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State Education Department
Infant and Child Learning Center - The Research Foundation for the State University of New York
Compliance With the Reimbursable Cost Manual

Issued: June 6, 2018
Link to full audit report 2017-S-22
Link to 90-day response

To determine whether the costs reported by Infant and Child Learning Center - The Research Foundation for the State University of New York (ICLC) 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 (RCM). The audit focused primarily on expenses claimed on ICLC’s CFR for the fiscal year ended June 30, 2015 and certain expenses claimed on its CFRs for the two fiscal years ended June 30, 2014.

ICLC is a Brooklyn, New York-based organization approved by SED to provide preschool special education services to children with disabilities who are between the ages of three and five years. During our audit period, ICLC operated full-day and half-day Special Classes, full-day Special Class in an Integrated Setting, and Special Education Itinerant Teacher programs. For purposes of this report, these programs are referred to as the SED preschool cost-based programs. ICLC also operated three other SED-approved preschool special education programs: Evaluations, Related Services, and 1:1 Aides. However, payments for services under these programs are based on fixed fees. In addition, ICLC operated a day care program and a Department of Health-funded Early Intervention program. In 2011, the State University of New York Downstate Medical Center purchased the Long Island College Hospital, including its preschool – the Stanley S. Lamm Institute Preschool (Lamm). Lamm’s costs are reported on ICLC’s CFRs.

During the 2014-15 school year, ICLC served about 291 students. The New York City Department of Education (DoE) refers students to ICLC and pays for its services using rates established by SED. The rates are based on the financial information ICLC reports to SED on its annual CFRs. The DoE is reimbursed by SED for a portion of its payments to ICLC. For the three fiscal years ended June 30, 2015, ICLC reported approximately $19.1 million in reimbursable costs for its SED cost-based preschool special education programs.

Key Findings
For the three fiscal years ended June 30, 2015, we identified $1,727,960 in reported costs that did not comply with the requirements in the RCM, as follows:

  • $1,519,114 in improperly calculated parent agency administrative allocation costs;
  • $99,276 in insufficiently documented and/or undocumented costs;
  • $68,537 in ineligible fringe benefits, including $46,906 in vacation and sick leave costs and $21,631 in Metropolitan Commuter Transportation Mobility Taxes;
  • $25,606 in personal service expenses, including $12,994 in excess staffing expenses and $12,612 in ineligible bonuses; and
  • $15,427 in other ineligible other than personal service expenses.

Key Recommendations

  • Review the recommended disallowances resulting from our audit and make the appropriate adjustments to ICLC’s CFRs and tuition reimbursement rates, as warranted.
  • Work with ICLC officials to ensure their compliance with SED’s reimbursement requirements.


  • Ensure that costs reported on future CFRs comply with SED’s reimbursement requirements.

Other Related Audits/Reports of Interest
Birch Family Services, Inc.: Compliance With the Reimbursable Cost Manual (2016-S-74)
Kennedy Child Study Center: Compliance With the Reimbursable Cost Manual (2017-S-7)

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