State Education Department


Skip to Content

Login   Subscribe   Site Index   Contact Us   Google Translate™

NYS Comptroller


Taxpayers' Guide to State and Local Audits

State Education Department
Compliance With the Reimbursable Cost Manual

Issued: October 26, 2016
Link to full audit report 2016-S-23
Link to 90-day response

To determine whether the costs reported by Bornhava 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 (RCM). Our audit covered the fiscal year ended June 30, 2014.

Bornhava, a not-for-profit organization located in Buffalo, New York, offers a range of preschool special education services to children with disabilities from birth to five years of age. Bornhava is authorized by SED to provide preschool special education services and is reimbursed for these services through rates set by SED. The reimbursement rates are based on financial information, including costs, that Bornhava 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, 2014, Bornhava reported approximately $1.8 million in reimbursable costs on its CFR for three rate-based preschool special education programs that served approximately 150 students.

Key Findings

For the fiscal year ended June 30, 2014, we determined Bornhava claimed $14,237 in ineligible costs for its three rate-based preschool special education programs. The ineligible costs included:

  • $9,055 in personal service costs that exceeded the approved full-time equivalent ratios for certain employees, and
  • $5,182 in other than personal service costs that consisted of non-reimbursable non-audit services, depreciation costs, food expenses, bank fees, bad debt, administrative costs, charitable contributions, and legal fees for lobbying.

Key Recommendations


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

To Bornhava:

  • 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

Jawonio, Inc.: Compliance With the Reimbursable Cost Manual (2015-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