N.Y. Comp. Codes R. & Regs. tit. 18 § 486.6
Reimbursement for expenditures by a social services district for the operation of an adult care facility, other than a shelter for adults subject to Part 491 of this Title, shall be subject to withholding or denial when the district, as operator of the adult care facility, fails to comply with the law and regulations pertaining to the certification and operation of such facilities.
The department shall notify the district of all violations pursuant to the procedures set forth in section 486.2(i) of this Part.
If corrections have not been made within 30 days of the date the district received notice of the violations, or an approvable plan for correction has not been submitted by the district within 30 days of the date the district received notice of the violation, the department may withhold either up to 50 percent of the State reimbursement for allowable expenses for all publicly operated adult care facilities, other than shelters for adults, in the district, if two or more of the district's publicly operated facilities are subject to penalty pursuant to this section, or up to the entire State reimbursement for allowable expenses for the nonconforming facility, from the 31st day after the notice of violation until the department notifies the local district, in writing, that the facility is in compliance. The commissioner of the local district shall be given written notice of the decision to withhold reimbursement.
If the local district does not correct the violations cited in the notice of violations within the time periods specified in the notice of withholding, the department may deny up to the entire amount of the withheld reimbursement. The commissioner of the local district shall be given written notice of the decision to deny reimbursement.
N.Y. Comp. Codes R. & Regs. Tit. 18 § 486.6