Objective

To determine whether the costs reported by Early Childhood Learning Center of Greene County (ECLC) on its Consolidated Fiscal Report (CFR) were properly calculated, adequately documented, and allowable under the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (RCM). The audit covered expenses reported on ECLC’s CFR for the fiscal year ended June 30, 2015.

About the Program

ECLC is an SED-approved, not-for-profit private school located in Greene County that provides preschool special education services to children with developmental disabilities. ECLC is reimbursed for these services through rates set by SED. The reimbursement rates are based on financial information, including costs, that ECLC reports to SED on its annual CFR. To be eligible for reimbursement, reported costs must comply with the RCM requirements. For the fiscal year ended June 30, 2015, ECLC reported $547,761 in reimbursable costs on its CFR for the rate-based preschool special education programs that it provided.

Key Findings

For the fiscal year ended June 30, 2015, we identified $12,843 in reported non-personal service costs that did not comply with SED’s requirements. These costs included $12,198 in expenses that lacked sufficient supporting documentation and $645 for certain non-audit services, depreciation, and advertising expenses that were not reimbursable.

Key Recommendations

To SED:

• Review the disallowances identified by our audit and, if warranted, make the necessary adjustments to the costs reported on ECLC’s CFR and to ECLC’s tuition reimbursement rates.
• Remind ECLC officials of the pertinent SED guidelines that relate to the deficiencies we identified.

To ECLC:

• Ensure that all costs reported on annual CFRs fully comply with SED’s requirements, and communicate with SED to obtain clarification as needed.