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NYS Comptroller


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State Education Department
Rochester Childfirst Network
Compliance With the Reimbursable Cost Manual

Issued: November 17, 2016
Link to full audit report 2016-S-15
Link to 90-day response

To determine whether the costs reported by Rochester Childfirst Network (RCN) on its Consolidated Fiscal Report (CFR) were properly calculated, adequately documented, and allowable under the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (Manual). The audit covered the fiscal year ended June 30, 2014.

RCN, a not-for-profit organization located in Rochester, New York, is an SED-approved provider of preschool special education services. During the 2013-14 school year, RCN provided Preschool Special Education Itinerant Teacher (SEIT) services and Preschool Integrated Special Class services to 56 children with learning disabilities from ten school districts in Monroe County. Monroe County pays tuition to RCN for its preschool special education services using reimbursement rates set by SED; the State, in turn, reimburses the county 59.5 percent of the preschool special education tuition it pays. SED sets the reimbursement rates based on financial information, including costs, that RCN reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with the guidelines in the Manual. For the fiscal year ended June 30, 2014, RCN reported $752,438 in reimbursable costs on its CFR for the two rate-based preschool special education programs it operated.

Key Finding

  • For the fiscal year ended June 30, 2014, we identified $13,201 in costs that were charged to the preschool special education programs that did not comply with the Manual’s requirements for reimbursement. The ineligible costs included $7,042 in other than personal service costs and $6,159 in personal service costs.

Key Recommendations


  • Review the disallowances identified by our audit and, if warranted, make the necessary adjustments to the costs reported on RCN’s CFR and to RCN’s tuition reimbursement rates.
  • Remind RCN officials of the pertinent SED guidelines that relate to the deficiencies we identified.


  • Ensure that costs reported on annual CFRs fully comply with SED’s requirements, and communicate with SED to obtain clarification as needed.

Other Related Audits/Reports of Interest

Compliance With the Reimbursable Cost Manual: The ARC of Ulster-Greene (2015-S-60)
Compliance With the Reimbursable Cost Manual: Early Education Center, Inc. (2015-S-96)

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