Ill Health Uc Dept. Of Health Report

OFFICE OF THE COUNTY COMPTROLLER Internal Audit Division

Report 2009 – 009

Ulster County Department of Health Environmental Sanitation Division August 1, 1994 – June 11, 2009

Issued: November 20, 2009

Elliott Auerbach – County Comptroller The mission of the Ulster County Comptroller’s Office is to serve as an independent agency of the people and to protect the public by monitoring County government and to assess and report on the degree to which its operation is economical, efficient and its financial condition sound.

Table of Contents Transmittal Letter Introduction ♦ Engagement and Authority ♦ Background ♦ Objectives ♦ Scope and Methodology ♦ Report Standards ♦ Report Conclusions ♦ Acronyms/Definitions ♦ Report Format Analysis ♦ Ulster County ♦ Ulster County Legislature ♦ Health Services Committee of the Legislature ♦ County Administrator ♦ Ulster County Board of Health ♦ New York State Department of Health Administrative Findings ♦ Contents of Safe ♦ Files, Books and Records ♦ Technology ♦ Segregation of Duties and Nepotism Status of Applications and Permits Not Issued ♦ Food Service Permits ♦ Pool Permits ♦ Sanitary Sewer Disposal Permits ♦ New York State Department of Health Audit Payroll Time and Benefit Time Audit ♦ Submission and Review of Time Sheets ♦ Alternative Work Schedule “Flex Time” Approval ♦ Inappropriate Use of Benefit Time Accruals ♦ Overpayment of Compensatory and Overtime ♦ Vacation Time Buy-Back ♦ Benefited Unfairly Recommendations for Internal Controls ♦ Control Environment – Recommendations 1 - 4 ♦ Assessing and Managing Risk – Recommendations 5 & 6 ♦ Control Activities – Recommendations 7 - 10 ♦ Information/Communication – Recommendations 11 - 12 ♦ Monitoring – Recommendations 13 - 16 Post Script: Professional, Dedicated Staff Epilogue Appendices ♦ Photos of file room and office ♦ NYS Department of Health Audit – February 2009

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COUNTY OF ULSTER PO BOX 1800 KINGSTON, NEW YORK 12402 Office of the Comptroller

Elliott Auerbach

(845) 340-3525 (845) 340-3697

Comptroller

Robert Wenzel Deputy Comptroller

November 2009 Dear County Executive Hein, On June 19, 2009 you requested a comprehensive review of the Ulster County Department of Health. Since that time my staff has undertaken an enormous effort to research, evaluate and prepare this report. We found that the state of affairs at the Ulster County Department of Health is the quintessential argument for having achieved a charter form of government in Ulster County. This report is a study in the pitfalls and critical public consequences of inadequate and ineffective internal controls within government where the public good is to be paramount. One of my primary priorities is to identify areas where County departments and agencies can improve their operations and services, then present those findings in a manner that will not only assist County officials in making needed improvements but serve as a resource for other departments in their quest to ensure effective internal controls. The following is our report of the Ulster County Department of Health Environmental Sanitation Division. The report evaluates conditions identified against established standards and makes recommendations for improvement. If I can be of assistance to you, or if you have any questions concerning this report, please feel free to contact me. Respectfully submitted, Elliott Auerbach Elliott Auerbach Comptroller

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Engagement and Authority This report was undertaken upon special request of Ulster County Executive Michael P. Hein and was conducted pursuant to the authority vested in the Ulster County Comptroller as set forth in Article A9-2(A) and A9-2(G) of the Ulster County Administrative Code. Background The Ulster County Department of Health (UCDOH) was originally created in 1947 by the Ulster County Board of Supervisors. Currently, the UCDOH is the seventh largest department in the County with a 2009 annual operating budget of $7,110,772. Department revenue sources consist of state aid, grants, fees for services and general County property taxes. The six major divisions that make up the Health Department are: Administration, Medical Examiner, Nursing, Environmental Sanitation, Health Education, and WIC – Women, Infants & Children’s Nutrition Program. In total, there are approximately eighty-five employees assigned to the Health Department of which twenty-five work in the Environmental Sanitation Division (ESD). The nine operational areas of the ESD are: Neighbor Notification Laws, Radiological Health, Lyme Disease, Public Water Supply, Rabies, West Nile Disease, Community Sanitation and Food Protection, Environmental/Occupational Health, and Tobacco Law Enforcement. According to the 2008 UCDOH annual report issued to the County Executive’s Office on February 27, 2009, the following is a listing of the number of regulated businesses that the ESD is responsible for: 1 Agriculture Fairground 18 Camp Grounds 142 Federally Defined Community/Nontransient Non-community Water Systems 25 Food Vending Machines 36 Migrant Labor Camps 83 Mobile Home Parks 41 State Defined Community Water Systems 171 Swimming Pools 126 Temporary Residences

11 Bathing Beaches 57 Children Camps 311 Transient Non-community Water Systems 15 Institutional Food Service Facilities 26 Mobile Food Units 42 Non-public Water Systems 18 State Education Department sponsored Summer Feeding Programs 98 Temporary Food Service Permits 850 Food Service Establishments

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 Pre-Charter Prior to January 1, 2009 the government of Ulster County (County) was managed by the County Legislature (Legislature) and its 33 part-time legislators functioning through a committee structure and led by a legislative chairman. The Legislature had broad powers and authority as provided in the New York State Constitution and State laws. It held final administrative authority over most County departments and agencies. The Legislature created committees with specific areas of oversight and the chairman of the Legislature appointed individual legislators to committees and the chair of each committee. The Legislature charged the Health Services Committee (Resolution #5, January 2, 2008) to be “responsible for all matters involving public health and those areas of health under the jurisdiction of the UCDOH as well as all matters pertaining to the Golden Hill Health Care Center and the Mental Health Department.” The Legislature created the Office of the County Administrator (Local Law # 4 of 1980). As delineated in the law, “Without curtailing, diminishing or transferring the powers of any elected County official, the county administrator shall be responsible for the overall administration of the County government … and shall have all powers and perform all the duties necessarily implied or incidental thereto.”  Post-Charter On November 7, 2006, Ulster County voters approved a referendum to adopt a County charter. The Charter became effective on January 1, 2009. The County is now structured to have three elected branches of government. Broadly stated, the Legislature, is “the legislative, appropriating and policy-determining body of the County;” the Office of the County Executive is “responsible for the proper administration of all County affairs placed in the County Executive’s charge;” and the Office of the Comptroller serves as “the chief accounting and auditing office of the County.” The role of the Legislature’s Health Services Committee changed to a more narrowly constructed role to “set policy for and review contracts pertaining to all County functions involving Public Health…”  Ulster County Board of Health The UCBOH exists in accordance with Title I and Title III of NYS Public Health Law. Before the Charter, among other responsibilities, the UCBOH was charged to “(a) prescribe the duties and powers of the local health officer, who shall be its chief executive officer, (b) direct the local health officer in the performance of his duties…” Post the effective date of the Charter, the UCBOH “shall exercise all the powers and perform duties…as provided for under state law…except as otherwise provided in the

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Charter.“ Notably, among the exceptions, is the appointment of either the Commissioner of Health or Public Health Director by the “County Executive, in consultation with the UCBOH and with confirmation by the County Legislature.” Prior to the Charter, UCBOH members served for six-year terms and post 2009, members serve five-year terms. On June 11, 2009 County Executive Michael P. Hein placed on administrative leave the former director of the Health Department, Dean Palen and transferred his wife, Debra Palen from her position as administrative assistant/stenographer, serving as Dean Palen’s assistant, to a position in another department. In a letter dated June 19, 2009 to Comptroller Auerbach, Executive Hein stated that a small amount of cash and numerous uncashed checks totaling in excess of $32,000 together with permit applications were discovered in a locked safe. Executive Hein further requested Comptroller Auerbach “undertake a comprehensive audit and review of the Ulster County Department of Health as soon as possible.” A review was immediately undertaken. Objectives Our objectives were to: 

Determine the source and status of the permits and monies found in the safe behind Debra Palen’s desk.

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Determine if there were adequate controls in place over the UCDOH to insure compliance with public health laws, regulations and codes to protect public health and safety.

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Determine if the UCDOH Environment Sanitation Division (ESD) maintains current and timely permitting for regulated public health activities.

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Determine that receipts in the ESD were recorded, supported, deposited and reported timely and accurately.

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Undertake a comprehensive review of the UCDOH operation to determine if any fraud, waste or abuse had occurred in the department.

Scope and Methodology The scope of this report focuses largely on the ESD of the Ulster County Health Department. The Public Nursing Division and Medical Examiner’s Office were not included as part of our review. We quickly determined that a focused evaluation of the operational and technical aspects of the ESD was required. This report

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encompasses the period of August 1, 1994 through June 11, 2009 and it includes recommendations for effective and efficient department oversight in the future. Our research consisted of interviews with Dean and Debra Palen, County staff and elected officials, the UCBOH president as well as representatives of the New York State Department of Health. In addition, we reviewed books, records and files, both paper and electronic, found at the UCDOH offices. The files were in a state of disarray. Thus, our fieldwork consisted of a review of available records and a broad range of interviews. We physically reviewed all documents, files and paperwork in Dean Palen’s office and adjoining conference room as well as Debra Palen’s office area. After sorting through and reviewing the volumes of paperwork, we determined that the best course of action was for UCDOH staff to take possession of the paperwork for processing. The audit of Debra Palen’s personal payroll practices compares her records of her time and benefit accrual against the requirements set forth in County policy and in the Union contract. This included a process of scheduling the hours Debra Palen recorded of her own time worked, how she categorized and allocated her time, and the resultant payments made to her to ascertain if any variances existed. Each statement made in this report is supported by work papers which document interviews conducted, files reviewed, and analysis performed. Report Standards We conducted this evaluation in a manner designed to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the report’s objectives. We believe that the evidence obtained provides a reasonable basis for the findings and conclusions. Report Conclusions After examining the facts of this case, we can conclude that Ulster County residents did not sustain any known health and safety disasters as a result of the administrative practices within the UCDOH. The ineffective functioning of the Department, however, did pose unnecessary risks to public health and safety. These risks resulted from (1) the spousal relationship between the UCDOH director Dean Palen and his administrative assistant and wife, Debra Palen and (2) Dean Palen’s unilateral control behaviors. Dean Palen empowered and enabled his wife to have an inappropriate degree of authority and control relative to her position and he refused to delegate authority and responsibility consistent with an effective system of internal control and checks and balances.

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We also conclude that despite the behavior of the Palen’s, departmental staff did everything in their power to enforce the public health laws. The ability of the UCDOH to maintain the necessary level of functioning to protect our citizens is due to the commitment and professionalism of UCDOH staff. Inadequate and inappropriate internal controls within the UCDOH ESD have resulted in Debra Palen unfairly benefiting from manipulated payroll practices and in politicized permitting practices. Further, administrative practices obstructed the timely issuance of permits, neglected sanitary code violators, and created an unprofessional work environment. The findings in this report inevitably raise questions such as how various behaviors and activities were allowed to occur and why they were allowed to occur for so long. As detailed in this report, the evidence shows: (1) a County governance structure with virtually no functioning system of internal controls as related to the Department of Health; (2) a County where an appointed official was able to repeatedly and openly violate the public trust; and (3) a County where those who stepped forward to object to misconduct were discouraged and those with authority to act did little or acted ineffectively. The absence or failure of an internal control structure is the common thread among the findings detailed in this report. One might say each finding is a ‘symptom’ of the same ‘cause or problem.’ Finally, the findings detailed in this report demonstrate the intrinsic value of Ulster County’s new charter form of government where internal controls are built into the fundamental structure of the government. Our recommendations are largely focused on infusing a culture of internal control in the UCDOH and, by extension, to all County departments and agencies. Acronyms/Definitions Cardex (sic)

A manual file management system.

CSEA

New York State Civil Service Employees Association, Inc. Local 1000, AFSCME, AFL-CIO (Union representing Ulster County’s civil service workers)

County

Ulster County

eHIPS

Electronic Health Inspection and Permitting System supplied by NYSDOH

ESD

Environmental Sanitation Division (of the UCDOH)

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HSC

Health Services Committee of the Ulster County Legislature

Legislature

Ulster County Legislature

Legislator

A member of the Ulster County Legislature

SDWIS

State Drinking Water Information System

UCBOH

Ulster County Board of Health

UCDOH

Ulster County Department of Health sometimes referred to as the Ulster County Health Department

UCHD

Ulster County Health Department

NYSDOH

New York State Department of Health

Union

New York State Civil Service Employees Association, Inc. Local 1000, AFSCME, AFL-CIO (Union representing Ulster County’s civil service workers)

Report Format The balance of this report is set forth as follows: Analysis: This narrative analyzes the reasons why the conditions existed to enable the findings to occur. Findings: Each finding details facts about what happened including the actual practices in place to allow the finding to happen, the standards against which we evaluate the what happened, and a description of the significance or effect created when the finding and the standard are at variance or unequal. Recommendations: Are presented in the context of internal control standards consistent with the Comptroller’s commitment to fostering practices that protect County resources and ensure that ‘good’ things happen and ‘bad’ things don’t.

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ANALYSIS ♦ Ulster County ○ Ulster County Legislature ○ Health Services Committee of the Legislature ○ County Administrator ♦ Ulster County Board of Health ♦ New York State Department of Health The UCDOH is governed by three public bodies (1) the County of Ulster, (2) the UCBOH and (3) the New York State Department of Health. We found no continuity among the oversight entities or in management expectations for the Department. There were several activities and strategies employed by Mr. Palen to disassociate the UCDOH from each of the governance structures established in law. The ESD was micro-managed by Dean and Debra Palen and run as if it were their personal family business. Dean Palen used his personal attorney for departmental advice and guidance. Dean Palen signed all the Division’s checks. We found boxes, books and piles of employee grievances and numerous media reports. We found employee correspondence about adverse working conditions and the ill-effects on the department due to the marital relationship between Dean and Debra Palen including exclusive terms of employment enjoyed only by Debra Palen. We also found a voluminous NYSDOH audit of UCDOH operations and programs (annexed as Appendix B) which cited continued, on-going findings of previous audits that remained unresolved. The letters conveying this and other audits were addressed only to Dean Palen. Finding: Dean Palen, Director of the Ulster County Health Department was enabled to avoid any effective oversight and supervision of his performance by the three public bodies established to assure effective administration of his duties, compliance with applicable laws and regulations, and protection of the public’s health and safety. Significance: During our review we found there was a disconnect between Dean Palen’s day to day management of the Health Department and oversight by the County Legislature, County Board of Health and the NYS Department of Health. Issues and concerns were not timely addressed or in many instances not even known by the individuals empowered to supervise, analyze and/or report on Dean Palen’s performance as the Director of the UCDOH. Hence corrective action was never successfully achieved.

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 Ulster County o County Legislature For all but five months of Dean Palen’s 15-year term as Public Health Director the Ulster County Legislature governed County departments, agencies and programs. The Legislature enacts local laws and policies, sets the annual budget and, prior to 2009, administered County departments through the triad of the Legislative Chairman, the Legislature’s Health Services Committee, and the Office of the County Administrator. In the first five months of 2009, when the Ulster County Charter became effective, Mr. Palen was dually responsible to the County Executive and the Ulster County Board of Health. A legislative chairman is ascribed a number of duties in NYS County Law. In Ulster County many of those duties were delegated to the County administrator by Local Law #4 in 1980. In addition, Local Law #5 of 1980 detailed the functions, powers and duties of Legislative chairman including to “determine what officer shall perform a particular power or duty not clearly defined by law.” Interviews with both the current chairman and the former chairman produced differing perspectives. The former chairman, during whose term the balance of power in the Legislature changed from one party to the other, reported he was often distracted by the 16/17 party-line issues. He explained he would not get involved in the daily operations of the County and left that to the County administrator. The current chairman reported that he considered the UCDOH to be a major problem and it was one of the reasons he supported adoption of the Charter. He used his appointment authority to head the Health Services Committee with a legislator who understood the need to coordinate with the Board of Health to resolve the many longstanding issues. Both chairmen reported they were never provided any of the audits performed by the NYSDOH. A review of files found evidence of an active role by the Chairman in the 1999 and 2000 time frame to address persistent problem behaviors by the director of public health, Dean Palen and his wife, Debra Palen. o Health Services Committee of the County Legislature The County Health Services Committee is a standing committee established by the Legislature. Its specific powers and duties, prior to 2009, were “to be responsible for all matters involving Public Health and those areas under the jurisdiction of the Public Health Department…” Furthermore, prior to 2009, a member of the Committee was seated as a full member of the UCBOH. Through that member’s participation, the Legislature held a degree of authority and control as provided in Public Health Law to “prescribe the duties and powers” and “direct in the performance of his duties” the Director of

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Public Health. Not until mid-2008 was this authority and responsibility exercised as part of a process to hold Dean Palen accountable for his actions. In our interview with the current chairman of the Health Services Committee we were informed that Dean Palen was “grand at giving excuses and justifications” and would effectively dis-empower the committee by telling them that the Board of Health was involved in policy issues and the Health Services Committee’s role was limited to budgetary oversight. The committee chairman also stated that the committee was never provided any audit report by the NYSDOH. o County Administrator County administrators, in accordance with Local Law Number 4 of 1980, were delegated budgetary and financial duties and “to advise department heads and officers as well as to coordinate the activities of County Government to most effectively implement the directives of the Legislature.” Further, to “assure that the statutory and local laws and resolutions of the Legislature and the directions of County officers empowered to make the same are faithfully executed and to report to the Legislature any neglect of duty.” In our interview with the former County Administrator we were told that the role of administrator was to be the chief budget officer, “nothing more nothing less.” We were redirected to the legislature as it was “clearly defined and outlined that the legislature did that oversight.”  Ulster County Board of Health The Board of Health exists in accordance with NYS Public Health Law. It is empowered to enact regulations relating to the preservation of life and health (known as the Sanitary Code), to sit in judgment upon alleged violations of their orders and regulations, and to enforce their orders by resorting to official court action where necessary. It was reported that Board of Health members were considered ‘hand picked’ by Dean Palen including, at one time, his own personal physician. Minutes of UCBOH meetings evidence a narrow and repetitive focus of discussion on topics such as rabies, Lyme disease, sanitation and food service fines, and a report from the Nursing Division. Topics such as public health preparedness, early interventions, and health education were routinely ignored. The Board received no fiscal reports, did not discuss day-to-day operational matters, and NYS DOH audits were not provided to them. On July 8, 2009 we interviewed the President of the UCBOH. He explained he was surprised when first appointed to find that the meetings were so short and that very little of substance was discussed. He reported that Dean Palen ran the meetings, not the president of the board; there were no committees; there was no selection process for new members, nor was any orientation or training provided to members.

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He further reported that, beginning in July 2008 when he became president, the agenda included new and pressing public health issues specific to the NYC aqueduct leak in the Town of Wawarsing . The president of the UCBOH and the chairman of the Health Services Committee began, for the first time, to coordinate efforts to address shared concerns and to establish appropriate roles for each governing body in providing sorely needed oversight of the UCDOH, with limited results. On July 9, 2009, the County Executive removed this UCBOH president from his position as president and from his seat on the board.  New York State Department of Health NYS Public Health Law §201 enumerates an extensive list of functions, powers and duties, the first of which is to “supervise the work and activities of the local boards of health and health officers throughout the state, unless otherwise provided by law.” The NYSDOH maintains a variety of reporting and performance requirements with which counties must comply. The NYS Commissioner of Health is vested with broad authorities relative to oversight of the public health and its administration at the local level. The NYSDOH conducts quarterly evaluations of local health departments as well as annual audits of program reporting and compliance. In 2008 the NYSDOH conducted a comprehensive audit of the Ulster County Health Department. Appendix B of this report contains the February 2009 NYSDOH audit. We interviewed the Metropolitan Area Regional Office Director of the New York State Department of Health (NYS DOH) concerning the State’s dealing with the Ulster County Health Department’s ESDs compliance with state rules and regulations. In our interview with the regional director he noted a built-in lack of segregation of duties within the UCDOH ESD because Dean Palen served both as pubic health director (responsible for overall administration of the UCDOH) and as the director of environmental sanitation where he administered the day to day operations of the ESD. Consequently, as the regional director pointed out, there was no supervisor of environmental sanitation to be copied on the regular reports and audits prepared by the NYSDOH. Dean Palen was free to either share or not share documents and reports from the State with anyone else. The NYSDOH was concerned about the UCDOH not initiating formal enforcement action against noncompliant facilities, those operating without a permit in violation of the State Sanitary Code. According to Dean Palen, Debra Palen was responsible for preparing enforcement documentation (agreements and stipulations) but was too busy to do so. Another issue raised by NYSDOH was Dean and Debra Palen’s reluctance to using the State’s eHIPS technology. eHIPS was provided to the County by the NYS DOH in

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1999, yet the Palen’s insisted on using the manual Cardex system. We were told that the County did use the State’s SDWIS tracking and reporting system for water and engineering issues. The Regional Director also informed us that Dean was advised in advance that the NYS DOH would audit the County’s permitting system and that he should make it a priority to bring current outstanding matters noted in previous audits. Significance: When we compare the actual practices during Dean Palen’s term against the expectations set forth in state and local law we find that the effect of the pre-Charter lack of a centralized approach to supervision of the UCDOH provided a rich fodder for Dean Palen to play one entity off another as a means to avoid accountability. The fact there were three oversight bodies and one of them had three subcomponents created a condition whereby Dean Palen was able to avoid any oversight of performance or responsibility for his actions, and run the UCDOH as his own fiefdom.

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Administrative Findings    

Contents of Safe Files, Books and Records Technology Segregation of Duties and Nepotism

 Contents of Safe There is a safe with a combination lock located behind Debra Palen’s desk in her office which predates her tenure in the UCDOH. Once the Palen’s were removed and a locksmith opened the safe, one hundred fifty (150) permit applications, un-cashed checks totaling $32,000 and un-issued permits were found in the safe. The County Executive assigned a Deputy Commissioner of Finance to inventory of the contents of the safe and we have relied upon that inventory for this finding. The Deputy Commissioner of Finance: 1. Categorized each application/check as either current or stale dated. 2. Recorded on the inventory listing the stale dated items. 3. Gave the current items to the UCDOH staff to process (these items were not inventoried). Containers with cash, gas cards, postage stamps and other sundry items found in the safe were not inventoried at that time. On June 22, 2009 staff from the Comptroller’s office inventoried two metal tins containing cash in the safe. The tin identified as the ‘sunshine fund’ contained $13.38. The other tin contained $12.96 and was left from a former coffee club fund. Only Debra Palen knew the combination to the safe. She confirmed that she alone accessed the safe and only left the safe open when she was present. No one else was permitted access. Debra Palen explained she used the safe to house postage stamps, postcards, gas cards, coffee fund, sunshine fund, old rubber stamps, permits, money, returned checks to be finalized, uncashed checks, and unprocessed applications. Debra Palen processed all ESD applications and she used the safe to hold applications with questions or issues to be resolved. Debra Palen explained she found it easier to hold these applications and the checks for deposit until she was sure the applications were complete and the problems had been resolved. Debra Palen explained there were so many in the safe because she and Dean were focused on trying to bring current the many outstanding food service applications. As a result, the applications in the safe were neglected

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Standard: No one person should have complete control over any function in government or there is no control to prevent fraud or theft. The management and disposition of critical documents should be proscribed in policy and procedure. The delegation of authority to deal with critical documents is essential to checks and balances. Significance: As a result of the Palen’s unwillingness to delegate authority with regard to file management and permit issuance, critical documents were left unattended, permits were not issued, checks received were not cashed and the affected projects either operated without a permit or did not operate at all.  Files, Books and Record We found the files, books and records in Debra Palen’s office and in Dean Palen’s office and conference room in piles of disarray. Within the piles there were what appeared to be original files as well as photo copies of original documents. In the storage room boxes were piled in a manner that there was just enough room to walk part way into the storage room. Appendix A contains pictures taken by the Comptroller’s staff on June 22, 2009 of the storage room and of Dean Palen’s office. Items removed from the storage room by the Ulster County Clerk’s Records Management Office include: Number of Boxes/Files 11 boxes 16 boxes 18 boxes 3 boxes 1 Shoe Box 1 boxes 2 boxes 4 boxes 1 box 2 boxes 4 boxes 1 folder 1 folder 1 folder 1 folder 3 folders ½ box

Item Content Daily Time Sheets & Job Assignments Daily Time Sheets & Job Assignments Receipt Books for Monies Received Leave Request Forms Vehicle Mileage & Gas information Attendance Sheets & Benefit Time Accrual usage Reimbursement Records – Mileage & Meals Payroll Records Personnel Files Personnel Files Copies of Policy Manuals & Employee Benefit Manuals for County Employee Health Plans Benefit Time Tracking Records & Accrued Time Vacation Reports Floating Holiday Time Records Sick Leave Reports Newspaper clippings and Press Releases Publication and Printed items from Conferences

Period Covered 1979 – 2008 6/99 – 2/08 5/22/75 – 9/7/06 1978 – 2009 6/97 – 4/04 1999 – 2009 2/87 – 7/08 1992 – 5/23/09 1947 – 1990 1973 – 1993 & 2001 – 2008 1987, 1998 2001 & 2003 1968 – 1993 1981 – 1982 2/11/04 – 4/10/09 1976 – 1983 1971 – 1976 1932 – 1997

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In addition to the items above, volumes of aged records, damaged by dampness, are stored in out buildings behind the department’s administrative offices at 300 Flatbush Avenue. We did not inventory or use them during our review. The Ulster County Clerk’s Records Management Office was notified of the files stored in outbuildings as well as in other locations within the main building. Due to the records in the out-buildings being potentially contaminated, a grant will be sought to manage their disposition. Dean Palen told the Comptroller, with regard to records management, “the buck stops with him” but Debra had a major role and that she tended to save everything. Dean and Debra Palen restricted access by staff to most files. Among papers found in Dean Palen’s office were memos from staff identifying the inability to access case files as an obstacle to fulfilling their responsibilities. Debra Palen had unilateral control over all UCDOH ESD supplies. Standard: The books and records of a public agency are essential to the administration of local government. Public records contain information which allows government programs to function, provides officials with a basis for making decisions, and ensures continuity with past operations. Public records document the legal responsibility of government, protect the rights of citizens, and provide citizens with a means of monitoring government programs and measuring the performance of public officials. Such records need to be systematically managed to ensure ready access to vital information and to promote the efficient and economical operation of government. (Local Government Records Law § 57.13)

Significance: When standards are not complied with and personal preference is allowed to take precedence over legal and regulatory standards, the public purpose of governmental activities is overridden.  Technology NYS issued Ulster County an electronic health inspection and permitting system known as eHIPS. eHIPS enables local health departments to report critical data elements to the NYSDOH concerning the facilities regulated within their jurisdiction. Debra Palen used the computer to issue letters and permits for which templates existed. Dean Palen mainly used the computer for incoming e-mail. The manual Cardex system and typewriters were used. There are computers for use by professional staff.

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By all reports, Dean and Debra Palen were averse to using technology for most of the work in the department. Staff reported scheduling time when Debra Palen was not in the office to print out letters necessary to complete their assignments. Dean Palen instructed staff not to enter information into the New York State Electronic Health Inspection and Permitting System (eHIPS). When NYSDOH insisted on obtaining the necessary information staff would then be allowed, retroactively, to enter data into eHIPS. NOTE: During our examination the NYSDOH provided environmental sanitation staff with training on using the eHIPS system and the acting director of environmental sanitation informs us that the former Cardex system is being phased out and replaced with the automated eHIPS system. Standard: Public health data reporting is to be provided in a manner compatible to NYSDOH needs. eHIPS enables the NYSDOH to access the detailed entries for the purposes of monitoring the public health status of counties and to determine funding allocations from the State to the counties. Significance: The Palen’s failure to embrace technology contributed to the workload they allocated to themselves. It challenged staff’s efforts to function professionally and compromised Ulster County’s ability to collect fees and fines and to maximize funding allocations from the NYSDOH. More importantly it had the potential to adversely impact the health and welfare of Ulster County residents because immediate access to complete and comprehensive public health data can be crucial in a serious emergency.  Segregation of Duties and Nepotism Dean Palen was the public health director of the UCDOH and Debra Palen, his wife, was his administrative assistant/stenographer in the department’s ESD. The former director of the ESD, Allan Dumas, is a cousin of Dean Palen. After Allan Dumas left his position with Ulster County, Dean Palen eliminated the position of director of ESD. Proposed as a cost saving measure, Dean Palen effectively functioned as both the public health director and the environmental sanitation director. Debra Palen required that she receive all ESD mail unopened, she would then open and distribute the mail. No lists were maintained of mail received. All time sheets for ESD staff were submitted to Debra Palen for review and submission to the Department’s payroll clerk for processing. Debra Palen would only give verbal instructions to the payroll clerk regarding the time reports of staff. Debra

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Palen’s time sheets were not verified by an independent third-party. (see related comment – Payroll – Administrative Assistants Time Sheets). Payroll or personnel-related issues or questions could only be addressed through Debra Palen. Staff were specifically not permitted to seek the assistance of the Department’s payroll clerk. Only Debra Palen collected from field staff the fees they had collected for environmental sanitation applications and food cart inspections over a weekend. There was no third-party verification of receipts and deposits of permit fees collected in “the field.” No records were available to verify that the funds Debra Palen forwarded to the fiscal department for deposit were, in fact, the funds received. Monies collected by Debra Palen were never reconciled against bank statements or other records in the department. All checks returned for non-sufficient funds were given to Debra Palen and she would send collection letters to the payee. Debra Palen told us that she and Dean would often work late at night making calls to applicants attempting to collect monies owed. No outside audits or reviews to verify Debra Palen’s work were done nor were there any audits or reviews of the division’s cash management processes. Dean Palen rebuffed efforts by fiscal staff to review Debra’s financial work as a means to help her simplify the process with the use of technology. The fiscal staff worked successfully with the UCDOH Nursing Division on modernizing financial practices but could not do so in the ESD. In disallowing the changes for ESD, Dean Palen was reported to explain that Debra likes to do it her way and she works so hard and has so much to do. Debra Palen was enabled by her husband, public health director Dean Palen, to conduct herself in the role of a supervisor and was able to do whatever she wanted to do or not do. Debra Palen wielded a degree of authority and control substantially inconsistent with her position and job description. Staff interviewed stated that when they addressed their concerns to Dean Palen, instead of getting assistance with their issue(s), they received a lecture about how hard Debra Palen worked. A failure on multiple fronts to monitor and supervise Dean Palen enabled him to inappropriately empower his wife and effectively avoid any of the traditional segregation of duties essential to proper internal control. Operations in the UCDOH ESD were not sufficiently segregated to protect County resources and ensure compliance with regulatory standards.

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Standard: Employees in familial relationships ought not to work within the same department and division, especially in a supervisor/staff relationship. The standard of appropriate checks and balances between duties and responsibilities among staff is fundamental no matter whether or not a familial relationship exists. An effective system of internal controls should provide for the proper distribution of duties so that no one individual controls all phases of a transaction. For example, the same person handling cash should not also be responsible for maintaining the records or reconciling clients account activity. Even in those instances where it may not be feasible to completely segregate certain functions, compensating controls (such as supervisory oversight) can substantially limit the risk associated with having a single individual handle all facets of transactions. Significance: The marital relationship between Dean and Debra Palen created unequal working conditions between Debra other staff. The relationship was the source of many employee grievances and appeals to the Legislature and Board of Health. The situation fostered a contentious working environment within the UCDOH. The fact that Dean Palen made a priority the personal satisfaction he realized in signing permits and his failure to delegate authority for the permitting process resulted in a workload he was unable to fulfill. As a result, the efficacy of the public health management process was compromised. While there are no known public health crises as a result of Dean Palen’s actions, the dangers that might have befallen the public are unacceptable. The cumulative effects of the Palen’s administrative practices at the UCDOH were an established working environment rife with distrust, suspicion and fear, inappropriate cash management practices, and extensive inefficiencies in most matters of administration.

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Status of Applications and Unissued Permits    

Food Service Permits Pool Permits Sanitary Sewer Disposal Permits New York State Department of Health Audit

In addition to the previously noted finding of unprocessed permit applications and fees in the safe behind Debra Palen’s desk, we identified concerns with the permitting process on a variety of fronts. We detail here issues with food service, sanitary sewer disposal, and pool permits. In addition there was a November 2008 NYS DOH comprehensive audit of the UCDOH’s permitting process we reference. Dean Palen reserved to himself the sole authority to approve and sign all permits. While he was empowered to delegate permitting approval authority he chose not to because, in his words, signing permits was one of the joys of his life. Further, it was reported, Dean Palen sometimes issued permits to applicants that reviewing staff would not recommend for approval. Several people we interviewed heard Dean Palen say that his “P.E. (professional engineer) stands for political engineer.” We were also told that when legislators, lawyers and engineers called Dean Palen regarding a project it was moved “on top of other projects” and that “approvals were based on political aspirations” and “regulations were ignored for political purposes.” It was standard practice that any one of 33 County legislators could, and many would, call upon Dean Palen to facilitate projects of special interest or concern to them or their community. One legislator reported that he told Dean Palen he did not like the practice of having to call him to get action on a project before the UCDOH. It was reported that Dean Palen’s response was that the practice was a ‘win-win’ situation for all involved: The legislator now had a friend, Dean now had a friend in the legislator, and the project got done. It was common for applicants to call the UCDOH on numerous occasions inquiring as to the status of their application or permit. All such questions were forwarded to Debra Palen and/or Dean Palen for resolution. Files with issues needing to be addressed were held by Debra Palen until both she and Dean could find time together to resolve the issue. Debra Palen reported she kept a sheet of establishments for checking the progress of applications. It was a handwritten list of all program permits to monitor which she brought home with her. No one else monitored the status of applications or permits. When asked if she would tell staff of applicants not yet permitted, Debra Palen explained that she usually directed her questions to Dean.

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Dean Palen stated that during the several weeks prior to his removal from office, he and Debra had been working on “cleaning up” the status of old files that had outstanding issues, however, they were not able to complete that task.  Food Service Permits In the desk of Debra Palen we found fifteen food establishment permit files it appears were in process. Based only on the contents in these files, it appeared that certain food establishments had not been issued annual health department permits as far back as 2004. For instance:   



Three files for individual shops whose owner submitted applications on January 29, 2009 covering 2005 – 2009. All applications were issued receipts on January 30, 2009. Four establishment’s files contained original permits signed by Dean Palen during 2008 and/or 2009 indicating they were never sent to the business owner. Another file for a local festival contained a letter requesting that a permit be issued to cover all vendors who would be at the event. No copies of permit(s) were in the file nor was there any indication that payment was received. Two files for local eateries had applications for different years with names and addresses of different owners. We were told that these establishments were sold, however permit numbers and files were not changed.

Business permit numbers and files were assigned to the physical location of the business and not to the name and address of the owner. When a business was sold, but did not physically move, the new permit to the new owner would have the permit number used by the former business owner. Consequently, we were not always able to determine that an application was being filed by the correct current owner. Dean Palen told us that he was aware that at the point of his departure from the UCDOH there were one hundred seventy-nine (179) eating establishments as well as two summer camps without a current permit issued. Business owners are required as part of their application process to provide evidence of Workers’ Compensation insurance. Dean Palen explained this became a major obstacle for him in that he could not sign a permit without the insurance information and tracking down business owners for insurance documentation was time consuming for him. Dean and Debra Palen did most of the work following up on permits. Dean Palen explained he was not concerned that an establishment did not have the actual paper permit to display as he considered it a ministerial issue and he did not believe it posed any public health crisis. He said he was primarily concerned with

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biological issues and as long as no biological concerns turned up in the inspection and an application had been turned in the establishment was in compliance. An example, as shared by staff, was weekend inspections for temporary food service permits. UCDOH inspectors would have the vendor complete an application and pay the fee but not actually issue a permit to the vendor.  Pool Permits In the course of our interviews, we learned about a daycare center that has a pool that was constructed and installed without pre-approval by the UCDOH of its construction plans. It was issued an operating permit without a certification from a licensed professional that the daycare center’s pool was built to standard and in accordance with construction plans. Dean Palen signed and issued the operating permit. Inspection reports found in the file noted concerns about the pool drain. The Application for a [New] Permit to Operate was received by the UCDOH on July 18, 2006 for operation between July 19, 2006 through September 4, 2006. It was assigned a permit number and approved on October 5, 2007. The file did not contain the following items necessary for permit approval: 1. UCDOH pre-approval on professional construction plans for building the pool. The plans in the file were stamped “Received and approved 7.21.06 for the Ulster County Health Dept by Dean Palen, P.E., Director of Public Health” 2. Letter from a NYS licensed design professional certifying pool construction in accordance with approved plans. 3. A violation for the above 4. Pre-operational inspection 5. A letter from a NYS licensed design professional certifying the 7.25.06 inspection note “main drain grates changed as required by engineer.” 6. A memo reportedly written by a County Public Health Engineer addressing the potential danger to small children of the main drain. The “new” permit application dated 7/18/06 was approved with an effective date 07.19.06, an expiration date of 09.04.06 and was signed by an environmental health manager on 10.05.07. The first inspection report found in the file was also dated 7/18/06. It was identified as “routine inspection” and the following concerns were categorized as “#2 – All or parts of the item are in violation:”

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Pool bottom visible, Water quality: pool clarity, bottom/sides clean, water surface; Chemicals approved, proper storage/handling/labeling; Critical Item: Main drain grate not clearly visible at time of inspection. Pool must remain closed until reopened. Other Description: Keep chemicals in a secure area. Despite these findings, Dean Palen issued a permit for this pool to operate. On August 1, 2006 a UCDOH engineer, upon returning from vacation, issued a memo questioning the fact that the pool had been opened and was in public use. He followed up with the project design professional who said he had not had involvement in the project since the July 18, 2006 inspection. The County engineer specifically cited his concern that the main drain grate was not in compliance with State Sanitary Code velocity requirements. He recommended “the pool not be opened until an acceptable construction certification is received.” This memo was not found in the UCDOH file reviewed by the Comptroller’s Office but was found among the papers in Dean Palen’s office. In 2007 a new federal law was enacted, the Virginia Graeme Baker Pool and Spa Safety Act, establishing mandatory Federal requirements for suction entrapment avoidance in public swimming pools and spas. Given that the file documentation, or the lack thereof, supported the report made to us, we brought the matter to the attention of the County Executive’s office. Immediate actions was taken to direct the UCDOH to inspect for compliance. In August 2009 the pool was closed for the season as a result of that inspection.  Sanitary Sewer Disposal Permits We found four boxes of sanitary sewer disposal permit files. UCDOH staff evaluated the status of each file and determined the four boxes contained 172 sanitary sewer disposal permit files in various stages of completion. As of September 21, 2009 the disposition of these cases is: 

86 applicants were issued permits to build their sanitary sewer systems between August 29, 2009 and September 19, 2009



34 of the 86 sanitary sewer disposal systems were built and operational as far back as May 2003



The remaining files are currently under review to determine their status.

Staff explained that, based on their discussions with some of the independent engineers hired by the applicants and with various local building inspectors, these projects received a verbal authorization from either Dean Palen himself or in some instances from the UCDOH staff who inspected the particular sewer system. In other

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cases, we were also told that permits had been signed by her husband but Debra Palen had not yet issued the permits.  New York State Department of Health Audit A report issued on November 18, 2008 by The New York State Department of Health (NYSDOH) disclosed a broad range of issues both positive and negative, including those already highlighted in this report. The purpose of our discussing the NYSDOH report is to show that the issues being discussed have been ongoing for some time without resolution and to demonstrate that Dean Palen was fully aware of the recurring short comings within the UCDOH. The NYSDOH report consisted of eleven different reports and letters issued from March 13, 2007 through November 18, 2008 that identify issues within the UCDOH necessitating corrective action. Following are some of the findings:   

    

Operations in many program areas lack permits. Completed inspections in the files are inconsistent in citing violations for operating without a permit. When a facility is cited for operating without a permit, most files do not have documentation regarding follow-up to the violation such as a letter to the operator regarding operation without a permit and why a permit was not issued. Formal enforcement action for violating State Sanitary Code was not initiated against the majority of facilities operating without a permit. Many operations evaluated in the program review have been operating without a permit for several years without enforcement action or other followup despite the fact that subsequent inspections were conducted. A review of facility files does not explain why facilities do not have permits. Facility files do not contain copies of applications and letters or notes to facility operators regarding failure to apply for a permit or regarding incomplete applications. There is a Cardex system designed to track when an application is received in the office and payments received; however, it does not document when an application was returned to an operator or the reason a permit has not been issued.

We also found a July 18, 2002 letter from the NYSDOH discussing the lack of enforcement on the part of UCDOH regarding the Public Water Supply Program; Adolescent Tobacco Use Prevention Act Program (ATUPA) and the Food Service Establishment Program Enforcement. With regard to the public water supply program the letter stated the following: “From January 1, 2002 through May 28, 2002, the county entered 250 violations (not including Operations Reports violations) for 171 water supplies into SDWIS. Despite directions by this Department and

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training on several occasions since January 2002, the county has not entered the appropriate follow-up enforcement actions (Notice of Violation and notification requirements) into SDWIS for these 250 violations as instructed. Moreover, there is no “closure” reported for any of these 250 violations (i.e., there is no indication that even one of these waster supplies have returned to compliance). In summary, while the UCHD has consistently reported violations of Part 5, it has been reluctant to initiate formal enforcement, except when pushed by this Department. Rather than initiate enforcement, UCHD has often collected the missing samples itself and had them analyzed by either the county or state, often only after “exceptions” status had been achieved.” The NYSDOH conducted an audit of the Ulster County Health Departments food service establishment’s program-enforcement on May 15, 2002 and June 4, 2002 and found the following issues: 1. Files were incomplete. Formal enforcement records were kept in separate files that was not disclosed to the NYSDOH auditors until the June 4th visit and only after follow-up questions were asked. NYSDOH’s letter stressed the fact that since this was the purpose of the audit, the fact of separate files were being kept should have been disclosed and more importantly, these files should have been made available. 2. Penalties, if assessed at all were low. Consistently poor code compliance history was disregarded if the establishment was found in compliance. It was noted that there was an appearance of no incentive for establishments to take corrective action until at least two inspections showed repeated violations. And even then, the only penalty imposed was for the establishment to come in for an office conference. And even if the establishment agreed to not repeat the violation, the office conference could be avoided. 3. In certain instances, public heath standards were not being followed. No enforcement was taken against an establishment for repeated failure to chlorinate its water supply; another establishment was cited for not correcting the same violation of sewage back-up contaminating the kitchen and although it was closed during these incidences, subsequent formal or informal hearings were not held; a public school district’s high school was consistently found to have failed inspections and again no enforcement action was taken; while a fourth establishment which failed to appear for a formal hearing, the only action taken by the UCHD was to schedule another inspection which was done on January 15, 2002 with a formal hearing still pending as of June 4, 2002. 4. One to three months routinely lapsed between the time the inspection staff requested a hearing and the actual issuance of the notice of the hearing.

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The NYSDOH letter summarized its findings with: “All three audits have indentified a general lack of timely enforcement of the Public Health Law and State Sanitary Code.” The letter concluded that future state aid eligibility was contingent upon the UCHD enforcement protocol being approved by the NYSDOH. Along with the NYSDOH July 18, 2008 letter, we found the UCDOH response letter dated August 19, 2002 detailing what corrective actions the County Health Department would take. A common finding among the many in the NYSDOH reports over the years is the state of ‘housekeeping’ within the UCDOH. There has been inconsistent use of electronic reporting systems such as eHIPS and SDWIS. Dean Palen did not delegate any authority for permit approvals. He told us it was one of the great joys of his life to personally sign permits. Dean Palen politicized the permitting process through his practice of advancing projects championed by people with positions of real or perceived authority or power. The actions of Dean Palen in the pool example were improper and a misuse of his authority. A prudent person would not consider his actions a reasonable and necessary business practice. These examples demonstrate that there appeared to be a general disregard for following the State’s Public Health Codes which may have put the public at risk. Standard: The UCDOH is responsible to implement and enforce New York State’s Public Health Laws and regulations and Ulster County’s 1980 Sanitary Code. The standards for program administration and oversight are detailed in the evaluation instruments used by the NYSDOH and they can found in Appendix B. A properly designed reporting system is vital for management and staff to readily ascertain correct and current data on water systems, sanitary systems, food service establishments and more. A properly managed permit reporting system will alert management about the status of permits and actions necessary to insure applicant compliance. Standards exist for a reason and should be applied equitably.

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Significance: Permits are issued for a variety of reasons, one of which is to allow the consumer to discern vendors who have passed inspection and are therefore safe to purchase consumables from. When the UCDOH does not issue permits it abrogates the public’s right to know which vendors have passed inspection and which have not. Each time Dean Palen used his P.E. to be a “political engineer” and approved or enabled projects that did not comply with regulations he had the potential to adversely affect public health and safety. Because the NYS DOH did not take the compensatory action, due to their concern about the lack of segregation of duties and adequate oversight of the ESD, to send copies of their reports to the County administrator or chairman, they contributed to Dean Palen’s persistent avoidance of responsibility. By failing to maintain the eHIPS reporting, ready access to full, complete and up-todate public health data on Ulster County was not available. Had it been needed in a public health emergency, the public’s health could be in jeopardy. Not issuing permits timely could subject an applicant to unnecessary financial hardships such as lost mortgage commitments or increased costs due to delayed construction.

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Payroll Time Sheets and Benefit Time Usage Audit      

Submission and Review of Time Sheets Alternative Work Schedule “Flex Time” Approval Inappropriate Use of Benefit Time Accruals Overpayment of Compensatory and Overtime Vacation Time Buy Back Benefited Unfairly

Based on our analysis of time records, Debra Palen received additional compensation aggregating $23,774 during the period January 2007 through June 2009 which we found benefited her unfairly. Our review of payroll documentation reveals that Debra Palen manipulated her time and attendance records and, as a result, was paid for compensatory time, overtime and vacation buy back in a manner that other employees in her department did not have the benefit of enjoying. Debra Palen worked in the ESD of the UCDOH in a clerical civil service position as an administrative assistant/stenographer. According to the collective bargaining agreement between the New York State Civil Service Employees Association, Inc Local 1000, AFSCME, AFL-CIO (Union) and Ulster County, the work hours for clerical staff are 9:00 AM – 5:00 PM Monday through Friday totaling 35 hours. Ulster County provides Union staff benefit time such as vacation, sick, personal and floating holidays to give employees a break from their daily work routine or allow employees to address personal issues that cannot be taken care of outside of the normal work hours. Using benefit time as a means to generate additional compensation in the form of compensatory time or overtime is an abuse of this arrangement. Ulster County’s “Alternative Work Schedules Policy” was originally adopted February 9, 1989 and can be found on the County’s intranet under ‘Standard Operating Procedures’ along with form ADM-D-1010. It is the policy of Ulster County to permit the development of alternative work schedules in County departments with the approval of the department head and County Administrator (sic). The policy recognizes the changing dynamics of work and family life for both single parents and dual income families and the conflict in obligations between required work hours and family needs. The policy identifies flex schedules as a means to increase morale, improve productivity, reduce overtime and create real dollar savings for County tax payers. Nowhere does this policy allow employees to schedule work hours in a manner that creates additional compensation. It is likely that because Dean Palen, Director of Public Health and Director of Environmental Sanitation at the UCDOH and was also Debra Palen’s husband, the familial relationship had the effect of exempting Debra Palen from the contractual and standard operating procedures required of other employee.

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Payment to Debra Palen of her unused vacation days did not require the necessary supervisor or department head approval. As a result of the husband/wife/supervisor/employee relationship there was no incentive for Debra Palen to record her time under the same standard as her peers in the Union and then be paid additional wages for her vacation days. We did not find nor were we provided any written approvals for Debra Palen’s carry over of five days each year. Disclosure of the payments to Debra Palen for compensatory time, overtime, vacation and sick time buy back in 2007, 2008 and through the last day she worked for the County in June 2009 is represented in the following schedule. Payment Compensatory time Overtime Vacation Buy Back Sick Buy Back

2007

2008

2009

Totals

$4,914.18 $1,388.80 $2,991.24 $1,661.80 $10,956.02

$5,148.78 $1,506.15 $3,071.88 $1,706.60 $11,433.41

$3,346.22 $1,406.95 $0.00 $0.00 $4,753.17

$13,409.18 $4,301.90 $6,063.12 $3,368.40 $27,142.60

Our analysis of each of these payment types is provided in the following sections:  Submission and Review of Time Sheets o UCDOH staff, except in the ESD, turn in bi-weekly time sheets to the UCDOH payroll clerk who enters the time worked into the County’s payroll system. o ESD staff turned in time sheets to Debra Palen. o Debra Palen would then verbally instruct the UCDOH payroll clerk what to enter for each employee, including herself. o The Division’s time sheets were not reviewed or approved by anyone other than Debra Palen, including her own. o Dean Palen signed the payroll register. o Different from other staff, Debra Palen maintained monthly time sheets and would submit her compensatory time and overtime sometimes three or four months after the time was worked as shown in the following schedule:

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Month Earned

Comp Hours

Overtime Hours

Date Paid

Jan 07 Feb 07 Mar 07 Apr 07 May 07 June 07 July 07 Aug 07 Sept 07 Oct – Nov 07 Dec 07 Jan 08 Feb 08 Mar 08 Apr 08 May 08 June 08 July 08 Aug 08 Sept 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09

23.50 20.00 19.00 20.00 19.50 15.00 21.00 18.50 2.50 22.50 12.00 17.50 19.00 20.50 20.00 18.50 23.00 21.50 15.00 12.00 18.00 16.00 20.50 19.50 20.00 24.50 18.50 29.00

5.00

5/4/07 5/18/07 6/15/07 6/29/07 8/24/07 9/21/07 11/2/07 11/30/07 12/14/07 12/28/07 1/11/08 4/18/08 5/2/08 5/16/08 6/27/08 8/8/08 9/5/08 9/19/08 10/3/08 10/31/08 12/12/08 12/26/08 1/23/09 5/1/09 5/15/09 5/29/09 6/12/09 6/26/09



2.50 14.50 8.00 2.00 2.00 1.00 1.00 1.50 5.00 1.50 1.50 6.00 5.00 2.00 4.00 1.00 8.50 3.00 5.00 9.50 5.50 2.00 1.50

The division’s payroll registers were signed by Dean Palen.

Because Deb Palen did not submit her compensatory and overtime hours on a biweekly basis, we could not determine that the hours paid were actually worked. Although UCDOH staff stated that both Dean and Debra Palen would often work late, no records were maintained to document time actually worked. We note that the UCDOH building at 300 Flatbush Avenue has a security system which required employees to swipe their identification badges to enter the building at times other than 9:00 AM – 5:00 PM. We requested to see reports on who entered the building outside of normal working hours for the period covering 2007 through June 2009. According to the County Safety Office, the outside vendor who manages the security system did not have the recording and reporting feature of the system active. As a result, they could only tell us who entered the building during the last ninety days. Subsequent to our inquiry, the Safety Office informed us that they requested the outside vendor turn on this feature and send periodic reports to the County.

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 Alternative Work Schedule “Flex Time” Approval We found that Debra Palen regularly earned and was paid compensatory time and overtime by manipulating the County flex time policy. Based on our interview with Debra Palen and our review of time sheets, we found that Debra Palen:      

generally worked 35 hours in Monday through Thursday started her work day between 9:15 AM and 9:30 AM took an hour lunch worked past 5:00 PM sometimes as late as 10:00 or 11:00 PM (with Dean Palen) generally worked a half day on Friday recorded time she worked on Friday or after 5:00 PM Monday through Thursday as either overtime or compensatory time

Debra Palen’s pattern of recording her time generated additional pay in the form of compensatory time and/or overtime. Due to submitting compensatory time and overtime claims on a monthly basis or months after the fact, we were unable to determine that the hours claimed were actually worked We scheduled the hours Debra Palen recorded as worked during 2007 through the last day she worked in 2009 which disclosed that on average she worked the following number of hours each week: Year

Monday – Thursday

Friday

Compensatory Time

Overtime

2007 2008 2009

34.18 34.90 36.76

5.34 5.79 5.29

3.90 4.25 4.61

0.67 0.90 1.44

We requested from the Office of the County Executive (formerly the Office of the County Administrator) copies of form ADM-D-101 “Request for Alternative Work Schedule” approved for Debra Palen and were informed that none existed. We did find at the UCDOH two memos requesting copies of the flex-time approvals for Debra Palen: 

March 8, 2000 from the CSEA First Vice President to William Darwak, then County Administrator



March 24, 2004 from the CSEA President to former director of the UCDOH ESD (and cousin of Dean Palen) Allan Dumas

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The only reply to these requests that we found was a handwritten memo dated March 29, 2004 from Allan Demas and Dean Palen which stated that Debra Palen was given verbal approval to work compensatory time and overtime.  Inappropriate Use of Benefit Time Accruals We reviewed Debra Palen’s time records and found forty (40) instances where she was paid benefit time (vacation, sick, personal or floating holiday) in a manner where the benefit time charged created additional compensatory time or overtime. The Union contract which governed Debra Palen’s benefits structure stipulates that overtime worked over 35 hours up to 40 hours in one week is to be paid in compensatory time. Time worked over 40 hours in one week is to be paid at 1.5 the employee’s hourly pay rate. The contract further requires that overtime be approved by the County Legislature or, if worked in an emergency, overtime must be substantiated by the department head. The contract further requires an employee to request personal leave 48 hours in advance, except in emergencies. The following schedule shows the amount of benefit hours used to generate Debra Palen’s compensatory time and paid overtime: Year 2007 2008 2009

Compensatory Hours Earned and Paid Personal Vacation Sick Floating Holiday 11.50 12.25 0.00

21.00 27.25 3.50

3.50 0.00 1.25

3.75 3.50 5.00

Overtime Hours Earned and Paid Personal Vacation Sick Floating Holiday 6.25 6.75 5.00

0.00 4.00 3.50

2.50 0.00 1.25

0.00 0.00 0.00

For instance, we found that: 

During the week of March 12 – 23, 2007 Debra Palen recorded 37.5 hours worked Monday through Thursday. She did not record work time on Friday but charged 3 hours of sick leave. This generated 3 hours of compensatory time.



During the week of July 15 – 20, 2007 Debra Palen recorded 42 hours worked Monday through Thursday. On Friday she did not record work time but charged 3 hours of personal leave. This was paid as overtime.



During the week of March 24 – 28, 2008 Debra Palen recorded 38 hours worked Monday through Thursday. On Friday she did not record work time but charged 3.5 hours of personal leave. This generated 2 hours of compensatory time and 1 hour of overtime.

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

During the week of March 9 – 13, 2009 Debra Palen recorded 41 hours worked Monday through Thursday. She did not record work time on Friday but charged 3.5 hours of personal leave. This was paid as overtime.

Furthermore, we compared benefit hours reported on the bi-weekly payroll to Debra Palen’s time sheets and noticed a significant difference between the two records. The following table shows what we found: Year 2007 2008 2009

Benefit Hours Paid on Payroll Registers Personal Vacation Sick Floating Holiday 9.00 9.00 0.00

24.50 42.00 7.00

3.00 0.00 0.00

Benefit Hours Listed on Time Sheets Personal Vacation Sick Floating Holiday

7.00 0.00 0.00

36.00 25.00 4.50

66.50 50.00 7.00

3.00 1.00 2.00

24.50 16.00 3.50

We were not able to determine whether time sheets were kept on a monthly basis in order to manipulate benefit time as a way to generate compensatory time and overtime payments.  Overpayment of Compensatory and Overtime From January 1, 2007 through her last day worked (June 11, 2009), Debra Palen was overpaid $332.02 in compensatory and overtime. We scheduled the hours reported on the time sheets and calculated the number of hours that should have been submitted as compensatory and overtime hours and compared these to the number of hours actually paid and found net differences as shown in the table below. Year 2007 2008 2009 Total

Comp Hours over (under) paid (5.50) 5.50 2.25

Overtime Hours over (under) paid 12.0 (2.50) (2.00)

Amount over (under) paid $296.75 $ 44.28 ($ 19.01) $332.02

Because Debra Palen’s time sheets were never reviewed by anyone else in the UCDOH, these differences went undetected. As a result, she was overpaid for these hours.  Vacation Time Buy Back Based on our analysis of county payroll registers and Debra Palen’s time sheets, Deb Palen was paid for five unused vacation days each in 2007 and 2008 totaling $2,991.24 and $3,071.88 respectively. The Union contract allows members to carry over up to five days of unused vacation into the next year with supervisor or department head approval. All other vacation must be either used or paid for at the end of an employee’s year anniversary date. 34

We did not find nor were we provided any written approvals from Debra Palen’s supervisor or department head for the carry over of five days each year.  Benefitted Unfairly An employee is considered to have practiced abuse when his or her behavior involves a misuse of authority or position for personal gain or those of an immediate or close family member. Debra Palen was paid for compensatory time, overtime and vacation buy back in a manner that other employees did not have the benefit of enjoying. We could find no documentation or evidence to substantiate Debra Palen’s compliance or County enforcement of County policies and procedures or Union contract requirements which are requisite for an employee to “buy back” or receive payment for compensatory time, overtime and vacation time.

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Recommendations for Internal Control ♦ Control Environment – Recommendations 1 - 4 ♦ Assessing and Managing Risk – Recommendations 5 - 6 ♦ Control Activities – Recommendations 7 – 10 ♦ Information/Communication – Recommendations 11 – 12 ♦ Monitoring – Recommendations 13 - 16 This report is a study in the pitfalls and critical public consequences of inadequate and ineffective internal controls within government where the public good is to be paramount. The state of affairs in the UCDOH over the past 15 years is the quintessential argument for having a charter form of government in Ulster County. The relevance of this post-charter report is its emphasis on the fundamental role of checks and balances. Americans are familiar with the purposes of checks and balances as set forth in the U.S. Constitution. Yet, the application of checks and balances has its place not only in highest levels of government but in the ordinary routines of local government as well. Everyday, people participate in activities where the custody of trust – whether it be for funds, or for actions, or for decisions made that have the potential to benefit one over another – is at stake. This report demonstrates how the simplest of everyday routines can compromise our constitutional values. More importantly, it intends to highlight the obligations each of us has to protect and fulfill those values. The following recommendations are presented in the context of internal control standards consistent with the Comptroller’s commitment to fostering practices that protect County resources and ensure that ‘good’ things happen and ‘bad’ things don’t. INTERNAL CONTROL A good system of internal control is not a theoretical concept. It is an integration of activities, plans, attitudes, policies, procedures, systems, and the effort of people working together to provide a reasonable assurance an organization uses its resources properly to achieve its mission and goals. ♦ Control Environment The control environment sets the tone of an organization, influencing the control consciousness of its people. Factors that determine the control environment are integrity, ethical values and competence of its people; management’s philosophy and

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operating style; the way in which management assigns authority and responsibility; the way management organizes and develops its people; and the attention and direction provided by the governing board. The control environment has a pervasive influence on all the decisions and activities of an organization. Selected Findings:       

No continuity in oversight of the UCSDOH by responsible entities A management style, philosophy and tone of fear, intimidation and divisiveness within the UCDOH A failure of the County-wide system for resolving valid employee complaints and protecting employees No written policies and procedures within the UCDOH ESD Lack of compliance with County standard operating procedures A politicized permitting environment Nepotism practices such that the UCDOH operated as a private, family business

We recommend: 1. Full and comprehensive implementation of the Ulster County Charter be achieved. Moving forward, the UCDOH needs to change the former “status quo” management style. The Charter provides a foundation that fosters a balance of powers within the governance structure. Although one person needs to be responsible for the day-today operations of the UCDOH, all parties must be kept apprised of issues that arise and develop a collaborative resolution to address the issues or problems brought forward. The public expects nothing less from their County leaders. 2. The County Legislature adopt a nepotism policy, consistent with relevant laws, that would prohibit related parties from being in the same line of supervision. For example, it would be acceptable for the county to hire an individual related either through birth or marriage to another county employee as long as these two employees were not responsible for the direct supervision of each others work. Furthermore, in the event that an existing employee were to be offered a promotion, again the county would have to make sure that they would not be supervising someone directly related either through birth or marriage. 3. The UCBOH establish a code of conduct specific to the situations that may affect board members and staff, especially as relates to the permitting process and the obligation to protect the public health. 4. The UCDOH comply with Ulster County’s Standard Operating Procedures and memorialize in policy and procedure any functions specific to the UCDOH.

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♦ Assessing and Managing Risk Risk assessment is an on-going process to identify, evaluate and monitor events that threaten the success of activities undertaken to fulfill the mission of an organization. Risk management is the evaluation of identified risks to determine whether to accept the risk of a given situation, prevent or reduce the risk, or avoid the risk entirely. Risk may come from both internal and external sources, which is why it is important that the practice become integral to an organization’s decision making responsibilities. Selected Findings:   

The primary source of risk assessment was staff who documented the activities and behaviors that threatened the success of their commitment to protecting the public health. Based on a file review we were able to document an unsuccessful attempt by Legislative leaders in 1999 and 2000 to identify, evaluate and monitor problems within the UCDOH. Violators of the Ulster County Sanitary Code and NYS laws and regulations often faced no enforcement or fines.

We recommend: 5. The new public health director undertake a comprehensive risk assessment as part of his entry plan. In addition to producing the assessment’s outcomes, the process will also provide needed opportunities for staff to relate their experiences, become part of a team and be valued for their expertise and service. 6. Compliance with the NYSDOH expectation that enforcement proceedings be executed against code violators. Enforcement actions are risk management activities. ♦ Control Activities Control activities are the policies and procedures that help prevent or reduce risks that can impede the accomplishment of an organization’s mission, goals and objectives. These activities - approvals and authorizations, separation of duties, safeguarding of assets, reporting and analysis - guide individuals in the organization as they fulfill their responsibilities. Control activities help prevent the occurrence of undesirable events (prevention activities) or detect undesirable events when they do occur (detection activities). Selected Findings:  

Debra Palen had complete control of the ESD cash receipting process. Dean Palen had sole authority for all permit approvals. 38

     

Time sheets were submitted to Debra Palen who would verbally authorize payroll for the ESD staff, including herself. ESD staff were only allowed to ask payroll questions of Debra Palen. Permits issued were hand numbered, permit holders did not have unique identification numbers. A paper Cardex system was a primary source of recordkeeping. eHIPS records were not regularly kept nor cross checked against the Cardex system. There was a lack of segregation of duties.

We recommend: 7. Management use the November 18, 2009 NYSDOH report (Appendix B) as a template to insure that all UCDOH divisions and programs are in full compliance. For example:    

All entities requiring operating permits from the UCDOH should either (1) have current, approved permits, (2) be in enforcement or (3) be closed. All applications for permits that have been reviewed and have successfully passed all necessary inspections should be documented as such and have the appropriate permit issued timely. All temporary vendors should be issued a physical permit to post so they can document to the public they have met public health criteria necessary to operate. Full compliance with NYSDOH electronic reporting requirements such as eHIPS and SDWIS.

8. The UCDOH institute procedures to maintain public records in compliance with all relevant laws and regulations and conduct staff training on:   

What records should be maintained; Which individual(s) should be responsible for maintaining those files; The standards by which records be maintained.

9. That UCDOH ESD financial transactions be managed and supervised in the UCDOH Finance Office where established internal controls can be uniformly applied throughout the Department, including:    

Third-party verification of cash receipts and deposits Reconcile monies collected against bank statements and other records in the department. The County Executive ensure that no single individual alone have access to security devices, such as a safe. Incoming mail be recorded to provide an audit trail of official documents and funds.

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10. The payroll policies and procedures system be consistently and equitably enforced, including:     

All employees paid bi-weekly be required to submit bi-weekly time sheets to their department head in a timely fashion. Department heads should review, approve and sign time sheets before submitting them to the department payroll clerk for processing. No department head should have responsibility for approval of time sheets for County staff to whom they are related. Benefit hours reported on employees’ the bi-weekly payroll should, with some regularity, be compared to employees’ time sheets to identify and correct any significant differences between the two records. An employee who seeks an alternative work schedule should follow the adopted alternative work schedule policy and submit the proper form for approval by their supervisor and the County Executive.

♦ Information and Communication In order for risks to be controlled, it is imperative there be sound communication processes that capture necessary information and provides that information to all who are in need it. Strong communication practices are important because necessary and accurate information received in a timely manner affects how individuals make decisions and how they coordinate their activities. Selected Findings:      

Public health information was closely guarded and often withheld from governance entities. Department-wide staff meetings were a rare exception. ESD staff meetings had not been held in years. Dean Palen was verbally abusive to male staff, yelling, screaming and demeaning them. An institutional lack of supervisory communication and coordination. Staff consistently and persistently communicated with ‘authorities’ to effect change.

We recommend: 11. Formal, regular and memorialized communication and coordination between the UCBOH and the County Executive and the Legislature’s Health Services Committee. 12. The new public health director insure that information flows in all directions throughout the department and communications with staff are valued and respected.

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♦ Monitoring Monitoring is a process of assessing the quality of performance over time. It helps confirm that the control environment functions well and supports achievement of goals and objectives. Everyone has some level of responsibility for monitoring whether they are elected to their position, serve as staff or a volunteer, or are a member of the public. The process relies on communicating feedback to management and governance entities concerning the organization’s performance relative to established goals and objectives. Monitoring activities involve all levels of staff in evaluating the processes they implement and/or the people they supervise as well as the outcomes that result from their efforts and activities. Selected Findings:      

Staff monitored and reported on activities as evidenced by extensive files of complaints and grievances. Closely held approval processes limited monitoring of permitting processes. Dean Palen was responsible for approving Debra Palen’s time. NYS audits were mailed only to Dean Palen as he was both public health director and ESD director, no copies were sent by NYSDOH to the Legislature or its chairman or its administrator or the UCBOH. No performance evaluations were found in either Dean or Debra Palen’s personnel files. We found little evidence of any monitoring of Dean Palen’s performance as public health director until July of 2008 when the then president of the UCBOH and chairman of the Legislature’s Health Services Committee began to collaborate to effect change.

We recommend: 13. The new public health director develop performance measures against which he can monitor his staff and the County Executive, the Legislature, the UCBOH and the NYSDOH can monitor the department’s successes. 14. The County Executive evaluate the payroll manipulation practices detailed in this report and take steps to insure that benefit time is not being used by others in a manner that generates undue additional compensation. 15. That the director of public health interview staff about questionable permitting practices of the past to assess any current impacts they might have on public health and safety, then follow through with necessary and appropriate actions. 16. The County Legislature pass a memorializing resolution calling on the NYSDOH to provide, as a matter of course, both the Legislature and the County Executive with any audits they conduct within Ulster County. 41

POST SCRIPT:

PROFESSIONAL, DEDICATED STAFF

The Public Nursing Division and the Medical Examiner have operated without any meaningful oversight and guidance by former UCDOH Director Dean Palen. Other than the challenge of persuading Dean Palen to allow Public Nursing to work directly with the ESD (for example, to prepare for the H1N1 virus), Dean Palen was not a major obstacle to the Division’s fulfillment of its responsibilities. The Division is run by a dedicated and capable leader who supervises a staff committed to the mission of protecting the public health. The same must be said for the staff of the ESD. Despite truly extraordinary circumstances, the professionals and support staff have monitored and inspected sewage treatment facilities, public water supplies, restaurants, children’s camps, and waste haulers, just to mention a few. To their credit, they have protected the health of Ulster County residents by fulfilling their professional responsibilities while at the same time have tirelessly attempted to draw attention to and solve the insidious problems within the UCDOH. Over an extended period of time staff worked through their Union to get redress from the inequities they experienced. They appealed to the Board of Health and were rebuffed. They found a sympathetic ear with different Legislators at different times, but never redress. While this report focuses on select issues of negative consequence relative the Palen era in the UCDOH, our investigation and evaluation also proved the efficacy of staff despite their inordinate challenges and profound disappointment with the continuing saga. A case in point: Our review of the permitting process for the removal and transportation of offensive material (solid waste and sludge hauling) proved that permits are up-to-date as are the inspections of the vehicles used in transportation. We found comprehensive files with readily identifiable notations of the dates of application, inspections, approvals, and the receipting for fees. We credit UCDOH staff for the service they have provided our County, often under duress. It is important for the people of Ulster County to be reassured that knowledgeable and capable people have not only compensated for the failures of the system but also, and most importantly, protected the health of our community.

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EPILOGUE It has been five months since this piece of research and reporting was undertaken following the departure of Dean and Debra Palen from the County’s employ. Each of them has retired and each has filed a notice of claim against the County for postemployment funds they believe are due them. What has transpired in the interim at the UCDOH is part of a big picture approach to resolve the pre-existing problems within the UCDOH, improving the health of Ulster County residents, and bringing the UCDOH into compliance with the Charter. The County Executive’s Office has accomplished the following:            

Appointed an acting health director and an acting director of environmental sanitation; Obtained Legislative approval for the salary for a public health director who is also a medical doctor; Hired a medical doctor to serve as the public health director; Created the position of secretary to the public health director; Cleaned up the environmental sanitation permitting processes and resolved outstanding permit issues consistent with law and regulation; Continued efforts to resolve outstanding issues with septic permits; Internal controls for cash management are centralized in the fiscal office; Strengthening the infrastructure in the fiscal office to achieve redundancy and oversight; Worked closely with the NYS DOH and met all deadlines for the correction action plan in response to their February 2009 audit of the UCDOH; Reconstituted the Ulster County Board of Health with greater medical representation; Improved access to information on-line; and Began the process to rewrite the 1980 Ulster County Sanitary Code.

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Appendix A ESD File Room and Dean Palen’s Office

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Appendix B February 2009 New York State Department of Health Audit

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