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NYS Comptroller


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State Education Department
Ganrormic, Inc.
Compliance With the Reimbursable Cost Manual

Issued: March 21, 2017
Link to full audit report 2016-S-58
Link to 90-day response

To determine whether the costs reported by Ganrormic, Inc. 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). The audit covered the fiscal year ended June 30, 2014.

Ganrormic, a for-profit organization located in Orchard Park, New York, is an SED-approved provider of preschool special education services. Ganrormic serves about 35 preschool students with disabilities from 13 different school districts in two counties in western New York. For the fiscal year ended June 30, 2014, Ganrormic offered one SED rate-based preschool special education program: Preschool Integrated Special Class. The counties that use Ganrormic’s preschool special education services pay tuition to Ganrormic using reimbursement rates set by SED. The State then reimburses the counties 59.5 percent of the special education tuition that the counties pay. SED sets the special education tuition rates based on financial information, including costs, reported by Ganrormic on its annual CFR that it submits to SED. To be eligible for reimbursement, reported costs must comply with the guidelines in the RCM. For the fiscal year ended June 30, 2014, Ganrormic reported approximately $1.3 million in reimbursable costs on its CFR for the Preschool Integrated Special Class it operated.

Key Finding

  • For the fiscal year ended June 30, 2014, we identified $4,854 in other than personal service costs that Ganrormic reported on its CFR that did not comply with SED’s requirements for reimbursement. We also questioned the appropriateness of $14,431 in costs for professional services that were not obtained through competitive procurement processes.

Key Recommendations


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

To Ganrormic:

  • 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

Rochester Childfirst Network: Compliance With the Reimbursable Cost Manual (2016-S-15)
Benchmark Family Services, Inc.: Compliance With the Reimbursable Cost Manual (2016-S-47)

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