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NYS Comptroller


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State Education Department
Circle of Friends
Compliance With the Reimbursable Cost Manual

Issued: December 29, 2014
Link to full audit report 2014-S-32
Link to 90-day response

To determine whether the costs submitted by Circle of Friends 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, 2013.

Circle of Friends provides preschool special education services to children with disabilities between the ages of three and five years. Pursuant to the State Education Law, SED establishes reimbursement rates for special education providers based on financial information, including costs, reported by providers on their annual CFR. To be eligible for reimbursement, the provider's reported expenses must comply with the guidelines specified in the RCM. For the fiscal year ended June 30, 2013, Circle of Friends claimed about $1.1 million in reimbursable expenses for the preschool special education programs we audited.

Key Finding

  • Based on a review of a sample of transactions, we found that, generally, the costs reported by Circle of Friends on their CFR were properly calculated, adequately documented, and allowable according to the RCM. We did note $604 in non-reimbursable costs that were either undocumented or unnecessary.

Key Recommendations

To the State Education Department:

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

To Circle of Friends:

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

Other Related Audit/Report of Interest

SED: The Norman Howard School - Compliance With the Reimbursable Cost Manual (2012-S-18)

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