N.Y. Comp. Codes R. & Regs. tit. 10, § 40-1.40 – Limitation on State aid.

(a) State aid may be limited, in whole in or part, if the commissioner determines, upon review of a local health department’s State aid application, that the local health department will not deliver a core public health service required by Subpart 40-2 of this Part. In that event, the commissioner may use the proportionate share that is not granted to the local health department to contract with agencies, associations, or organizations to provide such services, or expend such share to provide such services upon approval of the Director of the Division of Budget, as authorized by section 605 of the Public Health Law.
(b) Partial service counties. The commissioner may approve a State aid application that seeks funding for fewer than all core public health services required pursuant to Subpart 40-2 of this Part, provided that:
1. (1) a community health assessment is completed by the municipality pursuant to section 40-2.40 of this Part;
2. (2) the selected core services meet all standards for those services set forth in this Part; and
3. (3) the State aid application identifies the availability of core public health services not provided by the local health department, who will provide those services and the manner in which the services will be provided and financed.