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NYS Comptroller


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State Education Department
Finger Lakes United Cerebral Palsy
Compliance With the Reimbursable Cost Manual

Issued: November 05, 2015
Link to full audit report 2015-S-10
Link to 90-day response

To determine whether the costs reported by Finger Lakes United Cerebral Palsy (Happiness House) on its Consolidated Fiscal Report (CFR) 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.

Happiness House, a not-for-profit organization located in the Finger Lakes region of central New York, is authorized by SED to provide preschool special education services to children with disabilities from three to five years of age. During the 2012-13 school year, Happiness House provided preschool special education services to about 150 children with learning disabilities in Geneva, Canandaigua, and Waterloo, NY. Happiness House is reimbursed for preschool special education services through rates set by SED. These reimbursement rates are based on financial information, including costs, that Happiness House reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with RCM requirements. For the fiscal year ended June 30, 2013, Happiness House reported approximately $3.4 million in reimbursable costs for its preschool special education programs.

Key Findings

According to SED guidelines, costs reported on the CFR should be reasonable, necessary, directly related to the special education program and properly documented. For the fiscal year ended June 30, 2013, we identified $15,454 in costs charged to the Programs that did not comply with SED’s requirements for reimbursement. These costs included $13,570 in other than personal service (OTPS) costs and $1,884 in personal service costs that were either ineligible expenses, not reasonable or necessary, not properly documented, or incorrectly reported on the CFR.

Key Recommendations


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

To Happiness House:

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

Other Related Audits/Reports of Interest

Dynamic Center Inc.: Compliance With the Reimbursable Cost Manual (2014-S-3)
Summit Educational Resources, Compliance With the Reimbursable Cost Manual (2014-S-49)

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