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NYS Comptroller


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State Education Department
Brookville Center for Children’s Services, Inc.
Compliance With the Reimbursable Cost Manual

Issued: October 04, 2017
Link to full audit report 2016-S-75
Link to 90-day response

To determine whether the costs reported by Brookville Center for Children’s Services, Inc. (Brookville) on its Consolidated Fiscal Reports (CFRs) were reasonable, necessary, directly related to the special education program, and sufficiently documented pursuant to the State Education Department’s (SED) Reimbursable Cost Manual (Manual). The audit included expenses claimed on Brookville’s CFR for the fiscal year ended June 30, 2014, and certain expenses claimed on its CFRs for the two fiscal years ended June 30, 2013.

Brookville is a Nassau County-based not-for-profit organization authorized by SED to provide preschool special education services to children with disabilities between the ages of three and five years. During the 2013-14 school year, Brookville served about 456 students. Local counties refer students to Brookville and pay for their services using rates established by SED. Counties are reimbursed by SED for a portion of their payments to Brookville. For the three fiscal years ended June 30, 2014, Brookville reported approximately $72.2 million in reimbursable costs for the audited programs. During the same three fiscal years, NYSARC, Inc. - Nassau County Chapter (AHRC), a related party, provided Brookville with management services under the Corporate and Administrative Services Agreement (Management Agreement).

Key Findings
For the three fiscal years ended June 30, 2014, we identified $1,089,215 in reported costs that did not comply with the Manual’s requirements and recommend such costs be disallowed, as follows:

  • $305,207 in administrative costs for services to Brookville that should have been covered under the Management Agreement, and as such, the costs were unnecessary and duplicative;
  • $240,673 in lease expenses that were not in compliance with the Manual, including costs attributable to excessive space (square footage) allocations;
  • $273,100 in ineligible management fees, including $42,897 in non-reimbursable bonuses paid to AHRC officials and $41,594 in unsupported vehicle expenses;
  • $234,291 in ineligible and/or insufficiently documented fringe benefit expenses; and
  • $35,944 in over-allocated compensation, ineligible tuition reimbursements, and other insufficiently documented expenses.

Key Recommendations

  • Review the recommended disallowances resulting from our audit and make the appropriate adjustments to Brookville’s CFRs and reimbursement rates, as warranted.
  • Work with Brookville officials to help ensure their compliance with the provisions of the Manual.

To Brookville:

  • Ensure that all costs reported on future CFRs fully comply with the requirements in the Manual.

Other Related Audits/Reports of Interest
State Education Department: Yeled v’Yalda Early Childhood Center: Compliance With the Reimbursable Cost Manual (2015-S-19)
State Education Department: New York League for Early Learning, Inc.: Compliance With the Reimbursable Cost Manual (2015-S-43)

State Government Accountability Contact Information:
Audit Director:Kenrick Sifontes
Phone: (212) 417-5200; Email:
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236