The New York Institute for Special Education (Institute) is a not-for-profit school located in the Bronx. The Institute receives more than $21 million a year in State operating aid to provide educational services to disabled students. It also receives funding from the federal government and private endowments. We identified certain weaknesses in the Institute's system of internal control. As a result of these weaknesses, the costs incurred by the State in its support of the Institute were higher than they should have been.