2023 New York Laws › MHY - Mental Hygiene › Title C - Developmental Disabilties Act › Article 16 - Regulation and Quality of Services › 16.32 - Improper Expenditure of Moneys.

§ 16.32 Improper expenditure of moneys.
(a)  No  provider of services certified pursuant to this article shall
make any charitable contribution of any 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 certified 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 certified 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.