Awaiting, debating Cuomo's compensation abuse remedy

The Times Union gave an update on the Governor's Nonprofit Executive Compensation order:
Check NYCON too for info this issue.

In mid-January, Gov. Andrew Cuomo gave all his agencies stark orders to stop letting public dollars pump up excessive salaries of "providers of services" to the state. Within 90 days, Cuomo's commissioners were supposed to set up regulations that ban state funds from being used to pay executives of such entities more than $199,000 annually.

As the April 18 deadline to abide by the directive approaches, agencies have not promulgated anything one can read and don't seem ready to widely disclose a word, according to key agency officials.

Instead, the Cuomo administration has been trying to finesse the terms of the directive. It may privately divulge proposals soon that get to the point of Executive Order 38 while making it possible for some big partners of the state, such as New York City hospitals, to continue to pay seven-figure compensation packages to CEOs without facing consequences, according to some parties pursuing the matter.

Representatives of some affected nonprofits say Cuomo's staff has assured them that accommodations will be made; how that happens may be made clear as soon as this week. Cuomo's order would not only cap executive pay of providers that could be reimbursed with state money: He also ordered that at least 75 percent of state financial assistance or state-authorized payments be used for direct services and care rather than administrative costs. Agency commissioners are supposed to be able to use discretion to adjust the $199,000 figure annually based on "appropriate factors," subject to the approval of the director of the budget. The gubernatorial order states that if a contracting provider fails to satisfy the executive compensation and administrative spending caps, its relationship with the state could be severed.

Cuomo's aides have been looking at making the order stick only if a heavy percentage of a provider's overall revenues come from the state, perhaps 40 percent or more. Cuomo's press office declined to discuss how the regulations are developing. Agency officials say the regulations are in progress.

"The governor's office and agencies involved have been spending a tremendous amount of time on this," said James W. Lytle, a lawyer with Manatt, Phelps & Phillips, which represents several not-for-profit organizations. "There will be some briefing as early as (this) week on where they are in this process." Lytle and others said it was too bad that all service providers were coming under scrutiny because a few "bad apples" had abused guidelines such as the IRS' reasonable compensation standards for tax-exempt organizations. Several said the attorney general's office could keep track of compliance with such standards. A spokeswoman for Attorney General Eric Schneiderman had no comment.

New York has about 27,000 registered nonprofits; 22,000 have active state contracts.

Carl Marcellino, chairman of the Senate Committee on Investigations and Government Operations, said he'll introduce a bill dealing with the matter in a different way. His bill won't be a one-size-fits-all remedy and will allow employers to use the market, experience and other factors to set fair and reasonable compensation, using the IRS procedures. He said Senate Republicans wanted to resolve differences over the pay matter in legislation as part of the new budget deal, but they didn't win that argument.


Read more: http://www.timesunion.com/local/article/Awaiting-debating-Cuomo-s-compensation-abuse-3451555.php#ixzz1qtaPnHX2

Fraud Detection Training

DiNapoli Launches New Fraud Detection Training Initiative for Not-for-Profits

New York State Comptroller Thomas P. DiNapoli today announced a new training program for not-for-profit officials to help them prevent and detect fraud and protect taxpayer dollars.
"New York not-for-profits manage billions of dollars. They contract with the state and other local governments to provide crucial services to New York families," DiNapoli said. "This training course will strengthen their financial management practices and ability to detect and prevent fraud."

The program includes case studies of actual fraud uncovered by state auditors and simple fraud detection tools to assist not-for-profits of all sizes. Taught by state forensic auditors in DiNapoli's office, the program also provides a risk assessment model to help identify the most cost-effective ways to fight waste, fraud and abuse, and meets continuing professional education requirements for eligible accountants.

The first training will be held at the Long Island Center for Nonprofit Leadership at Adelphi University in Garden City on March 1 at 8:30 am. A seminar will also be held in Buffalo on March 16 at 8:30am at the Meals on Wheels Community Learning Center in conjunction with the United Way of Buffalo & Erie County. Additional sessions will be scheduled around the state.
"Bad things can happen to good organizations," said Ann Marie Thigpen, Executive Director of the Long Island Center for NFP Leadership. "It is critical to protect, as best we can, our organization's mission and integrity along with our stakeholders' trust. Thanks to the Comptroller's office, we now have a resource for learning how to ensure that systems and practices are in place to minimize the opportunity for those dishonest few who prey on the good work that we do."

DiNapoli's office is responsible for reviewing and auditing not-for-profit contracts awarded through state agencies. In 2009-2010, DiNapoli met with not-for-profit leaders throughout the state about challenges they were facing in light of the severe national recession. His office also looked at the economic impact of not-for-profits in the state and made recommendations for reforming and modernizing the contracts and payment process. This new training, developed in collaboration with not-for-profit organizations around the state, will help protect limited resources.

The original article can be found here:
 http://www.osc.state.ny.us/press/releases/feb12/022812a.htm

For more on the Comptroller's Fraud Detection & Prevention seminars click on the following:
http://osc.state.ny.us/reports/other/li_ctr_nonprofit_leadership.pdf
http://osc.state.ny.us/reports/other/united_way_buffalo.pdf

NY Planning Federation Conference April 15-17 in Saratoga Springs

From the NY Planning Federation
This year's conference offers several programs related to urban and/or downtown issues, each focusing on a different concern for municipal boards and professional planners. These include "Designing Urban Bikeways," "Multi-Generational Design in Community Planning," "Context Sensitive Design," "Developing a Viable Downtown" and "Public Health Considerations in Community Design."

We also have both introductory and advanced SEQR courses, as many of you requested. The advanced class will focus on the sometimes-confusing process of filling out the long form EIS, while the introductory session will cover SEQR basics.

Dates: Sunday April 15 to Tuesday April 17
Place: Saratoga Hilton Hotel & Conference Center, downtown Saratoga Springs
Programming: Begins at 4:30 pm Sunday with a mock open meetings hearing, then 8:30 am - 4:45 pm on Monday, Apr. 16 and 8:30 - Noon on Tuesday, Apr. 17.

A conference registration form is posted on our website (www.nypf.org)

Monday morning April 16th begins with an 8:30 am plenary session. We are excited that Robert Freeman, Executive Director of the New York State Committee on Open Government, and one of our most popular presenters, has agreed to be this year's keynote speaker. His topic will be "Reflections on Transparency," a term that he notes, "we hear far too frequently." Freeman's talk will discuss the evolution of the term, its meaning, and the likelihood of real transparency, "required, in fact, by law in New York." As with any of his lively sessions, comments and questions from the audience will be encouraged.

The plenary program kicks off two days of almost two dozen classes for all levels. In response to numerous requests from municipal boards, we are adding an entire track of introductory courses aimed at first-time planning board and/or ZBA members, as well as for those wanting to brush up on their basic knowledge. These sessions will be identified as "Introductory" in the conference program and so far include presentations on:


Area & Use Variances
Introduction to SEQR
Site Plan Review
Special Use Permits
Non-Conforming Uses
Rights & Responsibilities of Board Members
More experienced attendees will want to hear well-known Albany Law School attorney Patricia Salkin present sessions on Case Law Updates and Ethics.

Other speakers will discuss:
Advanced SEQR
Context-Sensitive Design
Updating the Comprehensive Plan
Zoning for a Viable Downtown
Natural Gas Drilling
Creating Bicycle-Friendly Communities
When Right is Blight
Conducting Meetings
Local Planning and Agriculture
Article X
and many more topics - including several "hot button" issues -- that are still in the works and will be announced shortly.

All sessions at the NYPF conference meet the New York State annual 4 hour training requirements for planning board and ZBA members; those attending the full conference will receive 8 credits during the three days, enough for two years' of certification. We are also applying to the APA to once again be a CM provider for professional planners.

If you are staying at the Hilton, please call 518 584 4000 and ask for the registration desk. Inform them that you are part of the New York Planning Federation conference. The room rate is $99.00 per person per night, exclusive of taxes and other charges. Note that parking is free to conference attendees. (Your hotel confirmation will include a parking charge which will be waived upon arrival.)


Feel free to contact either Lael Locke (llocke@nypf.org), Judy Breselor (jbreselor@nypf.org) or Anne Rounds (anne@nypf.org) at our office with any questions, suggestions or concerns. Our phone number is 518 512 5270.

A.G. SCHNEIDERMAN ANNOUNCES BOLD PLAN TO REVITALIZE AND REFORM NEW YORK’S NONPROFIT SECTOR

Attorney General Announces Nonprofit Report: Recommendations Guided by the Leadership Committee for Nonprofit Revitalization

New York State Attorney General Schneiderman unveiled a new plan on Thursday to reform and revitalize New York's nonprofit sector.

Announced before an audience of nonprofit and business leaders, the plan includes legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his office's commitment to policing fraud and abuse.

Acknowledging that organizations throughout New York State face historic financial and strategic challenges, the Attorney General's plan also includes several new partnerships with the business and academic communities to enhance nonprofit governance.

"New York is the proud home of the world's most dynamic and vibrant nonprofit sector, but for too long, our state's regulatory framework has placed unnecessary burdens on these essential organizations. This plan will unlock the full potential of our nonprofit community, and improve the lives of the countless New Yorkers they serve every day," said Attorney General Schneiderman. "In these difficult economic times, it is more important than ever to make New York a hospitable environment so nonprofits can continue to carry out their vital work. At the same time, we must maintain the public's trust by ensuring that nonprofits are governed effectively, and with meaningful oversight."

"NYCON applauds the Attorney General for his leadership in putting forth a positive agenda for reform of state and nonprofit relations," said Doug Sauer, NYCON CEO. "In the spirit of cooperation and partnership, we are hopeful that the AG, Comptroller, Governor and Legislature can work together to further shape and support the recommendations."

In 2011, Attorney General Schneiderman convened a Leadership Committee for Nonprofit Revitalization with 32 nonprofit leaders, including NYCON CEO Doug Sauer, to recommend proposals that would reduce regulatory burdens on nonprofits, while strengthening governance and accountability.

Today's legislative and reform initiatives are responsive to the committee's recommendations.

They include:
The Nonprofit Revitalization Act, to be proposed by the Attorney General;
"New York on BOARD" and;
"Directors U" designed to improve nonprofit governance

More Details & Full Report
http://www.ag.ny.gov/media_center/2012/feb/feb16a_12.html

State Arts Funding: Good News! There Isn’t That Much Bad News
Posted by Justin Knabb On February - 16 - 2012 on Americans for the Arts blog.


Justin Knabb
While state legislative sessions are just getting underway in the new year, perpetual campaigning for the election is no doubt leaving everyone already feeling cranky and cynical (or is that just me?).

But take heart, advocates! Despite the cornucopia of GOP candidate positions on public arts funding—ranging anywhere from mild tolerance to total abhorrence—President Obama just proposed an increase in NEA funding!

And on the state level, while some familiar faces are making waves, several states are receiving some great surprises and proposals for steady funding:

Connecticut
Last month, Connecticut’s Department of Economic and Community Development (DECD) announced the launch of a $3.1 million local-level creative placemaking initiative in July. Gov. Dannel Malloy’s FY13 budget recommends eliminating all direct art support and redirecting those funds to a statewide marketing campaign that would include tourism. The state’s budget office indicates that arts organizations will be able to compete for $14 million in funding with other programs in the DECD.

Florida
The state legislature is proposing an increase to Florida Division of Cultural Affairs Cultural and Museum Grants. These grants were appropriated $2 million for the current fiscal year, and for FY13 the House and Senate are currently recommending $3,025,000 and $5,050,000, respectively.

Kansas
After zeroing out the state arts commission last year, Governor Sam Brownback reversed his decision and proposed $200,000 for the upcoming fiscal year. However, these funds would be for a new Kansas Creative Industries Commission, a merger of the Kansas Arts Commission and the Kansas Film Commission, housed under the Department of Commerce.

Maryland
Governor Martin O’Malley is recommending level funding for the Maryland State Arts Council (MSCAC) in FY13. Funding for MSAC has remained steady at $13.3 million for several years.

Massachusetts
Another level funding proposal comes from Governor Deval Patrick. The governor’s FY 13 budget requests a $9.2 million appropriation for the Massachusetts Cultural Council. The agency is also requesting a $500,000 supplemental appropriation for a creative education initiative. The House will present its budget in April, with the Senate’s to follow in May.

Michigan
Additional arts funding could be coming to the state after Governor Rick Snyder recently recommended a threefold increase in funding for the Michigan Council for Arts and Cultural Affairs. The governor’s announcement comes on the heels of ArtServe Michigan’s release of the Creative State Michigan study that documents the multi-million dollar economic impact the arts have within the state.

Missouri
After receiving no general fund appropriations from the legislature last year, Governor Jay Nixon is proposing $600,000 for the state arts council. For several years, the council has had to rely on funding through its cultural trust fund, drawing it down significantly. Advocates are requesting $3 million from the legislature for the council.

Minnesota
Arts funding received a $2 million boost for the FY12-13 biennium thanks to a bump in Legacy Amendment funding, but future funding could be in jeopardy as the governor and legislature try to find a way to fund a new stadium for the Minnesota Vikings.

New Hampshire
An early House committee attempt to eliminate the Department of Cultural Resources (DCR) failed, much like last year’s. However, DCR funding must still pass the full House of Representatives, and the Senate. Also in play is an attempt to defund the state’s percent for art program. These measures will be voted on February 21.

Pennsylvania
Governor Tom Corbett is recommending just over $9 million for the state arts council, level with the current year’s funding. Last year, the council’s budget survived a House of Representatives amendment to strip 70% of its funding.

South Carolina
In her new budget, Governor Nikki Haley once again calls for eliminating funding to the South Carolina Arts Commission. The legislature overrode her veto of nearly $2 million in funding last year, and a similar battle could unfold over the next several months.

Nonprofits Push Back Against Limits On CEO Pay

Nonprofit groups pushed back during a hearing today in Albany on Gov. Andrew Cuomo’s proposals to combat excessive pay for top executives, saying the plans would do little to root out what they insist are rare cases of abuse.

Last month, the governor issued an executive order setting a $199,000 cap on state funding for executive salaries, while also requiring that 75 percent of state dollars are spent on actual services, not administrative costs. State agencies have three months to comply with the order.

The order came after a New York Times article last August, which detailed the story of two brothers who made close to a million dollars a year as top executives of a New York nonprofit for the developmentally disabled.

But at the hearing, James Lytle, a partner at Manatt, Phelps and Phillips, which represents more than a dozen nonprofit organizations, testified before the Senate Committee on Investigations and Government Operations that it made no sense to have a one-size-fits-all limitation — a cap he argued would hurt non-profit efforts to recruit qualified executives.

“No evidence has been advanced by anyone so far that would suggest that these abuses are either widespread or particularly unpunished when they have occurred,” Lytle said.

Nonprofit representatives acknowledged that some CEOs receive extravagant pay and benefits, but said the governor’s order wouldn’t change much, since the big players would use their influence to get waivers or shift pots of money around to minimize the impact.

Doug Saur, the CEO of the New York Council of Nonprofits, said that million-dollar executives wouldn’t see any changes because the state isn’t capping salaries, just how much state money can go into those salaries.

“That’s an accounting issue,” he said. “Who’s going to get hurt are the community action programs or some of the smaller organizations that don’t raise a lot of money, that are mostly government funded, and there are no alternative sources to go and do that.”

Those testifying from the non-profit world said that setting a specific limit on the state’s contribution to executive salaries fails to take into account the multiple factors that go into determining annual pay, from the size of an organization’s budget to the complexity of its structure, to comparable salaries for similar private sector jobs.

“None of the conversation today has been about performance,” Saur said.

Some lawmakers suggested other remedies to the abuses besides the Cuomo-imposed cap. Sen. Carl Marcellino, who chairs the Investigations Committee, said another solution was to demand greater accountability from the boards of nonprofit entities, which in some cases are made up of family members or appointees of the chief executive.

“It’s been my experience with a lot of these governing boards that a lot of the membership is appointed by the CEOs of the organizations themselves,” said Marcellino. “In many cases, they’re just rubber stamps.”

Link to article:

http://www.cityandstateny.com/nonprofits-push-limits-ceo-pay/

NYCON CEO Doug Sauer Testifies at Public Hearing on Executive Compensation at Not-for-Profits

Public Hearing: To examine executive compensation at not-for-profit organizations receiving State funding and the actions needed to prevent State tax dollars from being wasted on excessive salaries
Senate Standing Committee on Investigations and Government Operations
Chair: Senator Carl L. Marcellino

NY Council of Nonprofits CEO Doug Sauer shares feedback and testimony on the Governor's Executive Order addressing Executive Compensation for Not-for-Profits. You can hear Doug's comments beginning at 49:30. Watch for more from NYCON shortly. Interested in joining the NYCON mailing list? Subscribe here.