Purpose

To determine whether the costs reported by Summit Educational Resources (Summit) 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

Summit provides a wide range of services to children with disabilities from ages three through 21. Summit provides preschool special education services to children with developmental disabilities from 38 school districts in three counties in western New York. Summit is reimbursed for preschool special education services through rates set by SED. These reimbursement rates are based on financial information, including costs, that Summit 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, Summit reported approximately $4.25 million in reimbursable costs for its preschool special education programs.

Key Findings

For the fiscal year ended June 30, 2013, we identified $28,176 in other than personal service costs that did not comply with SED’s requirements for reimbursement. The disallowances included $26,754 for consultant services and $1,422 in various other costs that were ineligible for reimbursement. We also questioned an additional $34,357 in costs for consultant services and information technology procurements that were not obtained through competitive bidding practices.

Key Recommendations

To SED:

• Review the disallowances and questionable costs identified by our audit and, if warranted, make the necessary adjustments to Summit’s reimbursement rates.

• Work with Summit officials to ensure they understand and comply with the RCM and the Consolidated Fiscal Reporting Manual.

To Summit:

• 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)