N.Y. Comp. Codes R. & Regs. tit. 10, § 40-2.1 – General provisions concerning State aid eligibility.

(a) Core public health services are eligible for State aid reimbursement only if such services are included in an approved State aid application and only if performed in accordance with this Subpart.
(b) Local health departments may contract for core public health services provided, however, that:
1. (1) to remain eligible for State aid, any contract for core public health services must require that:
  1. (i) core public health services shall be performed under the general supervision and control of the local health department commissioner or public health director;
  2. (ii) if a contract relates to a core public health service for which a fee must be collected pursuant to section 40-1.51 of this Part, the contractor shall make every reasonable effort to collect such fee and, for clinic health services, the contractor shall make every reasonable effort to collect third-party reimbursement and any relevant co-payments; and
  3. (iii) the contractor shall report to the local health department all fees, co-payments, and third-party reimbursement collected;
2. (2) pursuant to section 616 of the Public Health Law, the local health department shall not claim as State aid eligible expenses any portion of the contract cost relating to indirect costs or fringe benefits, including but not limited to retirement funds, health insurance and Federal old age and survivors insurance; and
3. (3) when the local health department provides clinic services pursuant to section 40-2.2 of this Subpart through a contract with another provider, the commissioner has discretion to review and approve or disapprove the contract. When exercising such discretion, the commissioner shall examine factors including, but not limited to, the quality of the proposed contractor’s services, the ability the local health department to oversee the contracted services, and the contractor’s efficiency in delivering services.
(c) The following costs related to the facility space used by the local health department are eligible for State aid:
1. (1) rent paid to a person, a private entity, or a public entity other than the municipality that operates the local health department;
2. (2) for space owned by the municipality that operates the local health department, the cost of maintenance of space in lieu of rent (MILOR).