NY State Governor Executive Order Limits Use of State Funds for Nonprofit Salaries

Apparently getting a jump on the legislative process, Governor Cuomo issued an Executive Order directing state agencies involved in health and other human services to implement regulations so that “State financial assistance or State-authorized payments shall not be provided for compensation paid or given to any executive by such provider in an amount greater than $199,000 per annum.”  The $199,000 limit is subject to future adjustments, and waivers can be requested.  Note also that the order does not impose a cap on compensation, only on the use of state funds to pay in excess of the cap, so the strongest impact is likely to be on entities who receive the bulk of their funding from the state. 

This blog will follow further developments, since the scope and detailed operation of this rule will depend on the specific language of the regulations enacted by the various state entities subject to the Executive Order.  Also, the Order is essentially implementing proposed legislation in the budget submitted by the Governor to the legislature.  This in turn raises the possibility that the legislature could make changes when it passes the law requested by the Governor (or even decline to pass the law), which would raise questions about the final rules.

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IRS issues EO 2011 Annual Report & 2012 Workplan; Updates for Hospitals, Colleges/Univesities and Foundations

The IRS Exempt Organizations section has issued its 2011 Annual Report and 2012 Workplan.  Of note for our clients are:

1.  Hospitals:   The Annual Report notes that the Affordable Care Act of 2010 requires the IRS to review the “community benefit activities” of hospitals, but that the reviews are expected to take place without the IRS contacting the hospitals.  Of interest is the statement that the EO section will use the information gathered from the reviews for “compliance” purposes.

2.  Colleges and Universities:  In the 2012 Workplan, the IRS states that the EO is completing work on its review of questionnaire data, and of its examinations of selected colleges and universities, and will issue a final report.  The questionnaires were sent to 400 colleges and universities.  No firm date is given for the issuance of the report.

3.   Private Foundations:  Noting that “many private foundations hold substantial assets,” the Workplan states that the EO is examining “a selection of the largest private foundations.”

 

 

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