Governor Signs Order Seeking to Limit Compensation and Administrative Costs at State-Funded Service Providers

January 19, 2012

Governor Cuomo yesterday signed an Executive Order to reform excessive compensation at state-funded service providers. The Order is designed to control administrative costs and compensation packages at service providers receiving State funding. This follows the Cuomo Administration’s Task Force on Not-for-Profit Entities that has been charged with collecting detailed information on compensation paid to executives, administrators and board members of organizations receiving taxpayer support (described here).

The Executive Order charges State agencies (including Office for People with Developmental Disabilities, Office of Mental Health, Office of Alcoholism and Substance Abuse Services, Office of Children and Family Services, Office of Temporary and Disability Assistance, Department of Health, Office for the Aging, Division of Criminal Justice Services, and the Office of Victim Services) with promulgating regulations, amending agreements, and taking other actions to limit executive compensation and administrative costs that may eligible for reimbursement. Each agency must require that an executive can draw no more than $199,000 annually from public funds. The order also requires that 75 percent of every public dollar must be directed to care and services rather than to support administrative costs. That percentage will increase by 5 percent each year to a maximum of 85 percent in 2015.

The text of the order can be found here.

View the PDF

  • Related Practice Areas: Healthcare