NY Ment Hygiene L § 31.31 (2021)
2021 New York Laws MHY - Mental Hygiene Title E - General Provisions Article 31 - Regulation and Quality Control of Services for the Mentally Disabled 31.31 - Improper Expenditure of Moneys.

§ 31.31 Improper expenditure of moneys.  (a)  No  provider  of services licensed pursuant to this article shall make any charitable contribution of  state  moneys,  medical  assistance payments  or  social  security  or  supplemental  security income or any interest or other income earned thereon, except  as  authorized  by  the commissioner.    Provided, however, the provisions of this section shall not apply to receipts or  donations  from  private  or  non-governmental sources and any interest or other income earned thereon.  (b) No loans, other than through the purchase of bonds, debentures, or similar obligations of the type customarily sold in public offerings, or through  ordinary  deposit  of  funds  in  a  bank,  shall  be made by a not-for-profit corporation which is licensed as a provider  of  services pursuant  to  this article to its employee who receives an annual salary in excess of thirty thousand dollars, or to any other corporation, firm, association or other entity in which such  employee  is  a  director  or officer  or employee or holds a direct or indirect substantial financial interest, except a loan by one corporation incorporated as a  charitable corporation  as  defined  in  paragraph  (a)  of section one hundred two (Definitions)  of  the  not-for-profit  corporation   law   to   another charitable  corporation,  or a loan for a temporary or emergency purpose which will further the health and welfare of the employee so long as the purpose and amount of such loan are disclosed to  and  approved  by  the board  of  directors of such agency. Such disclosure shall be filed with the secretary of the corporation and  entered  in  the  minutes  of  the meeting,  and,  if approved by such board, such disclosure shall also be forwarded in  writing  to  the  commissioner  and  to  the  director  of community services of each local governmental unit that has, at the time of  such  disclosure, a contract with such corporation for the rendition of services pursuant to article forty-one of this chapter. A  loan  made in  violation  of  this  section shall be a violation of the duty to the not-for-profit corporation of the directors or officers  authorizing  it or  participating in it, but the obligation of the borrower with respect to the loan shall not be affected thereby.  (c) (1) No contract or  other  transaction  between  a  not-for-profit corporation which is licensed as a provider of services pursuant to this article and one or more of its employees who receive an annual salary in excess   of   thirty  thousand  dollars,  or  between  a  not-for-profit corporation and any other corporation, firm, association or other entity in which one or more of such persons are directors or  officers  of  the board  or  corporation,  or  employee  who  receives an annual salary in excess of thirty  thousand  dollars,  or  have  an  indirect  or  direct substantial  financial  interest,  shall  be either void or voidable for this reason alone:   a. If the material facts as to such person's interest in such contract or transaction and as to any such common  directorship,  officership  or financial  interest are disclosed in good faith or known to the board or committee, and the  board  or  committee  authorizes  such  contract  or transaction  by  a vote sufficient for such purpose without counting the vote or votes of such interested person; or   b. If the material facts as to such person's interest in such contract or transaction and as to any such common  directorship,  officership  or financial  interest  are disclosed in good faith or known to the members entitled to vote thereon, if any, and such contract  or  transaction  is authorized by vote of such members.  (2)  If  such  good  faith  disclosure of the material facts as to the person's interest in the contract or transaction  and  as  to  any  such common  directorship,  officership or financial interest, is made to the directors or members, or known to the  board  or  committee  or  members  authorizing  such  contract or transaction, as provided in paragraph one of this subdivision, the contract or transaction may not  be  voided  by the  corporation  for  the  reasons  set  forth in paragraph one of this subdivision.   If   there  was  no  such  disclosure  or  knowledge  the corporation may void the contract or transaction  unless  the  party  or parties  thereto  shall  establish  affirmatively  that  the contract or transaction was fair and reasonable as to the corporation at the time it was authorized by the board, a committee or the members.