Objective

To assess the extent of implementation of the six recommendations included in our initial audit report, Licensing and Monitoring of Proprietary Schools (Report 2019-S-68).

About the Program

Non-degree-granting proprietary schools provide training in a broad range of disciplines, such as business, computer/information technology, and English as a second language. The New York State Education Law (Law) requires all non-degree-granting proprietary schools to be licensed by the State, unless they meet certain exemption criteria. Within the State Education Department (Department), the Bureau of Proprietary School Supervision (Bureau) is responsible for overseeing these proprietary schools, including licensing and monitoring to ensure that their overall educational quality will provide students with the necessary skills to secure meaningful employment and that students’ financial interests – that is, tuition investments – are protected. As of January 20, 2023, there were 359 licensed proprietary schools – 333 private career schools and 26 English as a Second Language schools – operating in New York State.

When initially granted, a proprietary school’s license is valid for 2 years. Thereafter, license renewals are granted for a period of 4 years. In order to be approved for the 2-year license, schools are required to submit certain financial documentation as evidence of their viability. Once licensed, the Bureau requires schools to submit financial statements and statistical reports annually. The Bureau reviews the documentation and has the authority to impose financial penalties for schools that fail to comply with documentation requirements and submission deadlines.

The Bureau is required to conduct inspections at each school at least once every licensure period to monitor compliance with records requirements and other provisions of the Law and Regulations of the Commissioner of Education (Regulations). Schools found to be operating in violation of the Law or Regulations may be placed on probation; have their license suspended, revoked, or not renewed; be charged financial penalties; and be subject to corrective action plans.

The objective of our initial audit, issued January 21, 2021, was to determine whether the Bureau was verifying that schools have sufficient resources prior to initial licensing, and whether the Bureau was adequately monitoring schools and utilizing its database to look for warning flags of future closings. Overall, we found that the Bureau generally did not perform due diligence in reviewing schools’ fiscal documents to ensure they had sufficient resources prior to their initial licensing. Furthermore, once schools had been licensed, the Bureau did not adequately monitor them or utilize its database to identify warning flags of future closures.

Key Findings

Department officials made significant progress in addressing the issues we identified in the initial audit report. Of the initial report’s six audit recommendations, five were implemented and one was partially implemented.

Key Recommendation

Officials are given 30 days after the issuance of this report to provide information on any actions that are planned to address the unresolved issues discussed in this follow-up.