With the recent news of executive pay at a Medicare-financed nursing home exceeding $1 million, New York State Gov. Andrew Cuomo called for an investigation into executive compensation at nonprofits receiving taxpayer dollars last week.
“Not-for-profits that provide services to the poor and the needy have a special obligation to the taxpayers that support them. Executives at these not-for-profits should be using the taxpayer dollars they receive to help New Yorkers, not to line their own pockets,” said Cuomo in a statement. “This task force will do a top-to-bottom review, not only to audit current compensation levels, but also to make recommendations for future rules to ensure taxpayer dollars are used to serve and support the people of this state-not pay for excessive salaries and compensation.”
A recent New York Times report showed that high salaries and compensation packages for executives were commonplace at some not-for-profits that depended on state Medicaid funding through agencies like the Office of People with Developmental Disabilities.
“There is a whole range of compensation levels and extremes that have existed for too long and must be reviewed. The use of taxpayer dollars must be scrutinized at every level,” Cuomo said.
According to Cuomo’s office, New York State Inspector General Ellen Biben, Secretary of State Cesar A. Perales, Medicaid Inspector General Jim Cox and Superintendent of the Department of Financial Services Benjamin Lawsky will lead the investigation. The state’s Medicaid inspector general has the ability to exclude providers from participation in the Medicaid program if they’re caught engaging in fraud or other abusive practices.
“I think it could be a very good idea if it’s done properly,” said Sue Learner of the nonprofit government reform group Common Cause on WXXI radio in Rochester, N.Y. Common Cause does not receive any tax dollars.
According to a January 2010 preliminary analysis of not-for-profit employees contracting with mental hygiene agencies by the Department of the Budget, there were close to 1,926 employees with annual salaries that were equal or more than $100,000-averaging at $168,555-and $324.6 million in total.