New York City Board of Education

Transportation Aid Claimed in 1991 and 1992 for Franchise Carrier Services

The Board of Education (BE) provides students with free transportation to and from school based on distance criteria set by the Chancellor of the Board. Some students receive passes for service on routes operated by five private companies (Franchise carriers) which provide bus service under franchise agreements with the City. State Education Law provides for reimbursement of 90 percent of eligible transportation costs. During our audit period (claim years 1991 and 1992), BE claimed expenditures of nearly $20 million for these services. We found weaknesses in the accounting systems and control procedures used by some of the carriers, and a lack of oversight by OPT. Documentation at OPT and the carriers' offices related to invoices was inaccurate, missing or incomplete. Both OPT and the carriers were not in compliance with the State Education Department's record retention requirement. Carriers did not adequately control the distribution of passes to high schools. OPT was not reconciling its student data base with passes issued by the carriers to the high schools. The billing procedures were inefficient. We recommend an aid disallowance of $1,616 and made seven recommendations to improve controls. A-16-93