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State Education Department
Words ‘N Motion Special Education Programs
Compliance With the Reimbursable Cost Manual

Issued: December 30, 2015
Link to full audit report 2014-S-72
Link to 90-day response

To determine whether the costs reported by Words ‘N Motion Special Education Programs (Words ‘N Motion) on its Consolidated Fiscal Reports (CFRs) were properly documented, program-related, and allowable pursuant to the State Education Department’s (SED) Reimbursable Cost Manual (Manual). The audit included all expenses claimed on Words ‘N Motion’s CFR for the fiscal year ended June 30, 2013 and certain expenses claimed on Words ‘N Motion’s CFRs for the two fiscal years ended June 30, 2012.

Words ‘N Motion is a Staten Island, New York-based for-profit organization that is authorized by SED to operate, among other SED-approved programs, a preschool Special Education Itinerant Teacher (SEIT) program for disabled children between the ages of three and five years. During the 2012-13 fiscal year, Words ‘N Motion served 63 students. The New York City Department of Education (DoE) refers students to Words ‘N Motion based on clinical evaluations and pays for its services using rates established by SED. The rates are based on the financial information that Words ‘N Motion reports to SED on its annual CFRs. SED reimburses the DoE for a portion of its payments to Words ‘N Motion based on the SED-established rates. For the three fiscal years ended June 30, 2013, Words ‘N Motion reported approximately $4.6 million in reimbursable costs for the audited programs.

Key Findings

For the three fiscal years ended June 30, 2013, we identified $135,174 in reported costs that did not comply with the Manual’s requirements, and we recommend such costs be disallowed. The ineligible costs included $64,790 in personal service costs and $70,384 in other than personal service (OTPS) costs, as follows:

  • $62,895 in salaries and related fringe benefits for six Preschool Evaluations program staff who were incorrectly charged to the SEIT program;
  • $32,770 in over-allocated rent-related expenses;
  • $19,827 in fees, corporate taxes, advertising costs, and other miscellaneous expenses that were ineligible, insufficiently documented, and/or not program-related;
  • $17,787 in staff development costs that were unsupported and/or ineligible;
  • $1,010 in bonus payments that exceeded the limits stated in the Manual; and • $885 in undocumented payroll accruals and salary expenses.

Key Recommendations


  • Review the recommended disallowances resulting from our audit and make the appropriate adjustments to Words ‘N Motion’s CFRs and reimbursement rates.
  • Work with Words ‘N Motion officials to help ensure their compliance with Manual provisions.

To Words ‘N Motion:

  • Ensure that costs reported on future CFRs comply with all the requirements in the Manual.

Other Related Audits/Reports of Interest

Whitestone School for Child Development: Compliance With the Reimbursable Cost Manual (2014-S-38)
Institutes of Applied Human Dynamics: Compliance With the Reimbursable Cost Manual (2014- S-39)

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