New York State Comptroller DiNapoli releases municipal and school audits

New York State Comptroller Thomas P. DiNapoli announced the following municipal and school district audits were issued on July 28, 2023.

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

Town of Lake Luzerne – Procurement (Warren County)

The board did not enforce the provisions of the town’s procurement policy, and as a result, town officials did not seek competition when procuring goods and services totaling $561,829, or 48%, of the purchases reviewed. Because officials did not always comply with competitive bidding statutes and the town’s procurement policy, the board cannot ensure officials are procuring goods and services in the most prudent and economical manner.

 

Town of Lake Luzerne – Payroll (Warren County)

The supervisor did not ensure payroll payments were accurate or in accordance with town policies. Town officials did not properly review and certify payroll and 15 of 54 payroll registers reviewed were not certified. Officials also accepted incomplete time records for processing payroll and none of the 67 timecards reviewed contained all punches for time in/out. Additionally, inaccurately calculated overtime payments to hourly employees resulted in overpayments of $8,052 out of $47,192 overtime payments reviewed. Officials also did not always pay wages at board-approved rates, resulting in a $13,650 annual increase to the town’s payroll that the board did not approve.

 

City of Amsterdam – Recreation Department (Montgomery County)

The recreation director maintained limited and inadequate collection records and staff did not issue receipts for collections or maintain inventory records for the beverage events. As a result, there is a substantial risk that not all collections were remitted. For example: the total projected fees for the six-week summer camp program were $12,014; however, only $5,213 was collected; $4,303 was deposited from sales during the eight-hour Oktoberfest but officials did not maintain any support for the number of beverages sold;  for the $895 in cash that was remitted for the four-hour Craft Beer Fest the day of the event, officials could not support the number of tickets sold for the event; and auditors found $286 was remitted for the 10-hour Italiafest and wine tasting with no record of how many people attended the event.

 

Town of Johnsburg – North Creek Water District Charges (Warren County)

Town officials did not effectively manage the North Creek Water District's billing of water charges. This resulted in the town not billing for $8,461 (6%) of the water revenues it was entitled to. Officials did not ensure services provided by a contractor were billed to the customers or identify and bill all new water customers and ensure all water rates were board-adopted and accurately charged to customers.

 

Tuckahoe Union Free School District – Overtime (Westchester County)

District officials did not monitor overtime or ensure it was accurate. As a result, overtime payments increased the amount owed by a district, annually to the state, for its share of the cost of future employee retirement benefits. District officials did not adopt written policies and procedures for overtime and overpaid 15 employees a total of $4,432 for overtime due to lack of adequate review of time records and paid 15 employees overtime totaling $324,934 primarily for routine anticipated events.

 

Hannibal Fire Company – Misappropriation of Funds (Oswego County)

The board did not establish basic internal controls over cash disbursements. As a result, the former treasurer was able to misappropriate over $850,000 in company funds during an eight-and-a-half-year period. These improper disbursements went unnoticed for years because the board did not review bills paid by the former treasurer, receive written financial reports or review bank and investment statements and canceled check images. The board also did not obtain an annual independent audit of company records, as required.

 

Jericho Union Free School District – Acceptable Use Policy (Nassau County)

District officials did not help safeguard personal, private and sensitive information (PPSI) by developing and communicating a comprehensive acceptable use policy to business office staff. As a result, PPSI related to district employees and finances could be exposed. In addition to sensitive information technology weaknesses that were communicated confidentially to officials, auditors found that all nine business office employees, including the assistant superintendent for business affairs, were not aware that they were expected to follow the Computer Network and Internet Student Acceptable Use policy or what the district considers to be appropriate and inappropriate Internet use. District officials did not periodically review web histories to determine whether any employee’s web browsing was inappropriate.

 

Heuvelton Central School District – Procurement (St. Lawrence County)

District officials did not always comply with statutory requirements and the district’s procurement policy by seeking competition for the purchases of goods and services. As a result, they are unable to assure taxpayers that the district is procuring goods and services in the most prudent and economical manner. Officials could not support they used competition, as required, to make purchases totaling $189,497and did not seek competition when procuring professional services and insurance coverage from 10 vendors totaling $310,212. They also did not have written agreements with four of these vendors.

 

Son concealed mother’s death in order to continue receiving her retirement benefits

On July 28, 2023, New York State Comptroller Thomas P. DiNapoli also announced the guilty plea of Charles Alton Bump Jr. to two counts of felony theft for stealing $53,320 in payments from the New York State Common Retirement Fund and Social Security Administration (SSA) that were sent to his deceased mother, Elizabeth Dorothy Case. Bump concealed his mother’s death and continued collecting her retirement and SSA payments. He stole $28,679 from the state pension fund and $24,641 from the SSA. Bump was sentenced to eight years in prison minus time already served and three years supervised probation. He was also ordered to pay restitution.

“Mr. Bump’s conviction should serve as a warning to those who try to defraud the New York State Pension system: we will pursue those who attempt to steal from the system wherever they may live,” DiNapoli said. “My office will continue to work with law enforcement agencies across the country to protect the New York State pension. I’m grateful to the Social Security Administration Office of Inspector General for their partnership in seeing that justice was served.”

Elizabeth Dorothy Case was a New York State employee and resident of Jamaica, Queens, who moved to Maryland to live with her son, Bump. In 2019, a concerned neighbor reported to the SSA that Case, who was approximately 90 years old at the time, had not been seen in over a year. After repeated attempts to contact her, the SSA requested that she appear in person in order to continue receiving her payments. When her son appeared instead, the SSA questioned him. He stated that she was out of the country on an extended tour of Europe and only reachable by e-mail. Authorities confirmed, however, that Case had no passport and had never left the country. Bump eventually admitted to officials that his mother had died and he had disposed of her body.

Following the joint investigation of the State Comptroller's Office and the SSA Office of the Inspector General, Bump, 62, was prosecuted by the State’s Attorney’s Office in Somerset County Maryland. He pled guilty in the District Court for Somerset County, Criminal.

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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.

PURSUE A CAREER IN PUBLIC SERVICE AS AN ATTORNEY WITH THE STATE OF NEW YORK

NEW YORK STATE DEPARTMENT OF CIVIL SERVICE ANNOUNCES ONLINE CIVIL SERVICE EXAMINATION NOW AVAILABLE TO PURSUE PUBLIC SERVICE CAREERS AS ATTORNEYS
The New York State Department of Civil Service (DCS) has announced that individuals interested in a career as an attorney in New York State public service can now apply and complete the Legal Specialties exam online. The civil service exam is held continuously and is used to fill multiple attorney titles across New York State agencies.  Click Here for more information. Department of Civil Service Commissioner Timothy R. Hogues said, “The Department of Civil Service is pleased to offer the Legal Specialties exam online for the first time ever. This exam is used to fill a number of key attorney positions throughout the state. Under Governor Hochul's leadership, we are focused on building a diverse and inclusive workforce that can best serve all New Yorkers, and these entry level attorney positions represent an excellent opportunity to start a career in public service. Working for New York State not only offers the chance to serve the greater public, but also provides the opportunity to work with dedicated public servants, in addition to the great health benefits and compensation packages. I encourage all interested and qualified to apply for these exams today." New York State Department of Labor Commissioner Roberta Reardon said, “Taking the Legal Specialties civil service exam is a phenomenal way for legal professionals to begin their careers in public service. State workers have the opportunity to be part of the historic and nation-leading progress New York continues to make in almost every area. I encourage all eligible candidates to embrace this new opportunity and apply for the Legal Specialties civil service exam online.”  Department of Environmental Conservation Commissioner Basil Seggos said, “DEC’s Office of General Counsel serves a vital role in enforcing environmental laws and helping craft effective policies to protect New York’s natural resources and communities. The new online availability of the Legal Specialties exam provides a great opportunity for legal professionals to explore potential careers with state agencies, including DEC, and join our team on behalf of the public and the environment.” DMV Commissioner Mark J.F. Schroeder said, “A career in public service is so rewarding, and this is a great way for young lawyers to get their start, but whether you are just starting out, or you are a seasoned attorney, we have so many opportunities at DMV. Our attorneys and Administrative Law Judges play an important role in traffic safety, and we are always looking for talented professionals to join our team.  I encourage those who qualify to take the exam and I look forward to working with many of you in the future.” Office of Children and Family Services Acting Commissioner Suzanne Miles-Gustave said, “As an attorney myself, I can attest to how fulfilling and rewarding a legal career in public service can be, particularly when policies and initiatives can help shape the lives and well-being of children, families and vulnerable communities. We have so many legal professional opportunities at OCFS, all of which offer a chance to create truly meaningful, life-changing guidelines and programs. We are excited to welcome diverse and talented attorneys to be change-agents and make a significant mark towards providing equal, equitable and accessible services and supports.” Workers’ Compensation Board Chair Clarissa Rodriguez said, “There are many opportunities at the Board for rewarding positions in the legal field for those looking to make a difference. As an attorney, I am proud to lead an agency that is dedicated to protecting the rights of workers and employers by ensuring the proper delivery of benefits and promoting compliance with the law. If you are interested in serving the greater good while also growing your career, I highly encourage you to apply for the Legal Specialties exam and see what roles may be available for you.” People interested in being considered for attorney positions within state government must first meet the minimum qualifications for the exam, which requires candidates to be a graduate of an accredited law school with an LLB or JD degree or be eligible to take the New York State Bar exam. All applicants who meet the minimum qualifications should apply for and complete the exam to be considered for available positions. The online exam will require candidates to provide information about their training and experience with an online questionnaire that is completed and submitted by the candidate. Candidates should be prepared to provide detailed information on their education, work experience, dates of employment, and supervisor contact information to answer the questions completely. The exam is used to fill the following titles at multiple agencies: Senior Attorney Senior Attorney (Realty) Senior Attorney (Financial Services) Hearing Officer Motor Vehicle Referee/Motor Vehicle Referee (Spanish Language) Unemployment Insurance Referee/Unemployment Insurance Referee (Spanish Language) Several positions within the Legal Specialties Traineeship All positions include generous benefits including paid leave, health benefits, and retirement plans, and telecommuting options may be available to employees in these titles who meet certain criteria.   It is estimated that approximately 100 attorney positions will be filled statewide over the next year. Click Here to learn more about working for the State of New York and how to take the next step in pursuing a rewarding career in public service. As part of the launch of the Legal Specialties exam, New York State has launched a statewide social media campaign, which will include videos and web content to help attract candidates to apply for the exam. Campaign content and additional information and resources to help candidates complete the exam is available at www.cs.ny.gov/legal-specialties.

Governor Hochul announces ratification of 3-year labor agreement with the Public Employees Federation covering more than 51,000 New York State employees

On July 28, 2023, Governor Kathy Hochul today announced the ratification of a three-year labor agreement with the New York State Public Employees Federation (PEF), which includes over 51,000 New York State employees in a in a wide variety of professional, scientific and technical titles. The agreement, which runs until April 1, 2026, won the approval of 95 percent of PEF members who cast ballots. 

 

 "This contract fairly compensates the hard-working members of the Public Employees Federation who provide critical expertise to benefit New Yorkers each day," Governor Hochul said. "I’m grateful to President Spence for his partnership to help get this agreement finalized and to ensure that New York workers' pay and benefits reflect their important contributions to our state."

 

The ratified contract includes raises in each year of the agreement of 3 percent. In addition, the contract includes other increases in compensation such as a one-time lump sum bonus of $3,000 and up to 12 weeks of fully paid parental leave. The contract also includes changes in the health insurance program that will encourage in-network employee utilization and help control health insurance costs plus funding of labor-management initiatives and yearly salary increases and increases in location pay.

 

Public Employees Federation President Wayne Spence said "I’d like to thank Governor Hochul for the role she played helping PEF secure this contract. It rewards the professional members of our union with compensation increases, a signing bonus, and a first-of-its-kind Higher Education Differential, recognizing the advanced degrees and professional licenses required by PEF members to do their jobs. In addition, we hope the $400 annual dental stipend it includes will lead to a new dental plan that better serves PEF members statewide.”

 

A provision in an arbitration award cannot strip a federal district court of its subject matter jurisdiction

A United States District Court dismissed the petition submitted by a party in an arbitration [Plaintiff] seeking to confirm an arbitration award opining that it lacked of subject matter jurisdiction to consider the matter.

The district court had concluded that any confirmation action must be brought in the State courts of New Jersey or New York as the Arbitration Agreement Forum Selection Clause provided "The decree of the Arbitrators shall be enforceable in the courts in the State of New Jersey and/or New York." 

This, said the district court, required the Parties to submit themselves to the personal jurisdiction of the courts of the State of New Jersey and, or, New York for any action or proceeding to confirm or enforce a decree of the Arbitrators pursuant to NJSA 2A:24-1 et seq. and Article 75 of the New York Civil Practice Law and Rules."

Plaintiff appealed the District Court's ruling that the district court had been "deprived of subject matter jurisdiction" by a clause set out in the arbitration award.

The Circuit Court of Appeals, Second Circuit, agreed with Plaintiff, holding that:

1. The district court erred in dismissing Plaintiff's petition; and

2. Plaintiff adequately pleaded subject matter jurisdiction based on diversity of citizenship.

The Circuit Court explained "parties cannot contractually strip a district court of its subject matter jurisdiction." Accordingly, said the court, it was error for the district court to conclude that the forum selection clause in the arbitration award "did so."

Further, the Circuit Court said it interpreted the relevant forum selection clauses as permissive arrangements that merely allow "litigation in certain fora, rather than mandatory provisions that require litigation to occur only there."   

Accordingly, the forum selection clauses "did not bar proceedings from going forward in the United States District Court for the Southern District of New York" and vacated the district court's judgment of dismissal, remanding the matter to the district court for further proceedings.

Click HERE to access the Second Circuit Court of Appeals decision posted on the Internet.