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NYS Comptroller


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State Education Department
Programs for Little Learners
Compliance With the Reimbursable Cost Manual

Issued: September 24, 2018
Link to full audit report 2017-S-87
Link to 90-day response

To determine whether the costs reported by Programs For Little Learners (PFLL) on its Consolidated Fiscal Reports (CFRs) 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 expenses reported on PFLL’s CFR for the fiscal year ended June 30, 2015 and certain expenses reported on PFLL’s CFRs for the two fiscal years ended June 30, 2014.

PFLL is an SED-approved, for-profit special education provider located in Westchester County, New York. PFLL provides preschool special education services to children with learning disabilities who are between three and four years of age. PFLL is reimbursed for preschool special education services through rates set by SED. The reimbursement rates are based on financial information, including costs, that PFLL reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with RCM requirements. For the three fiscal years ended June 30, 2015, PFLL reported approximately $2.3 million in reimbursable costs on its CFRs for one rate-based preschool special education program (Program) that it operated.

Key Findings
For the three fiscal years ended June 30, 2015, we identified $66,597 in ineligible costs that PFLL reported on its CFRs for the Program. The ineligible costs included:

  • $58,481 in personal service costs, which consisted of $41,298 in health insurance costs for salaried employees that were not proportionate to the health insurance costs for hourly employees, $11,917 in compensation that exceeded the regional median compensation for an Executive Director, $4,084 in unsupported salary costs, $749 in medical expenses that were not related to the Program, and $433 in agency administration costs for life insurance that were incorrectly reported as direct costs to the Program; and
  • $8,116 in other than personal service costs, which consisted of $7,687 in unsupported credit card expenses and $429 in ineligible expenses related to the purchase of water for staff.

Key Recommendations

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


  • Ensure that costs reported on annual CFRs fully comply with SED’s requirements, and communicate with SED to obtain clarification as needed.

Other Related Audit/Report of Interest
School for Language and Communication Development: Compliance With the Reimbursable Cost Manual (2017-S-59)

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