Objective

To determine the adequacy of the New York City Department of Education’s (DOE) monitoring of Universal Pre-Kindergarten (UPK) programs’ compliance with applicable health, safety, and financial reporting requirements. Our audit scope covered the period from July 1, 2015 through June 30, 2017. We revisited certain schools in September 2018 to verify information subsequently provided by the DOE.

About the Program

The UPK program was established through Chapter 436 of the Laws of 1997 to provide all eligible four-year-olds in New York State with the opportunity for an early childhood education. A new statutory framework was subsequently established through Chapter 56 of the Laws of 2014. The Regulations of the Commissioner of Education (Regulations) require buildings and classrooms used for UPK to be safe and to comply with applicable fire safety, health, and building codes, and equipment and furnishings to be maintained in a state of good repair and sanitation and to be safe and suitable for children. In January 2014, the New York City (NYC) Administration released an implementation plan to dramatically expand NYC’s existing pre-kindergarten program.¹

The expanded UPK program is administered and overseen by the DOE’s Division of Early Childhood Education (DECE), which also conducts fiscal audits of the program, as needed. The UPK program is funded by the State and NYC. The State’s portion is based on a State Education Department grant. The funds must be used for the sole purpose of implementing the UPK program and are allocated to the DOE annually.

In NYC, UPK is offered in public school settings, through programs operated by the DOE, and non-public school settings, through contracts with eligible community-based organizations (CBOs) (herein referred to as contracted center-based and contracted school-based). For the 2016-17 school year, there were 72,176 UPK students enrolled in approximately 1,900 NYC UPK programs at a cost of about $850 million.

UPK providers must adhere to Sections 3602-e and 3602-ee of the New York State Education Law (Law) and applicable Regulations. Additionally, school-based providers must comply with Article 43 of the NYC Health Code (Health Code), among others, while contracted center-based providers must comply with Article 47. The Health Code regulates the health and safety of child care services provided by educational centers. Further, providers must comply with the terms of their DOE contracts when submitting and claiming expenses.

DOE officials were provided with a list of the UPK programs that we selected for review. We requested that they inform the providers of the audit and of our expected visits. We also gave providers advance notice of our visits to their program sites.

Key Findings

We reviewed the operations and finances of a judgmental sample of 33 NYC UPK providers – 15 DOE school-based, 11 contracted center-based, and 7 contracted school-based – to determine the adequacy of the DOE’s monitoring of their compliance with applicable health and safety regulations and with financial reporting requirements. We determined that the DOE could improve its oversight of UPK programs, especially for schools operated by CBOs, to ensure that children are not exposed to unsafe and unhealthy conditions. These improvements include better alignment of the health and safety requirements promulgated by Articles 43 and 47 of the Health Code and better monitoring of UPK providers’ compliance with the applicable provisions of the Law, Regulations, and Health Code. Such improvements could reduce health and safety risks to students. We also believe that there are opportunities for the DOE to strengthen the systems it has in place to monitor payments to CBOs. For example:

• While all UPK programs serve the same population, school- and center-based programs are governed by different Health Code articles with separate regulations (i.e., certain requirements are included in one article but not in the other).
• We found potentially toxic cleaning supplies, windows that did not have window guards, potential fire hazards (cigarette butts discarded on a wood chip-covered play area used by students), and peeling paint in classrooms.
• Three of 9 contracted center-based providers for which we had usable fire drill logs and 5 of the 15 DOE school-based programs did not comply with fire drill requirements.
• The safety plans for 6 of the 7 contracted school-based providers and 7 of the 11 contracted center-based providers were incomplete.
• $64,648 (4.6 percent) of the approximately $1.4 million in expenses reported to the DOE by 10 of the 18 contracted providers in their End-Year Fiscal Reports for the 2015-16 school year were not documented.

Key Recommendations

• Work with the NYC Department of Health and Mental Hygiene to align the Health Code requirements governing center-based and school-based programs.
• Ensure that UPK providers comply with applicable provisions of the Law, Regulations, and Health Code to promote a safe and healthy environment for UPK program students.
• Ensure that all required fire drills are conducted at the required times and that fire drill logs are properly maintained.
• Perform full reviews of End-Year Fiscal Reports on a sample basis. Request and review documentation to confirm that expenses claimed by contracted providers are supported and used solely for the UPK program and that unspent funds are returned to the DOE.

¹ In fall 2017, NYC expanded its UPK program to include three-year-olds. This new initiative has been classified as “3-K for All.”