Governor Andrew Cuomo has formed a task force to seek data from nonprofits on the compensation they provide to executives and board members.
The Governor’s Task Force on Not-For-Profit Entities is requesting information on executive pay, the reasons the organizations consider themselves nonprofits and whether the boards believe that any of the executive compensation should be recouped.
Benjamin Lawsky, superintendent of the Department of Financial Services, is the chair of the task force. “Our task force is conducting a top-to-bottom review, not only to audit current compensation levels, but also 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,” Lawsky wrote in a letter to nonprofits dated August 25.
“Not-for-profits that provide services to the poor and the needy have a special obligation to the taxpayers that support them,” Lawsky added.
The task force is sending the letter out on a rolling basis to selected organizations that receive New York State funding, based on financial information. The organizations chosen include health and social service providers, hospitals and Medicaid providers.
The announcement comes weeks after the Young Adult Institute (YAI) came under criticism for executive pay and financial benefits revealed by The New York Times. Two leaders at the organization stepped down abruptly following the publication of the story.
Lynn Berman, senior media relations manager for the YAI Institute said, “YAI supports the task force and looks forward to working with the governor and state and local regulators to answer any questions or concerns.”
Berman also added, “Following the resignations, YAI’s board of trustees appointed Stephen Freeman to the position of CEO. He has not received an increase in his base salary as a result of the promotion. The board has also reduced the compensation of senior level managers.”
The letter does not mention the YAI controversy by name but states, “Governor Cuomo created the task force following reports of startlingly excessive salaries and compensation packages for executives at not-for-profits that depended on state Medicaid funding through the Office of People With Developmental Disabilities (OPWDD) and other State Agencies.”
The task force includes Senator Carl Marcellino, Assembly Member Steve Englebright, State Inspector General Ellen Biben, Secretary of State Cesar Perales, Medicaid Inspector General Jim Cox and four commissioners from State offices on mental health, developmental disabilities, health and substance abuse.
According to a 2010 Department of Budget analysis of nonprofit organizations contracting with mental hygiene agencies, there were about 1,926 employees making more than $100,000 per year, with an average salary of $168,555.
Englebright said in a statement, “For the first time in history New York State is developing a comprehensive database regarding the compensation, services, and governance structure of the not-for-profit entities that it contracts with. This is a good and necessary first step towards both such reform as may be necessary and a reassurance to the public that their tax dollars are being wisely invested.”
This article was published in the October 2011 issue of Able News.