Regional Off-track Betting Corp., posted on the Internet HERE.]