Purpose

To determine whether the costs reported by JCC of Mid-Westchester (JCC) on its Consolidated Fiscal Reports (CFRs) were properly calculated, adequately documented, and allowable under the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (RCM). The audit covered the three fiscal years ended June 30, 2014.

Background

JCC is a not-for-profit organization located in Scarsdale, New York, that offers a variety of services to children and adults in the community, including health, fitness, art, music, social, cultural, and educational programs. JCC is authorized by SED to provide preschool special education services to children with disabilities between the ages of three and five years. JCC is reimbursed for these services through rates set by SED. These reimbursement rates are based on financial information, including costs, that JCC reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with the RCM requirements. For the three fiscal years ended June 30, 2014, JCC reported approximately $5.4 million in reimbursable costs on its CFRs for its ratebased preschool special education programs that served 191 students.

Key Findings

For the three fiscal years ended June 30, 2014, JCC claimed $90,900 in ineligible costs for its ratebased preschool special education programs. The ineligible costs included:

• $26,923 in personal service costs that consisted of staffing for teacher aides in excess of approved staffing ratios, incorrectly allocated salaries and fringe benefits, personal commuting expenses, ineligible employee bonuses, and compensation from a prior year; and
• $63,977 in other than personal service costs that consisted of non-allowable depreciation, incorrectly allocated administrative expenses, non-reimbursable interest, and other nonreimbursable expenses.

Key Recommendations

To SED:

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

To JCC:

• 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

Kidz Therapy Services, PLLC: Compliance With the Reimbursable Cost Manual (2015-S-63)
Easter Seals New York: Compliance With the Reimbursable Cost Manual (2015-S-27)