Purpose

To determine whether the costs reported by Jawonio, Inc. (Jawonio) on its Consolidated Fiscal Report (CFR) were properly calculated, adequately documented, and allowable under the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (RCM). Our audit covered the calendar year ended December 31, 2014.

Background

Jawonio is a not-for-profit organization located in Rockland County, New York that offers services to individuals of all ages who have developmental disabilities, behavioral health challenges, and chronic medical conditions. Jawonio is approved by SED to provide preschool special education services to children with disabilities who are between the ages of three and five years. Jawonio is reimbursed for these services through rates set by SED. The reimbursement rates are based on financial information, including costs, that Jawonio reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with the RCM requirements. For the calendar year ended December 31, 2014, Jawonio reported over $3.5 million in reimbursable costs on its CFR for four rate-based preschool special education programs that served approximately 150 students.

Key Findings

For the calendar year ended December 31, 2014, Jawonio claimed $26,975 in ineligible costs for its four rate-based preschool special education programs. The ineligible costs included:

• $24,611 in personal service costs that consisted of excess severance pay, compensation for work that was not related to the special education programs, excess compensation and fringe benefits, and a non-reimbursable bonus; and
• $2,364 in other than personal service costs that consisted of ineligible depreciation and undocumented vehicle expenses.

Key Recommendations

To SED:

• Review the disallowances identified by our audit and make the necessary adjustments to the costs reported on Jawonio’s CFR and to Jawonio’s tuition reimbursement rates, as appropriate.
• Remind Jawonio officials of the pertinent SED guidelines that relate to the deficiencies we identified.

To Jawonio:

• Ensure that all costs reported on annual CFRs fully comply with SED’s requirements, and communicate with SED to obtain clarification as needed.

Other Related Audits/Reports of Interest

Summit Educational Resources: Compliance With the Reimbursable Cost Manual (2014-S-49)

Hear 2 Learn PLLC: Compliance With the Reimbursable Cost Manual (2014-S-74)