N.Y. MHY Law § 16.32 — New York Code / Act MHY / Title C / Article 16 / Section 16.32
Improper expenditure of moneys
Status: in_force

§ 16.32 Improper expenditure of moneys.\n  (a) No provider of services certified pursuant to this article shall\nmake any charitable contribution of any state moneys, medical assistance\npayments or social security or supplemental security income or any\ninterest or other income earned thereon, except as authorized by the\ncommissioner. Provided, however, the provisions of this section shall\nnot apply to receipts or donations from private or non-governmental\nsources and any interest or other income earned thereon.\n  (b) No loans, other than through the purchase of bonds, debentures, or\nsimilar obligations of the type customarily sold in public offerings, or\nthrough ordinary deposit of funds in a bank, shall be made by a\nnot-for-profit corporation which is certified as a provider of services\npursuant to this article to its employee who receives an annual salary\nin excess of thirty thousand dollars, or to any other corporation, firm,\nassociation or other entity in which such employee is a director or\nofficer or employee or holds a direct or indirect substantial financial\ninterest, except a loan by one corporation incorporated as a charitable\ncorporation as defined in paragraph (a) of section one hundred two\n(Definitions) of the not-for-profit corporation law to another\ncharitable corporation, or a loan for a temporary or emergency purpose\nwhich will further the health and welfare of the employee so long as the\npurpose and amount of such loan are disclosed to and approved by the\nboard of directors of such agency. Such disclosure shall be filed with\nthe secretary of the corporation and entered in the minutes of the\nmeeting, and, if approved by such board, such disclosure shall also be\nforwarded in writing to the commissioner and to the director of\ncommunity services of each local governmental unit that has, at the time\nof such disclosure, a contract with such corporation for the rendition\nof services pursuant to article forty-one of this chapter. A loan made\nin violation of this section shall be a violation of the duty to the\nnot-for-profit corporation of the directors or officers authorizing it\nor participating in it, but the obligation of the borrower with respect\nto the loan shall not be affected thereby.\n  (c) (1) No contract or other transaction between a not-for-profit\ncorporation which is certified as a provider of services pursuant to\nthis article and one or more of its employees who receive an annual\nsalary in excess of thirty thousand dollars, or between a not-for-profit\ncorporation and any other corporation, firm, association or other entity\nin which one or more of such persons are directors or officers of the\nboard or corporation, or employee who receives an annual salary in\nexcess of thirty thousand dollars, or have an indirect or direct\nsubstantial financial interest, shall be either void or voidable for\nthis reason alone:\n  a. If the material facts as to such person's interest in such contract\nor transaction and as to any such common directorship, officership or\nfinancial interest are disclosed in good faith or known to the board or\ncommittee, and the board or committee authorizes such contract or\ntransaction by a vote sufficient for such purpose without counting the\nvote or votes of such interested person; or\n  b. If the material facts as to such person's interest in such contract\nor transaction and as to any such common directorship, officership or\nfinancial interest are disclosed in good faith or known to the members\nentitled to vote thereon, if any, and such contract or transaction is\nauthorized by vote of such members.\n  (2) If such good faith disclosure of the material facts as to the\nperson's interest in the contract or transaction and as to any such\ncommon directorship, officership or financial interest, is made to the\ndirectors or members, or known to the board or committee or members\nauthorizing such contract or transaction, as provided in paragraph one\nof this subdivision, the contract or transaction may not be voided by\nthe corporation for the reasons set forth in paragraph one of this\nsubdivision. If there was no such disclosure or knowledge the\ncorporation may void the contract or transaction unless the party or\nparties thereto shall establish affirmatively that the contract or\ntransaction was fair and reasonable as to the corporation at the time it\nwas authorized by the board, a committee or the members.\n