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NYS Gov. Orders Investigation Of Wages At Not-For-Profits

NYS Governor Andrew M. Cuomo today announced that he has created a new task force to investigate the executive and administrator compensation levels at not-for-profits that receive taxpayer support from the state. The task force will be led by the New York State Inspector General Ellen Biben, Secretary of State Cesar A. Perales, the Medicaid Inspector General Jim Cox, and the Superintendent of the Department of Financial Services Benjamin Lawsky.

“Not-for-profits that provide services to the poor and the needy have a special obligation to the taxpayers that support them. Executives at these not-for-profits should be using the taxpayer dollars they receive to help New Yorkers, not to line their own pockets. This task force will do a top-to-bottom review, not only to audit current compensation levels, but also to make recommendations for future rules to ensure taxpayer dollars are used to serve and support the people of this state, not pay for excessive salaries and compensation,” Governor Cuomo said.

Governor Cuomo continued, “There is a whole range of compensation levels and extremes that have existed for too long and must be reviewed. The use of taxpayer dollars must be scrutinized at every level.”

The Governor’s task force will determine the protocol and scope of the investigation in order to target the audit to focus on ensuring that state taxpayer dollars meant to help and protect New Yorkers, particularly the poor and indigent, are going to that purpose and are not being diverted to compensation. It will also provide recommendations for State agency policies and procedures that will ensure that taxpayer dollars are not being diverted to excessive compensation.

Commissioners from the Department of Health, the Office of Mental Health, and OPWDD will also serve on the task force.

The Governor’s action follows reports of startlingly excessive salaries and compensation packages for executives at not-for-profits that depended on state Medicaid funding through the Office of People With Developmental Disabilities (OPWDD) and other State agencies.

The State’s Medicaid Inspector General has the authority necessary to exclude providers from participation in the Medicaid program if it is found that they have engaged in fraudulent or abusive practices.

There are currently no state rules governing executive and administrative compensation for not-for-profits that receive state support.

According to the Department of the Budget’s January 2010 preliminary analysis of not-for-profit employees contracting with the mental hygiene agencies (Office of People With Developmental Disabilities, Office of Mental Health, and Office of Alcohol and Substance Abuse Services), there were approximately 1,926 employees with annual salaries greater than or equal to $100,000. The total value of their salaries was $324.6 million, with an average salary of $168,555.

(YWN Desk – NYC)

6 Responses

  1. If contractors are paid higher salaries than civil servants, the government would be wise to do the job themselves. Given that civil servants in “blue” states tend to be overpaid, it would be outrageous if contractors get higher pay. The whole idea of contracting out services is that the private sector should be able to pay lower wages and benefits.

    If any frum agencies are run by people living well off of tsadakah, there will be great anger at them and their fund raising will dry up as people prefer to support groups that do good work more efficiently.

  2. every non-profit has to file a tax return with exact expenses. Therefore it says on the tax return how much they are paying their employees.

  3. Not-for-profits are required to file IRS Form 990, which lists the compensation of key employees. There are websites on which you can search for these. There are many not-for-profits that pay exorbitant salaries.

    #2: How about looking at a salary survey? Health insurance limits payouts to “reasonable and customary” fees. Why not something similar? Of course, by calling it “govt intrusion” it’s clear you’re not simply asking a question. If the government is funding an organization, that organization opens itself up to some government oversight.

  4. When I observe those that work for and run so called not for profits running around monsey with their Suburban Denalis or Lincoln’s I would say there is a clear reason for an investigation.

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