New York City Board of Education

Transportation Aid Claimed in 1991 and 1992 for Contract Carrier Services

The Board of Education (BE) claimed Transportation aid in 1991 and 1992 for expenditures incurred to provide contract carrier (yellow bus) services to students in school year 1989-90 and 1990-91. Certain of these expenditures are eligible for reimbursement for State Transportation aid in accordance with the State Education Law. The audit objectives were to determine if the expenses claimed were actually incurred, adequately documented, and properly accounted for and allowable, allocable and in compliance with the State law. We found that the claims submitted by BE included expenditures that were both unallowable and undocumented. In addition, there were differences between expenditures as claimed and the audited amount. Many of the differences came from the questionable interpretation of certain contract clauses and undocumented costs. We questioned claimed expenditures of $10.19 million. In addition, the contracts entered into by BE and the contract carriers do not comply with State Education Department (SED) regulations. The report contained ten recommendations; six of them require that SED take action to correct the claimed expenditures, determine the adjustment to transportation aid for claim years 1991 and 1992, and review all pending claims for similar errors. The recommendations to BE require it to develop and document procedures for the preparation of the Transportation aid claim, and not renew or award contracts that combine transportation to and from school with transportation for other purposes. A-23-93