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DiNapoli: Brooklyn Pre-K special education provider claimed nearly $3M in ineligible expenses

January 6, 2016 Brooklyn Daily Eagle
New York state Comptroller Thomas P. DiNapoli on Wednesday released an audit that indicates that a Brooklyn preschool special education provider claimed nearly $3 million in ineligible expenses for reimbursement. Eagle file photo by Rob Abruzzese
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A Brooklyn preschool special education provider, Yeled v’Yalda Early Childhood Center, claimed nearly $3 million in ineligible expenses for reimbursement, according to an audit released Wednesday by New York state Comptroller Thomas P. DiNapoli. 

“Schools for special needs children must properly account for their use of public funds,” DiNapoli said. “We have found too many schools that fall short of state education requirements, which is why we are auditing preschool special education providers throughout New York. We’ve referred our findings to the state Education Department for recovery of the misspent funds.” 

Yeled is one of many preschool Special Education Itinerant Teacher (SEIT) programs in New York state that provide one-on-one instruction for special needs children, usually at the students’ homes, schools or other programs they may attend. The New York City Department of Education (DOE) refers students to Yeled based on clinical evaluations and pays for its services using rates set by the state Education Department (ED), which reimburses DOE for 59.5 percent of the costs. 

Unlike most other states, New York’s SEIT programs are privately run, some for profit and some not-for- profit. The programs submit annual financial reports to ED that include their expenses for reimbursement. Yeled, like many SEIT programs, offers other services, but the expenses related to these cannot be reimbursed by the state’s SEIT program. 

To qualify for reimbursement, expenses have to meet ED’s criteria and include documentation to support the costs. For example, when an employee works for both a provider’s SEIT program and one or more of its other non-SEIT services, the employee’s division of labor must be documented to qualify for reimbursement. 

Over a three-year period ending June 30, 2014, Yeled reported $81 million in costs for reimbursement. 

DiNapoli’s auditors recommended ED disallow $2,950,518 in expenses the school reported to the state for reimbursement, including: 

$1,062,157 for mortgage interest, depreciation and other costs related to 20 sites that were not approved by ED;

$683,915 in costs related to a Head Start program, an Early Intervention program, a portion of a building Yeled leased to a medical center and other non-SEIT related programs;

$571,929 in salaries and fringe benefits for 14 employees who did not work for the SEIT program. Yeled’s internal records indicated they worked as administrators for other programs, such as the Women, Infants and Children program; a Fitness Center; Early Intervention; Evaluations; Head Start and Early Head Start;

$215,528 in salaries for employees who worked for multiple programs, but whose pay was over- allocated to SEIT expenses;

$74,025 for unsupported expenses on 10 leased vehicles that Yeled failed to keep usage logs for as required; and

$19,597 for gifts, including $645 for flowers and $16,191 for gift baskets given to both employees and non-employees.

DiNapoli recommended that ED review the audit’s recommended disallowances and recoup the money through adjustments to Yeled’s reimbursement rates. 

The full audit can be found at 

—Information from the Office of the New York State Comptroller 


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