Objective

To determine whether the costs reported by United Cerebral Palsy Association of Nassau County, Inc. (CPN) on its Consolidated Fiscal Reports (CFRs) were properly calculated, adequately documented, and allowable under the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (RCM) and the Consolidated Fiscal Reporting and Claiming Manual. The audit covered the expenses reported on CPN’s 2017 and 2018 CFRs for the fiscal year ended June 30, 2018.

About the Program

CPN is an SED-approved, non-profit special education provider located in Roosevelt, serving students from 28 school districts throughout Nassau County on Long Island. Among other programs, CPN provides preschool education services to children with disabilities who are 3 to 5 years of age. CPN is reimbursed for these services through rates set by SED. The reimbursement rates are based on financial information, including costs, that CPN reports to SED on its annual CFRs. To be eligible for reimbursement, reported costs must comply with RCM requirements. For the fiscal year ended June 30, 2018, CPN reported approximately $3.8 million in reimbursable costs on its CFRs for two rate-based special education programs that it operated: Preschool Special Class – over 2.5 hours per day and Preschool Special Class – 2.5 hours per day (collectively referred to as the Programs).

Key Findings

For the fiscal year ended June 30, 2018, among other issues, we identified $159,069 in ineligible costs reported by CPN on its CFRs for the Programs. The ineligible costs included:

• $145,501 in personal service costs, consisting of $101,794 in payments with unsupported time and payroll records, $42,442 in excess staffing, $1,223 in payments made to a non-SED position, and $42 in salaries that were in excess of the median rate.
• $13,568 in other than personal service costs, consisting of $8,343 in insufficiently documented vehicle logs, $1,025 in ineligible credit card transactions, and $4,200 in other ineligible costs.

Key Recommendations

To SED:

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

To CPN:

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