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NYS Comptroller


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State Education Department
Early Childhood Education Center
Compliance With the Reimbursable Cost Manual

Issued: December 29, 2014
Link to full audit report 2014-S-35
Link to 90-day response

To determine whether the costs reported by the Early Childhood Education Center (ECEC) on its Consolidated Fiscal Reports (CFRs) were properly calculated, adequately documented and allowable under the State Education Department’s (SED’s) guidelines, including the Reimbursable Cost Manual (RCM). The audit covered the fiscal year ended June 30, 2012.

ECEC provides preschool special education services to children with disabilities between the ages of three and five years. Pursuant to the State Education Law, providers such as ECEC are reimbursed by counties through rates set by SED. SED sets the special education tuition rates based on financial information, including costs, reported by providers on their annual CFR. To be eligible for reimbursement, the provider's reported costs must comply with the guidelines specified in the RCM. For the fiscal year ended June 30, 2012, ECEC reported about $2.8 million in reimbursable costs for the rate-based special education programs we audited.

Key Finding

  • We identified $3,501 in costs that did not comply with SED’s requirements for reimbursement. The non-reimbursable costs included gifts, food, and travel expenses.

Key Recommendations

To the State Education Department:

  • Review the disallowances identified by our audit and, if warranted, make the necessary adjustments to ECEC’s reimbursement rates.
  • Remind ECEC officials of the pertinent SED guidelines that relate to the deficiencies we identified.


  • Ensure that costs reported on annual CFRs fully comply with SED’s requirements.

Other Related Audits/Reports of Interest

SED: The Norman Howard School, Compliance with the Reimbursable Cost Manual (2012-S-18)
SED: All Services for Kids, Compliance with the Reimbursable Cost Manual (2012-S-19)

State Government Accountability Contact Information:
Audit Director: Andrea Inman
Phone: (518) 474-3271; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236