Purpose

The objective of our examination was to determine whether the New York State Education Department (SED) monitors their contractors’ performance to ensure they expended the advanced funds in accordance with the terms and conditions of the contracts.

Background

Our office examined certain advance payments made pursuant to grant contracts or agreements (contracts) by SED during the period of July 2012 through July 2018. We selected 13 contracts valued at $224,000 where the contractors received only an initial advance payment. These payments totaled $56,000 and all the contracts expired on or before June 2018.

Key Findings

We found SED needed to improve its contract monitoring to ensure contractors expended advanced funds in accordance with the terms and conditions of the contracts. SED officials did not obtain any reports from the 13 contractors at the time of our review even though the contracts had expired. Therefore, SED did not obtain documentation detailing how these contractors expended the advanced funds they received. As a result, SED did not have assurance the contractors expended the funds as required by the contract nor did SED know whether the contractors owed a refund of unspent funds to the State.

Key Recommendations

• Continue to implement improved procedures that will help determine timely whether funds were expended in accordance with the terms and conditions of the contracts.
• Determine whether funds were expended in accordance with the terms and conditions of the contracts. Recover overpayments as appropriate.
• Implement a policy for new contracts of only sending advance payments when requested by contractor.