Current through Register Vol. 46, No. 12, March 20, 2024
(a) Background and
intent. The purpose of this section is to implement Executive Order No. 38
(E.O. 38), issued by Governor Andrew Cuomo on January 18, 2012, by exercising
the authority of the Director of the Office of Victim Services to issue
regulations governing the use of state funds and state-authorized payments in
connection with providing program services to members of the public. E.O. 38
provides for a limit on administrative expenses and executive compensation of
providers of program services in order to meet the state's ongoing obligation
to ensure the proper use of taxpayer dollars and the most effective provision
of such services to the public. This section is meant to establish the minimum
expectations and requirements pursuant to E.O. 38. Any contractual agreements
or memoranda of understanding entered into with the office may provide for
additional expectations and requirements beyond those enumerated in this
section.
(b) Definitions. For
purposes of this section:
(1) Administrative
expenses are those expenses authorized and allowable pursuant to applicable
agency regulations, contracts or other rules that govern reimbursement with
State funds or State-authorized payments that are incurred in connection with
the covered provider's overall management and necessary overhead that cannot be
attributed directly to the provision of program services.
(i) Such expenses shall be limited to those
permitted by the Federal, Victims of Crime Act (VOCA, 42 USC chapter 112 and
related regulations) and shall include but are not limited to the following
expenses, if otherwise authorized and allowable pursuant to applicable agency
regulations, contracts or other rules that govern reimbursement with state
funds or state-authorized payments:
(a) that
portion of the salaries and benefits of staff performing administrative and
coordination functions that cannot be attributed to particular program
services, including but not limited to the executive director or chief
executive officer, financial officers such as the chief financial officer or
controller and accounting personnel, billing, claiming or accounts payable and
receivable personnel, human resources personnel, public relations personnel,
administrative office support personnel, and information technology personnel
where such expenses cannot be attributed directly to the provision of program
services;
(b) that portion of legal
expenses that cannot be attributed directly to the provision of program
services; and
(c) that portion of
expenses for office operations that cannot be attributed directly to the
provision of program services, including but not limited to telephones,
computer systems and networks, professional and organizational dues, licenses,
permits, subscriptions, publications, audit services, postage, office supplies,
conference expenses, publicity and annual reports, insurance premiums, interest
charges and equipment that is expensed (rather than depreciated) in cost
reports, where such expenses cannot be attributed directly to the provision of
program services.
(ii)
Administrative expenses shall not include:
(a)
capital expenses, including but not limited to non-personal service
expenditures for the purchase, development, installation, and maintenance of
real estate or other real property;
(b) property rental, mortgage or maintenance
expenses;
(c) taxes, payments in
lieu of taxes or assessments paid to any unit of government; or
(d) equipment rental, depreciation and
interest expenses, including expenditures for vehicles and fixed, major movable
and adaptive equipment that is expensed (rather than depreciated) in cost
reports; or
(e) expenses of an
amount greater than $10,000 that would otherwise be administrative, except that
they are either non-recurring (no more frequent than once every five years) or
not anticipated by a covered provider (e.g., litigation-related expenses). Such
expenses shall not be considered administrative expenses or program expenses
for purposes of this regulation; or
(f) that portion of the salaries and benefits
of staff performing policy development or research.
(2) Covered operating expenses
shall mean the sum of program services expenses and administrative expenses of
a covered provider as defined in this subdivision.
(3) Related organization shall have the same
meaning as the same term in Schedule R of the Internal Revenue Service's Form
990 except that for purposes of this regulation a related organization must
have received or be anticipated to receive State funds or State-authorized
payments from a covered provider during the reporting period.
(4) Covered executive is a compensated
director, trustee, managing partner, or officer whose salary and/or benefits,
in whole or in part, are considered administrative expenses as defined in
paragraph (1) of this subdivision, and any key employee whose salary and/or
benefits, in whole or in part, are administrative expenses and whose executive
compensation during the reporting period exceeded $199,000. For the purposes of
this definition, the terms director, trustee, officer, and key employee shall
have the same meaning as such terms in the Internal Revenue Service's
instructions accompanying Form 990, part VII. If the number of key employees
employed by the covered provider who meet this definition exceeds 10, then the
covered provider shall report only those 10 key employees whose executive
compensation is the greatest during the reporting period and no other key
employees shall be considered covered executives. Clinical and program
personnel in a hospital or other entity providing program services, including
but not limited to chairs of departments, heads of service, chief medical
officers, directors of nursing, or similar types of personnel fulfilling
administrative functions that are nevertheless directly attributable to and
comprise program services shall not be considered covered executives for
purposes of limiting the use of State funds or State-authorized payments to
compensate them. In the event that a covered provider pays a related
organization to perform administrative or program services, the covered
executives of the related organization shall also be considered covered
executives of the covered provider for purposes of reporting and compliance
with this section if more than 30 percent of such a covered executive's
compensation is derived from State funds or State-authorized payments received
from the covered provider. In such a circumstance, the related organization
shall not be subject to the limitations on the use of State funds or
State-authorized payments for administrative expenses in subdivision (c) of
this section solely as a result of having covered executives.
(5)
(i)
Covered provider shall mean a contractor, subcontractor, grantee or subgrantee
that:
(a) has received pursuant to contract
or other agreement with the office, or with another governmental entity,
including county and local governments, or an entity contracting on its behalf,
to render program services, State funds or State-authorized payments during the
covered reporting period and the year prior to the covered reporting period,
and in an average annual amount greater than $500,000 during those two years;
and
(b) at least 30 percent of
whose total, annual in-State revenues for the covered reporting period and for
the year prior to the covered reporting period were from State funds or
State-authorized payments. This percentage shall be calculated as a percentage
of the total annual revenues derived from and in connection with the provider's
activities within New York State, irrespective of whether the provider derives
additional revenues from activities in another state. The source of such
revenues shall include those from sources outside New York State if such
revenues were derived from or in connection with activities inside New York
State, including contributions by out-of-state individuals or entities for
in-State activities. Where applicable, a provider's method of calculating
in-State revenues for purposes of determining tax liability or in connection
with completion of its financial statements shall be deemed acceptable by the
office for the purpose of applying this paragraph.
(ii) For purposes of this section, the method
of accounting used by the contractor, subcontractor, grantee or subgrantee in
the preparation of its annual financial statements shall be used, except that a
contractor, subcontractor, grantee or subgrantee that otherwise reports to the
office using a different method of accounting shall use such method.
(iii) Covered provider shall not include:
(a) State, county, and local governmental
units in New York State, and tribal governments for the nine New York State
recognized nations, and any subdivisions or subsidiaries of the foregoing
entities;
(b) individuals or
entities providing child care services who are in receipt of child care
subsidies pursuant to title 5-C or section
410 of the Social Services Law, except that
such providers may be considered a covered provider if it also receives State
funds or State-authorized payments that are not child care subsidies pursuant
to title 5-C or section
410 of the Social Services Law and would
otherwise satisfy the criteria in this definition;
(c) individual professional(s), partnerships,
S-Corporations or other entities at least 75 percent of whose program services
paid for by State funds or State-authorized payments are provided by the
individual professional(s), by the partner(s), or by the owner(s) of the
corporation or entity, rather than by employees or independent contractors
employed or retained by the entity, as determined by the amounts obtained in
State funds or State-authorized payments for such program services;
(d) individuals or entities providing
primarily or exclusively products, rather than services, in exchange for State
funds or State-authorized payments, including but not limited to pharmacies and
medical equipment suppliers. For the purpose of applying this exception, the
percentage of revenues derived from products rather than from services shall be
used; or
(e) entities within the
same corporate family as a covered provider, including parent or subsidiary
corporations or entities, except where such a corporation or entity would
otherwise qualify as a covered provider but for the fact that it has received
its State funds or State-authorized payments from a covered provider rather
than directly from a governmental agency.
(iv) Covered reporting period shall mean the
provider's most recently completed annual reporting period, as defined herein,
commencing on or after July 1, 2013.
(6) Executive compensation shall include all
forms of cash and noncash payments or benefits given directly or indirectly to
a covered executive, including but not limited to salary and wages, bonuses,
dividends, distributions to a shareholder/partner from the current reporting
period's earnings where such distributions represent compensatory or guaranteed
payments or compensatory partnership profits allocation or compensatory
partnership equity interest for services rendered during such reporting period,
and other financial arrangements or transactions such as personal vehicles,
housing, below-market loans, payment of personal or family travel,
entertainment, and personal use of the organization's property, reportable on a
covered executive's W-2 or 1099 form, except that mandated benefits (e.g.,
Social Security, worker's compensation, unemployment insurance and short-term
disability insurance), and other benefits such as health and life insurance
premiums, and retirement and deferred compensation plan contributions that are
consistent with those provided to the covered provider's other employees shall
not be included in the calculation of executive compensation. For the purposes
of this definition, such benefits shall be considered consistent with those
provided to other employees where the intended value of the benefit is
substantially equal, even where the cost to the covered provider to provide
such a benefit may differ. With respect to employer contributions to retirement
and deferred compensation plans that are not consistent with those provided to
other employees, executive compensation shall be deemed to include only those
amounts contributed or accrued during the reporting period for the benefit or
intended benefit of the covered executive, even if not reported on the
executive's W-2 or 1099 for that reporting period (but not those amounts that
vested during such period but were contributed or accrued prior to the
period).
(7) Office shall mean the
Office of Victim Services.
(8)
(i) Program services are those services
rendered by a covered provider or its agent directly to and for the benefit of
members of the public (and not for the benefit or on behalf of the State or the
awarding agency) that are paid for in whole or in part by State funds or
State-authorized funds.
(ii)
Program services shall not include:
(a)
policy development or research; or
(b) staffing or other assistance to a State
agency or local unit of government in such agency's or government's provision
of services to members of the public.
(9) Program services expenses are those
expenses authorized and allowable pursuant to applicable agency regulations,
contracts or other rules that govern reimbursement with State funds or
State-authorized payments that are incurred by a covered provider or its agent
in direct connection with the provision of program services.
(i) Such expenses shall be limited to those
permitted by the Federal, Victims of Crime Act (VOCA, 42 USC chapter 112 and
related regulations) and shall include but are not limited to the following
expenses, if otherwise authorized and allowable pursuant to applicable agency
regulations, contracts or other rules that govern reimbursement with State
funds or State-authorized payments:
(a) that
portion of the salaries and benefits of staff providing particular program
services, including but not limited to, employees or contractors providing
direct care to clients and supervisory personnel and support personnel whose
work is attributable to a specific program in whole or in part and contributes
directly to the quality or scope of the program services provided;
(b) that portion of the salaries and benefits
of quality assurance and supervisory personnel whose work is attributable in
whole or in part to particular programs and contributes to the quality or scope
of the program services provided by other personnel and related
expenses;
(c) that portion of
expenses incurred in connection with and attributable to the provision of
particular program services, including but not limited to, travel costs to and
from client residences, direct care supplies, public outreach or education or
personnel training to facilitate program services delivery, information
technology and computer services and systems directly attributable to program
services, including but not limited to, electronic patient records systems to
facilitate improved patient care or computer systems used in program services
delivery or documentation of program services provided, quality assurance and
control expenses, and legal expenses necessary to accomplish particular program
service objectives; and
(d)
expenses related to services which permit for a victim or person related to a
victim to access information related to important dates and developments
relating to criminal proceedings at issue in a timely and efficient manner,
pursuant to 42 USC sec. 10603e.
(ii) Program services expenses shall not
include:
(a) capital expenses, including but
not limited to non-personal service expenditures for the purchase, development,
installation, and maintenance of real estate or other real property;
or
(b) taxes, payments in lieu of
taxes or assessments paid to any unit of government; or
(c) equipment rental, depreciation and
interest expenses, including but not limited to expenditures for vehicles and
fixed, major movable and adaptive equipment that is expensed (rather than
depreciated) in cost reports; or
(d) expenses of an amount greater than
$10,000 that would otherwise be administrative, except that they are either
non-recurring (no more frequent than once every five years) or not anticipated
by a covered provider (e.g., litigation-related expenses). Such expenses shall
not be considered administrative expenses or program expenses for purposes of
this regulation; or
(e) that
portion of the salaries and benefits of staff performing policy development or
research.
(10) Reporting period shall mean, at the
provider's option, the calendar year or, where applicable, the fiscal year used
by a provider. However, where a provider is required to file an annual cost
report with the State, reporting period shall mean the reporting period
applicable to said cost report.
(11)
(i)
State-authorized payments refer to those payments of funds that are not state
funds but which are distributed, or disbursed upon a New York State agency's
approval or by another governmental unit within New York State upon such
approval, including but not limited to the Federal and county portions of
Medicaid program payments approved by the State agency. The office shall
publish a list of government programs whose funds shall be considered
State-authorized payments prior to the effective date of this
regulation.
(ii) State-authorized
payments shall not include any payments solely for the following purposes:
(a) procurement contracts awarded on a lowest
price basis pursuant to section
163 of the State Finance Law;
(b) awards to State or local units of
government except to the extent such funds or payments are used by such
government unit to pay covered providers to provide program services through a
contract or other agreement;
(c)
capital expenses, including but not limited to non-personal service
expenditures for the purchase, development, installation, and maintenance of
real estate or other real property, or equipment;
(d) direct payments of State funds or
State-authorized payments, or provision of vouchers or other items of monetary
value that may be used to secure specific services selected by the individual,
or health insurance premiums including but not limited to New York State Health
Insurance Program (NYSHIP) premium payments, or Supplemental Security Income
(SSI) payments, to or on behalf of individual members of the public;
(e) wage or other salary subsidies paid to
employers to support the hiring or retention of their employees;
(f) awards to for-profit corporations or
other entities engaged exclusively in commercial or manufacturing activities
and not in the provision of program services;
(g) policy development or research;
or
(h) funds expressly intended to
pay exclusively for administrative expenses, including but not limited to
Community Service Program core contract funding for HIV/AIDS services
programs.
(12)
(i)
State funds are those funds appropriated by law in the annual State budget
pursuant to article VII, section 7 of the New York State Constitution. The
office shall publish a list of government programs whose funds shall be
considered State funds prior to the effective date of this
regulation.
(ii) State funds shall
not include any payments solely for the following purposes:
(a) procurement contracts awarded on a lowest
price basis pursuant to section
163 of the State Finance Law;
(b) awards to State or local units of
government except to the extent such funds or payments are used by such
government unit to pay covered providers to provide program services through a
contract or other agreement;
(c)
capital expenses, including but not limited to non-personal service
expenditures for the purchase, development, installation, and maintenance of
real estate or other real property, or equipment;
(d) direct payments of State funds or
State-authorized payments, or provision of vouchers or other items of monetary
value that may be used to secure specific services selected by the individual,
or health insurance premiums including but not limited to New York State Health
Insurance Program (NYSHIP) premium payments, or Supplemental Security Income
(SSI) payments, to or on behalf of individual members of the public;
(e) wage or salary subsidies paid to
employers to support the hiring or retention of their employees;
(f) awards to for-profit corporations or
other entities engaged exclusively in commercial or manufacturing activities
and not in the provision of program services;
(g) policy development or research;
or
(h) funds expressly intended to
pay exclusively for administrative expenses, including but not limited to
Community Service Program core contract funding for HIV/AIDS services
programs.
(c) Limits on administrative expenses.
(1) Limits on allowable administrative
expenses. No less than 75 percent of the covered operating expenses of a
covered provider paid for with State funds or State-authorized payments shall
be program services expenses rather than administrative expenses. This
percentage shall increase by five percent each year until it shall be no less
than 85 percent in 2015 and for each year thereafter. In determining whether an
expense is a program service expense or an administrative expense, a covered
provider may allocate a portion of the expense to each type if such allocation
is supported by the nature of the expense. Such allocation may include
allocation of portions of an employee's time and compensation to administrative
or program services. Commencing on July 1, 2013, the limits on allowable
administrative expenses pursuant to this section shall be effective and
applicable to each covered provider on the first day of each provider's
respective covered reporting period.
(2) Subcontractors, subgrantees and agents of
covered providers. The restriction on allowable administrative expenses in
paragraph (1) of this subdivision and the reporting requirements in subdivision
(h) of this section shall apply to subcontractors, subgrantees and agents of
covered providers if and to the extent that such a subcontractor, subgrantee or
agent has received State funds or State-authorized payments from the covered
provider to provide program or administrative services during the reporting
period and would otherwise meet the definition of a covered provider but for
the fact that it has received State funds or State-authorized payments from the
covered provider rather than directly from a governmental agency. A covered
provider shall incorporate into its agreement with such a subcontractor,
subgrantee or agent the terms of this section by reference to require and
facilitate compliance. Upon request, covered providers shall promptly report to
the funding or authorizing agency the identity of such subcontractors,
subgrantees and agents, along with any other information requested by that
agency or by the office or its designee. A covered provider shall not be held
responsible for a subcontractor's or agent's failure to comply with these
regulations.
(3) Covered providers
receiving State funds or State-authorized payments from county or local
government or from an entity contracting on its behalf. The office or its
designee, rather than the county or local unit of government or entity
contracting on behalf of such government, shall be responsible for obtaining
the necessary reporting from and compliance by such covered providers, and
shall issue guidance to affected county and local governments to set forth the
procedures by which the office or its designee shall do so.
(4) Covered providers with multiple sources
of State funds or State-authorized payments. If a covered provider receives
State funds or State-authorized payments from multiple sources, the provider's
compliance with the restriction on allowable administrative expenses in
paragraph (1) of this subdivision shall be determined based upon the total
amount of program services expenses and administrative expenses paid for by
such funding received from all of such sources. As set forth in subdivision (h)
of this section, the covered provider shall report all of such State funds and
State-authorized payments, and the expenses paid for by such funding, in the
form and at the time specified by the office or its designee.
(5) Other limits on administrative expenses.
If the contract, grant, or other agreement is subject to more stringent limits
on administrative expenses, whether through law or contract, such limits shall
control and shall not be affected by the less stringent limits imposed by this
section. However, the definition and interpretation of terms in this section
shall not be affected or limited by the definition or interpretation of terms
in other regulations or agreements.
(d) Limits on executive compensation.
(1) Limits on executive compensation. Except
if a covered provider has obtained a waiver pursuant to subdivision (e) of this
section, a covered provider as defined in this section shall not use State
funds or State-authorized payments for executive compensation given directly or
indirectly to a covered executive in an amount greater than $199,000 per annum,
provided, however, that the office shall review this figure annually to
determine whether adjustment is necessary based on appropriate factors and
subject to the approval of the Director of the Division of the Budget.
Commencing on July 1, 2013, the limits on executive compensation pursuant to
this section shall be effective and applicable to each covered provider on the
first day of each covered provider's respective covered reporting
period.
(2) INTENTIONALLY
OMMITTED.
(3) Program services
rendered by covered executives. The limit on executive compensation pursuant to
this section shall not be applied to limit reimbursement with State funds or
State-authorized payments for reasonable compensation paid to a covered
executive for program services, including but not limited to supervisory
services performed to facilitate the covered provider's program services,
rendered by the executive outside of his or her managerial or policy-making
duties. Documentation of such program services rendered shall be used by the
covered provider to determine that percentage, if any, of the covered
executive's compensation that is attributable to program services and that
compensation shall not be considered in the calculation of his or her executive
compensation. Such documentation shall be maintained and provided to the office
or its designee upon request. Clinical and program personnel in a hospital or
other entity providing program services, including but not limited to chairs of
departments, heads of service, chief medical officers, directors of nursing, or
similar types of personnel fulfilling administrative functions that are
nevertheless directly attributable to and comprise program services shall not
be considered covered executives for purposes of limiting the use of state
funds or state-authorized payments to compensate them.
(4) Covered providers with multiple sources
of State funds or State-authorized payments. If a covered provider receives
State funds or State-authorized payments from multiple sources, the provider's
compliance with the limits on executive compensation in paragraphs (1) and (2)
of this subdivision shall be determined based upon the total amount of such
funding received and the reimbursements received from all sources of State
funds or State-authorized payments. As set forth in subdivision (h) of this
section, the covered provider shall report all of Such state funds and
State-authorized payments in the form specified by the office or its
designee.
(5) Subcontractors,
subgrantees and agents of covered providers. The limits on executive
compensation in paragraphs (1) and (2) of this subdivision and the reporting
requirements required in subdivision (h) of this section shall apply to
subcontractors, subgrantees and agents of covered providers if and to the
extent that such a subcontractor, subgrantee or agent has received State funds
or State-authorized payments from the covered provider to provide program or
administrative services during the reporting period and would otherwise meet
the definition of a covered provider but for the fact that it has received
State funds or State-authorized payments from the covered provider rather than
directly from a governmental agency. A covered provider shall incorporate into
its agreement with such a subcontractor or agent the terms of this section by
reference to require and facilitate compliance. Upon request, covered providers
shall promptly report to the funding or authorizing agency the identity of such
subcontractors, subgrantees and agents, along with any other information
requested by that agency or by the office or its designee. A covered provider
shall not be held responsible for a subcontractor's or agent's failure to
comply with these regulations.
(6)
Covered providers receiving State funds or State-authorized payments from
county or local government or an entity contracting on its behalf. The office
or its designee, rather than the county or local unit of government or entity
contracting on behalf of such government, shall be responsible for obtaining
the necessary reporting from and compliance by such covered providers, and
shall issue guidance to affected county and local governments to set forth the
procedures by which the office or its designee shall do so.
(7) Other limits on executive compensation.
If the contract, grant, or other agreement is subject to more stringent limits
on executive compensation, whether through law or contract, such limits shall
control and shall not be affected by the less stringent limits imposed by this
section. However, the definition and interpretation of terms in this section
shall not be affected or limited by the definition or interpretation of terms
in other regulations or agreements.
(8) A covered provider's contract or other
agreement with a covered executive agreed to prior to July 1, 2012 shall not be
subject to the limits in this section during the term of the contract, except
that:
(i) covered providers must apply for a
waiver for any contracts or agreements with covered executives for executive
compensation that exceeds or otherwise fails to comply with these regulations
if such contracts or agreements extend beyond April 1, 2015; and
(ii) renewals of such contracts or agreements
after the completion of their term must comply with these
regulations.
(e) Waivers for limits on executive
compensation. The office or its designee and the Director of the Division of
the Budget may grant a waiver to the limits on executive compensation in
subdivision (d) of this section for the executive compensation for one or more
covered executives, or for one or more positions, during the reporting period
and, where appropriate, for a longer period upon a showing of good cause. To be
considered, an application for such a waiver must comply with this subdivision
in its entirety.
(1) The application must be
filed no later than concurrent with the timely submission of the covered
provider's EO No. 38 Disclosure Form required pursuant to subdivision (h) of
this section for the reporting period for which the waiver is requested. The
application shall be transmitted in the manner and form specified by the office
or its designee and the Director of the Division of the Budget - the office
shall consider untimely waiver applications where a reasonable cause for such
delay is shown.
(2) The following
factors, in addition to any other deemed relevant by the office or its designee
and the Director of the Division of the Budget, shall be considered in the
determination of whether to grant a waiver:
(i) the extent to which the executive
compensation that is the subject of the waiver is comparable to that given to
comparable executives in other providers of the same size and within the same
program service sector and the same or comparable geographic area;
(ii) the extent to which the covered provider
would be unable to provide the program services reimbursed with State funds or
State-authorized payments at the same levels of quality and availability
without obtaining reimbursement for executive compensation given to a covered
executive in excess of the limits in subdivision (d) of this section;
(iii) the nature, size, and complexity of the
covered provider's operations and the program services provided;
(iv) the provider's review and approval
process for the executive compensation that is the subject of the waiver,
including whether such process involved a review and approval by the board of
directors or other governing body (if such a board or body exists), whether
such review was conducted by at least two independent directors or independent
members of the governing body, whether such review included an assessment of
comparability data including a compensation survey, and contemporaneous
substantiation of the deliberation and decision to approve such executive
compensation;
(v) the
qualifications and experience possessed by or required for the covered
executive(s) or position(s), respectively; and
(vi) the provider's efforts, if any, to
secure executives with the same levels of experience, expertise, and skills for
the positions of covered executives at lower levels of compensation.
(3) A waiver to the limits set
forth in subdivision (d) of this section shall be granted only where a covered
provider has demonstrated good cause supporting such a waiver, and has provided
any documentation requested by the office or its designee or the Director of
the Division of the Budget to support such a waiver. Unless additional
information has been requested, but not received from the covered provider, a
decision on a timely submitted waiver application shall be provided no later
than 60 calendar days after submission of the application.
(4) If granted, a waiver to a covered
provider shall remain in effect for the period of time specified by the office
or its designee and the Director of the Division of the Budget for the covered
executive position(s) at issue, but shall be deemed revoked when:
(i) the executive compensation that is the
subject of the waiver increases by more than five percent in any calendar year;
or
(ii) upon notice provided at the
discretion of the office or its designee as a result of additional relevant
circumstances.
(5)
Unless already publicly available, information provided by a covered provider
to the office in connection with a waiver application regarding the limits on
executive compensation shall not be subject to public disclosure under the
State's Freedom of Information Law.
(f) Waivers for limit on reimbursement for
administrative expenses. The office or its designee and the Director of the
Division of the Budget may grant a waiver to obtain reimbursement for
administrative expenses incurred during the reporting period and thereafter in
excess of the limit set forth in subdivision (c) of this section upon a showing
of good cause. To be considered, an application for such a waiver must comply
with this subdivision in its entirety.
(1)
The application must be filed no later than concurrent with the timely
submission of the covered provider's EO No. 38 Disclosure Form for the period
for which the waiver is requested, as required pursuant to subdivision (h) of
this section. The office shall consider untimely waiver applications where a
reasonable cause for such delay is shown.
(2) The following factors, in addition to any
others deemed relevant by the office or its designee and the Director of the
Division of the Budget, shall be considered in the determination of whether to
grant a waiver:
(i) the extent to which the
administrative expenses that are the subject of the waiver are necessary or
avoidable;
(ii) evidence that a
failure to reimburse specific administrative expenses that are the subject of
the waiver would negatively affect the availability or quality of program
services in the covered provider's geographic area;
(iii) the nature, size, and complexity of the
covered provider's operations and the program services provided;
(iv) the provider's efforts, if any, to
monitor and control administrative expenses and to limit requests for
reimbursement for such costs; and
(v) the provider's efforts, if any, to find
other sources of funding to support its administrative expenses and the nature
and extent of such efforts and funding sources.
(3) A waiver to the limit set forth in
subdivision (c) of this section shall be granted only where a covered provider
has demonstrated good cause supporting such a waiver, and has provided any
documentation requested by the office or its designee or the Director of the
Division of the Budget to support such a waiver. Unless additional information
has been requested but not received from the covered provider, a decision on a
timely submitted waiver application shall be provided no later than 60 calendar
days after submission of the application.
(4) If granted, a waiver granted to a covered
provider shall remain in effect only for the reporting period, except that the
covered provider may request in its waiver application and the office or its
designee and the Director of the Division of the Budget may grant an extension
of the effective period of such waiver when the waiver is granted.
(5) Unless already publicly available,
information provided by a covered provider to the office in connection with a
waiver application regarding the limit on administration expenses shall not be
subject to public disclosure under the state's Freedom of Information
Law.
(g) Denial of
waiver request.
(1) If the office or its
designee or the Director of the Division of the Budget propose to deny a
request for waiver made pursuant to either subdivision (e) or (f) of this
section, the applicant shall be given written notice of the proposed denial,
stating the reason or reasons for such proposed denial. Such notice shall be
sent by certified mail and shall be a final determination to be effective 30
calendar days from the date of the notice, unless reconsideration is
requested.
(2) If the office or its
designee or the Director of the Division of the Budget provides a notice of
proposed denial, the applicant may request consideration of the proposed denial
by submitting a written request for reconsideration within 30 calendar days of
the date of the notice of proposed denial. Submission of a request for
reconsideration within 30 calendar days shall stay any action to deny an
applicant's request for a waiver, pending a decision regarding such request for
reconsideration, and shall stay any action to enter into a contract or other
agreement. Any vouchers submitted by the applicant for payment by the office
during which such reconsideration is pending may be considered incomplete at
the office's discretion.
(3) The
written request for reconsideration shall be signed by the owner(s) or chief
executive officer of the applicant, and shall include all information the
applicant wishes to be considered, including any written documentation that
would controvert the reason(s) for the denial or disclose that the denial was
based upon a mistake of fact.
(4)
If the applicant properly seeks reconsideration of the proposed denial, the
office or its designee or the Director of the Division of the Budget shall
review the proposed denial and shall issue a written determination after
reconsideration. The determination after reconsideration may affirm, revoke, or
modify the proposed denial. Such determination shall be a final
decision.
(h) Reporting
by covered providers.
(1) Beginning after the
effective date of this regulation, covered providers shall submit a completed
EO No. 38 Disclosure Form for each covered reporting period. Such form shall be
submitted no later than 180 calendar days following the covered reporting
period, unless otherwise authorized. Such form shall be submitted in the manner
and form specified by the office or its designee. Covered providers shall
further provide the information requested in that form, and any other
information requested, upon the request of the office or its designee at any
time during the term of or prior to the execution of any contract or agreement
with such provider.
(2) Covered
providers receiving State funds or State-authorized payments from county or
local government or from an entity contracting on behalf of such government
must report directly to the office as required by this section. The county or
local government shall advise such covered providers of their obligation to
report directly to the office under this section, but shall not be responsible
for receiving or forwarding such reports to the department.
(3) Failure to report. A covered provider's
failure to submit a completed EO No. 38 Disclosure Form, or to provide
additional or clarifying information at the request of the office or its
designee, may result in the termination or non-renewal of a contract or
agreement for State funds or State-authorized payments.
(i) Penalties.
(1) Notice of preliminary determination of
non-compliance. Whenever it is determined that a covered provider may not be in
compliance with the requirements of subdivisions (c) or (d) of this section and
has not obtained a waiver, the provider shall be notified in writing of the
basis for that determination. Such notice shall provide the covered provider
with an opportunity and a procedure to submit additional or clarifying
information within 30 calendar days of the provider's receipt of such notice to
demonstrate compliance with this section. Failure to submit additional or
clarifying information within the required time period shall result in the
determination of non-compliance becoming final.
(2) Corrective action period. If the
determination of non-compliance becomes final as set forth in paragraph (1) of
this subdivision or if the office or its designee determines, after reviewing
and considering any information submitted by the covered provider, that such
provider is not in compliance with the requirements of subdivisions (c) or (d)
of this section, the provider shall receive notice of such determination and a
notice to cure. Such notice shall allow the covered provider a period of not
less than six months to correct the violation(s) identified (the corrective
action period) prior to additional enforcement action or penalties being
imposed, and shall require that the covered provider submit within 30 calendar
days a corrective action plan (CAP) for approval by the office or its
designee.
(3) Corrective action
plan. Within 30 calendar days of receipt of the covered provider's CAP, the
office or its designee shall either approve such CAP or request clarification
or alterations. The covered provider shall make such alterations to the CAP as
may be reasonably required by the office or its designee. Once the CAP has been
approved and the covered provider notified, and unless otherwise provided in
the approved CAP, the covered provider shall have six months to complete the
CAP and comply with this section.
(4) Failure to cure. At the conclusion of the
period for implementation of an approved CAP, the office or its designee may
request information from the covered provider to determine whether the CAP has
been fully and properly completed. If it has been so completed, the matter
shall be considered closed and no further action on the part of the office or
the provider shall be required. If the office or its designee determines that
the CAP has not been fully and properly implemented within the designated
corrective action period, the office or its designee shall provide written
notice to the provider and may take one or more of the following actions,
taking into account the seriousness of the violations, the nature of the
provider's services, and the provider's efforts to correct the violations, if
any:
(i) at its sole discretion, modify the
CAP and/or extend the time for the provider to complete
implementation;
(ii) issue a final
determination of non-compliance, together with a notice of the sanctions which
the office seeks to impose. Such sanctions may include:
(a) redirection of State funds or
State-authorized payments to be used to provide program services, where
possible and consistent with Federal and State laws;
(b) suspension, modification, limitation, or
revocation of the provider's license(s) to operate program(s) for the delivery
of program services;
(c)
suspension, modification or termination of contracts or other agreements with
the covered provider; and
(d) any
other lawful actions or penalties deemed appropriate by the office or its
designee.
(5)
Opportunity for appeal. Within 30 calendar days of receipt of a final
determination of noncompliance and notice of proposed sanctions, a covered
provider may request an administrative appeal by submitting a written request
to the name and address set forth in the notice. The request must include a
detailed explanation of the legal and factual bases for the provider's
challenge to the determination and all documentation in support of the
provider's position. If a request for an administrative appeal is not made
within the required 30 calendar days, the determination of noncompliance shall
become final and the proposed sanction shall be imposed. Unless the office
seeks to impose a sanction for which an administrative hearing is otherwise
required by statute or regulation, the covered provider's appeal shall be
limited to an administrative review of the record. Following the review, the
covered provider shall be provided with a final written determination setting
forth the findings of fact and conclusions of law that support the
determination. If the provider is found to be non-compliant, the proposed
sanction may be imposed forthwith.