Opinion
February 7, 1991
Appeal from the Supreme Court, New York County (Leonard N. Cohen, J.).
The history of this dispute between the New York City Human Resources Administration and the New York State Department of Social Services has been expounded upon at length in Matter of Gross v Perales ( 130 Misc.2d 132, mod 133 A.D.2d 37, affd 72 N.Y.2d 231, rearg denied 72 N.Y.2d 1042). With respect to the audit period of 1976-1980, the Court of Appeals has previously found the city to have been "in compliance with all applicable statutes and regulations" and that "[t]he administrative penalty was assessed solely because the City failed to comply with unpromulgated, internal audit standards", which the city "had no legal duty to comply with". (Matter of Gross v Perales, 72 N.Y.2d, supra, at 238.) We conclude, as did the IAS court, that the State has failed to demonstrate that its present more stringent standards were other than "unpromulgated, internal audit standards" and therefore do not constitute a basis upon which a penalty may be imposed pursuant to Social Services Law § 20 (3) (e). However, we find the injunctive relief granted to be overly broad with respect to respondents' internal audit standards for purposes other than the imposition of a penalty upon petitioner since such standards are not required to be promulgated as a departmental rule or regulation. (State Administrative Procedure Act § 102 [b] [i]; see, Matter of Krauskopf v Perales, 139 A.D.2d 147, 150, affd 74 N.Y.2d 730.) We note petitioner's concession that the award of interest was improper.
Concur — Kupferman, J.P., Ross, Rosenberger, Asch and Wallach, JJ.