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State Education Department
Spotted Zebra Learning Center, Inc..
Compliance With the Reimbursable Cost Manual

Issued: April 12, 2017
Link to full audit report 2016-S-81
Link to 90-day response

To determine whether the costs reported by Spotted Zebra Learning Center, Inc. (Spotted Zebra) 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 costs reported on Spotted Zebra’s CFR for the fiscal year ended June 30, 2014 and certain costs reported on Spotted Zebra’s CFRs for the two fiscal years ended June 30, 2013.

Spotted Zebra, a for-profit organization located in Albany, New York, is an SED-approved provider of preschool special education services. During the 2013-14 school year, Spotted Zebra provided three SED-funded, rate-based preschool special education programs to 43 children from school districts located in Albany, Columbia, Rensselaer, and Saratoga counties. The counties pay tuition to Spotted Zebra for these services using reimbursement rates set by SED; the State, in turn, reimburses the counties 59.5 percent of the tuition that the counties pay. SED sets the rates based on financial information, including costs, that Spotted Zebra reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with the guidelines in the RCM. For the three years ended June 30, 2014, Spotted Zebra reported over $2.5 million in reimbursable costs on its CFRs for the rate-based preschool special education programs it operated.

Key Finding

  • We found that the personal service costs we tested were in compliance with SED’s requirements. However, we identified $13,058 in other than personal service costs that Spotted Zebra reported on its CFRs that did not comply with SED’s prescribed requirements for reimbursement.

Key Recommendations


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

To Spotted Zebra:

  • 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

State Education Department: Ganrormic, Inc., Compliance With the Reimbursable Cost Manual: (2016-S-58)
State Education Department: 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