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NYS Comptroller


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State Education Department
Whitestone School for Child Development
Compliance With the Reimbursable Cost Manual

Issued: April 07, 2015
Link to full audit report 2014-S-38

To determine whether the costs reported on the Consolidated Fiscal Reports (CFRs) of the Whitestone School for Child Development (Whitestone) were calculated properly, documented adequately, and allowable pursuant to the State Education Department’s (SED) Reimbursable Cost Manual (Manual). The audit included all expenses claimed for the fiscal year 2012-13 and certain expenses for the two fiscal years ended June 30, 2012.

Whitestone is a not-for-profit organization that provides a full-day preschool special education program to disabled children between the ages of three and five years. Whitestone, located in Queens, New York, provides preschool services throughout Queens and neighboring boroughs. For the fiscal year ended June 30, 2013, Whitestone reported approximately $2.3 million in reimbursable costs for the programs.

Key Findings

For the three fiscal years ended June 30, 2013, we identified $154,563 in reported costs that did not comply with Manual requirements and recommend such costs be disallowed. These ineligible costs included $115,296 in personal services costs and $39,267 in other than personal service costs. Among the disallowances we identified were:

  • $58,355 in unsupported employee expenses;
  • $56,941 in bonus payments that did not comply with Manual guidelines;
  • $10,592 for unsupported vehicle charges;
  • $9,344 for rental accruals reported in the wrong fiscal year; and
  • $3,088 for other miscellaneous personal and unsupported expenses.

Key Recommendations
To the State Education Department:

  • Review the recommended disallowances resulting from this audit and make the appropriate adjustments to Whitestone’s CFRs and reimbursement rates.
  • Work with Whitestone officials to help ensure their proper reporting of reimbursable costs.

To Whitestone:

  • Ensure that costs reported on annual CFRs comply with Manual requirements.

Other Related Audits/Reports of Interest

Bilingual SEIT & Preschool, Inc.: Compliance With the Reimbursable Cost Manual (2011-S-13)
IncludED Educational Services, Inc.: Compliance With the Reimbursable Cost Manual (2010-S-59)

State Government Accountability Contact Information:
Audit Director: Frank Patone
Phone: (212) 417-5200; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236