Objective

To determine whether the costs reported by Springbrook NY, Inc. (Springbrook) 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 Springbrook’s CFR for the fiscal year ended June 30, 2015.

About the Program

Springbrook is an SED-approved special education provider located in Otsego County. Springbrook provides, among other programs, preschool special education services to children with disabilities who are between three and five years of age. Springbrook is reimbursed for these services through rates set by SED. The reimbursement rates are based on financial information, including costs, that Springbrook 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, Springbrook reported approximately $1 million in reimbursable costs on its CFR for the Preschool Integrated Special Class (referred to as the Program) that it operated.

Key Findings

For the fiscal year ended June 30, 2015, we identified $56,183 in ineligible costs that Springbrook reported on its CFR for the Program. The ineligible costs included:

• $39,579 in personal service costs, consisting of $38,106 in excessive salary costs and $1,473 for certain life insurance costs; and
• $16,604 in other than personal service costs, consisting of $10,368 in undocumented vehicle and staff travel costs, $3,414 in costs that were unrelated to the Program, and $2,822 in other ineligible expenses.

Key Recommendations

To SED:

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

To Springbrook:

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