Purpose

To determine whether the costs reported by Hear 2 Learn PLLC (Hear 2 Learn) on its Consolidated Fiscal Report (CFR) were properly calculated, adequately documented and allowable under the State Education Department’s (SED’s) guidelines, including the Reimbursable Cost Manual (RCM). The audit covered the fiscal year ended June 30, 2013.

Background

Hear 2 Learn is a privately owned institution located in Syracuse, New York that provides preschool special education services to children with disabilities from birth through age five. During the 2012-13 school year, Hear 2 Learn provided Special Education Itinerant Teacher (SEIT) services to 105 children with learning disabilities from 15 school districts in two counties in central New York. Hear 2 Learn is reimbursed for SEIT services through rates set by SED. These reimbursement rates are based on financial information, including costs, that Hear 2 Learn reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with RCM requirements. For the fiscal year ended June 30, 2013, Hear 2 Learn reported approximately $2.7 million in reimbursable costs on its CFR, of which $340,876 was for its SEIT program.

Key Findings

For the fiscal year ended June 30, 2013, Hear 2 Learn charged $20,851 in costs to the SEIT program that did not comply with SED’s requirements for reimbursement. The disallowances included $10,957 in other than personal service costs and $9,894 in personal service and associated fringe benefit costs that were either non-reimbursable, incorrectly reported on the CFR, or not properly documented.

Key Recommendations

To SED:

• Review the disallowances identified by our audit and, if warranted, make the necessary adjustments to Hear 2 Learn’s reimbursement rates.
• Remind Hear 2 Learn officials of the pertinent SED guidelines that relate to the deficiencies we identified.

To Hear 2 Learn:

• Ensure that costs reported on annual CFRs fully comply with SED’s requirements.

Other Related Audits/Reports of Interest

State Education Department: Dynamic Center Inc. - Compliance With the Reimbursable Cost Manual (2014-S-3)
State Education Department: Bright Start Pediatric Services - Compliance With the Reimbursable Cost Manual (2014-S-34)