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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

State Education Department
Oversight of Private Career Schools


Issued: August 7, 2013
Link to full audit report 2011-S-51
Link to 90-day response

Purpose
To determine whether the State Education Department's (Department) Bureau of Proprietary School Supervision (Bureau) provided sufficient oversight of private career schools in New York State. The audit covers the period January 1, 2009 through June 27, 2012.

Background
The New York State Education Law (Law) requires the Bureau to oversee and monitor non-degree granting private career schools in New York State. The intent of these career schools is to provide graduates with technical and other skills necessary to find and maintain employment. In general, the Law requires such schools, which charge tuition, to be registered or licensed. The Bureau works with prospective schools to guide them through the application and licensing process. Once licensed, the Bureau should monitor the schools to protect students' financial and educational interests against fraudulent or substandard programs. In addition, the Bureau is responsible for identifying and investigating unlicensed schools. The Law authorizes the Department to take disciplinary actions against private career schools that violate the applicable provisions of the Law or Regulations of the Commissioner of Education.

The Bureau has about 20 employees and is funded through application fees and assessments collected from private career schools. From April 1, 2009 through December 31, 2011, the Bureau collected fees and assessments totaling $9.3 million.

Key Findings

  • The Bureau has not provided adequate oversight of private career schools in New York State. The Bureau often did not comply with provisions of the Education Law and internal policies designed to ensure the adequacy of programs offered by private career schools. As a result, the Bureau has not used its resources in the most effective manner to protect the interests of students and taxpayers.
  • Of the 148 pending applications for new schools and/or programs, the Bureau had not acted on 66 (45 percent) of them within one year, as required. Of these 66 applications, 20 were pending for at least two years.
  • Of 1,328 investigations of potentially unlicensed schools, 724 (55 percent) remained open for at least 10 years. Further, from a sample of 100 pending investigations, we identified 18 schools that appeared to be operating without a State license. These schools provided instruction in a range of careers, including computer software, cosmetology and credit granting. We referred these schools to Bureau officials for appropriate follow-up action.
  • Of 491 licensed schools, 292 (59 percent) did not submit required statistical reports showing required job placement, enrollment and graduation data. The Bureau did not follow up with any of the delinquent schools.
  • The Bureau's automated management information systems are outdated and limit the Bureau's ability to identify priorities and ensure that limited staff resources are used in the most efficient manner.

Key Recommendations

  • Ensure that license applications for private career schools are processed within one year of initiation.
  • Establish time frames and implement procedures for completing investigations of private career schools in a timely manner. Provide immediate attention to those cases which involve the most significant issues.
  • Develop and implement a formal plan to use information technology to improve the Bureau's ability to integrate and retrieve data vital to the oversight of private career schools.

Other Related Audits/Reports of Interest

State Education Department: Unlicensed Business Schools (1997-S-36)
State Education Department: Use of Information Technology for Professional Licensing and Renewal (2006-S-22)


State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone:(518) 474-3271; 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