Bilinguals Inc., a Queens-based provider of pre-school special education services, inappropriately charged taxpayers more than $875,000 over a three-year period, including claims for bonuses, rent for a Manhattan apartment and an employee’s funeral expenses, according to an audit released today by State Comptroller Thomas P. DiNapoli.
“Bilinguals, like other special education providers audited by my office, took advantage of lax oversight to cash in,”DiNapoli said. “The State Education Department needs to recoup the money paid for these unwarranted charges and put in place more stringent standards to protect taxpayer dollars and ensure the parents and children who rely on special education programs get the funding they deserve”
DiNapoli’s audits and investigations of the special education sector have so far resulted in ten felony arrests and five guilty pleas with more than $3 million in ordered restitution. DiNapoli’s office is currently working with various prosecutors on other criminal referrals stemming from audits of special education providers.
Bilinguals, located in Forest Hills, Queens is a private, for-profit special education institution that provides special education programs to children between the ages of three and five. Bilinguals provides these services in students’homes, schools and neighborhood community centers throughout the New York metropolitan region.
The New York City Department of Education (DoE), as well as the other local governments referring students to Bilinguals, pays for Bilinguals’program services using rates established by the State Education Department (SED). SED, in turn, reimburses DoE and the other local governments for about 60 percent of their payments to Bilinguals. To qualify for reimbursement, provider costs must comply with SED guidelines that provide specific guidance to providers on cost eligibility and documentation requirements. For the three fiscal years ended June 30, 2011, Bilinguals reported approximately $13.3 million in reimbursable costs for the audited programs.
DiNapoli’s auditors found a total of $875,729 in reported costs that do not comply with SED requirements for reimbursement. These include $541,405 in personal services, $128,629 in non-personal services and $205,695 in international recruitment costs.
Bilinguals claimed $243,950 for compensation for 17 individuals who did not work on the audited programs, including $131,254 in salaries and fringe benefits for three individuals who were actually working for an affiliated program during the audit period. Auditors also identified another $76,119 in salary and fringe benefits charged to taxpayers for 11 people who did not work on the proper programs until October 2010, well into the audit’s time frame.
Other personal service costs that auditors disallowed included $27,329 in excessive compensation paid to the executive director and the assistant executive director; and $218,682 in bonus payments that did not comply with state guidelines. Specifically, DiNapoli’s auditors found that Bilinguals made $153,793 in bonus payments to three employees that were not based on merit, as required by SED, but instead on the number of hours each employee worked. The remaining $64,889 in noncompliant bonus payments were made to 20 employees, and they were not supported by the required performance evaluations.
In addition to $29,722 claimed by Bilinguals for costs including rent for a Manhattan apartment, cable television and three vehicles for the executive director and assistant executive director, the provider also claimed $15,895 for gift cards, clocks, parties and funeral expenses for a Bilinguals’employee.
Because of a shortage of special education teachers and therapists able to speak both English and Spanish, Bilinguals sought to recruit potential employees from South America. The provider claimed $279,552 for “international recruiting”costs, including more than $28,000 for travel, but auditors found it hired only eight bilingual teachers and therapists from overseas during the audit period for the programs.
- SED review the recommended disallowances resulting from our audit and make the appropriate adjustments to Bilinguals’CFRs and reimbursement rates, as appropriate;
- SED work with Bilinguals officials to help them comply with state guidelines; and
- Bilinguals ensure that costs reported to SED comply with requirements.
SED officials agreed with the audit’s recommendations and said they may pursue additional actions based upon the findings. For a copy of the report visit: http://osc.state.ny.us/audits/allaudits/093014/12s65.pdf
New York spends about $1.4 billion annually to provide special services and classroom instruction to approximately 75,000 preschool children with physical, developmental and emotional disabilities.
Last year, Governor Cuomo signed legislation mandating audits of every preschool special education services program provider in the state by the Comptroller’s Office. The legislation, a program bill of the Office of the State Comptroller, also tightens weaknesses in the program, including how students are evaluated and placed in programs, and how reimbursement is calculated.