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NYS Comptroller

THOMAS P. DiNAPOLI

State Education Department
Extended School Day Program
(Issued: 2/25/2014)


Purpose
The objective of our examination was to determine if the State Education Department (Department) paid SCO Family of Services (SCO) for expenses that were appropriate and allowable under the terms and conditions of the contracts and all applicable guidelines. We examined the $634,544 in expenses SCO claimed for reimbursement from the Department during the period July 1, 2011 through June 30, 2012.

Background
The Department awarded SCO two contracts totaling $2,740,200 for the period October 1, 2010 through June 30, 2014 to operate an Extended School Day Program (ESD) in two New York City middle schools. Under these contracts, SCO provides academic, arts and music activities during non-school hours to children who attend high-poverty, low-performing schools.

Key Findings

  • The Department paid SCO $194,320 (or 31 percent of the total reimbursements) for expenses that were not related to the operation of the ESD program, not necessary or not allowable.  These include:
    • 141,493 in employee salaries for services performed outside the ESD programs’ approved hours of operation and approved student population or not directly related to the ESD programs. More specifically:
      • $29,360 for three instructors who worked under a different grant.
      • $7,424 for security guard services after the ESD program ended for the day.
      • $3,173 for a fitness instructor who taught an adult aerobics class.
      • $11,188 in direct salary expenses for the SCO Educational Coordinator who did not work under the ESD program.
      • $90,348 for ESD program staff hours worked when the program was not operating.
    • $15,270 for employee benefits related to the above inappropriately claimed salaries.
    • $15,691 for health insurance benefits SCO (i) claimed for employees for whom it did not provide health insurance or (ii) did not properly allocate according to the terms and conditions of the contracts.
    • $10,226 for field trips for students not enrolled in the ESD program.
    • $4,046 for miscellaneous expenses not allowed under grant guidelines.
    • $2,670 for deejay services which SCO improperly procured with an SCO program coordinator.
    • $4,924 more for indirect costs than it was entitled to for the grant year.
  • These inappropriate payments occurred because the Department did not have an effective monitoring system in place to ensure it paid SCO only for expenses that were appropriate and allowable under the contracts.

Key Recommendations

  • Recover the $194,320 overpayment identified in this report.
  • Review other payments under the grants and recover any overpayments.
  • Design and implement an effective risk-based monitoring system which allows the Department to ensure payments made to SCO and other grantees are appropriate.
  • Ensure grantees adhere to the terms and conditions of current and future grant contracts.
  • Enhance the current training program to assist grantees in familiarizing themselves with applicable guidelines.

 

For a complete copy of Report 2012-0052, click here.


Division of Contracts and Expenditures
Bernard J. McHugh, Director of State Expenditures

Phone: (518) 474-4868 Email: stexpend@osc.state.ny.us
Address: Office of the State Comptroller, Division of Contracts and Expenditures
110 State Street, 10th Floor; Albany, NY 12236