State Education Department
Bilingual SEIT & Preschool, Inc.
Compliance with the
Reimbursable Cost Manual
Issued: July 19, 2012
Link to full audit report 2011-S-13
To determine whether the costs reported by Bilingual SEIT & Preschool, Inc. (Bilingual), on its Consolidated Fiscal Reports (CFRs) were properly calculated, documented, and allowable under the Reimbursable Cost Manual (Manual) issued by the State Education Department (SED).
Bilingual, located in Flushing, New York, provides special education itinerant teacher services (SEIT) and preschool special class services to disabled pre-school children. The New York City Education Department (DoE) pays tuition to Bilingual using rates set by SED. SED sets these rates using financial information that Bilingual presents in an annual CFR filed with SED. For the two years ended June 30, 2009, Bilingual claimed approximately $23.4 million in reimbursable costs.
We disallowed a total of $1,474,924 in costs reported by Bilingual. We have referred our findings to the Queens County District Attorney's Office for its review and will assist that office in any further inquiry it deems appropriate. The disallowances included:
- $471,050 in personal service costs. These costs included $233,368 paid to 26 employees whose time and attendance could not be substantiated. They also included a portion of the salary paid to Bilingual's Assistant Executive Director who is the former wife of its Executive Director, and was paid $369,081 for fiscal years 2007-08 and 2008-09. We determined that she actually performed the services of a payroll specialist rather than those of the Assistant Executive Director. Therefore, we reduced her salary by $107,380.
- $795,368 in other-than-personal-service costs, including $327,033 in unrelated and inadequatelydocumented expenses, $5,567 for children's bedroom furniture, and $887 for cosmetics.
- $208,506 in inadequately-documented and/or inappropriate contracted direct care costs.
- In addition, Bilingual officials may have deprived Federal, State, and local taxing authorities of a
significant amount of tax revenues by treating top officials of the school, as well as certain other
staff, as independent contractors rather than as employees.
- Encourage Bilingual's Board and senior management to attend ethics training on their fiduciary responsibilities, and advise them that personal expenses are not eligible for reimbursement.
- Recover all reimbursements made to Bilingual for inappropriate and unsupported expenses, and consider recouping payments for personal items directly from responsible Bilingual officials.
Other Related Audits/Reports of Interest
State Education Department: Integrated Treatment Services: Compliance with the Reimbursable Cost Manual Report 2009-S-37
State Education Department: Henry Viscardi School: Compliance with the Reimbursable Cost Manual Report 2009-S-70
State Government Accountability Contact Information:
Audit Director: Frank Patone
Phone:(212) 417-5200; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236