The Cuomo Administration’s Task Force on Not-For-Profit Entities (the “Task Force”) is sending a letter to not-for-profit organizations seeking detailed information about compensation paid to executives, administrators, and board members. The data request will be sent to the boards of organizations that receive taxpayer support from the State of New York. This includes Medicaid providers, hospitals, health systems, social service providers and others.

The letter states that the 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.” A copy of the letter can be found here.

The request seeks information on the organization’s executives, administrators, and board members, as well as any individuals who received over $100,000 in total compensation during the period of 2007 through June 2011. The request asks for data on all compensation, including benefits of any kind, and all perks such as cars, travel, hotel expenses, apartments, tickets to games/events and/or club memberships. For each such individual, the letter requests detailed answers regarding all compensation received, applicable bonus programs and descriptions of how the board of directors derived the compensation for such individuals. The request also seeks the board’s view on recoupment and/or claw-back of executive and board compensation, the justification for the organization’s status as a not-for-profit entity, the identity of compensation consultants retained as part of the compensation process and an accounting of the actions that the board will take to protect taxpayer funds.

To date, the Task Force has not commented on what action, if any, will be taken against an organization that fails to respond to the data request, nor has the Task Force stated whether the data received will be disclosed to any federal or state agencies. If you serve on the board of an organization receiving funding from the State of New York, whether in the form of grants, Medicaid funding, or otherwise, it is essential for your organization to respond promptly to the Task Force data request. Farrell Fritz, P.C., with its significant experience representing not-for-profits, including hospitals and health systems, is well-equipped to provide the advice and support your organization will need in preparing its response to a Task Force data request.