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August 6, 2010



DiNapoli: Learning Center Collected Funds
For Services Not Rendered


An audit released by State Comptroller Thomas P. DiNapoli found that the Rainbow Rhymes Learning Center (Rainbow) of the Bronx spent nearly a half million dollars in reported expenses that were either not adequately supported, not program appropriate or were claimed for a period Rainbow was not entitled to reimbursement. Furthermore, auditors found Rainbow did not provide significant contract deliverables including no after school program for inner city children at one facility.

“Our state’s educational programs are meant to help our children grow and meet their full potential,” said DiNapoli.  “But officials still need to keep a close eye on the bottom line, provide the services they’re supposed to provide, and not waste taxpayer dollars. These are tough times.  It’s more important than ever that we protect every taxpayer dime.”

Rainbow’s contract indicated that 200 children would be served at one facility Monday through Thursday from 3 p.m. to 6:30 p.m, on Saturday from 9 a.m. to 2 p.m. and during the summer. However, Rainbow did not provide any after school services at the Rainbow facility. The contract also indicated that an additional 100 children would be served after school at the Butler Memorial United Methodist Church (UMC), but the facility, on average, only served 27 children per day. Moreover, Rainbow operated an unlicensed after school program at the UMC for 18 months. During this unlicensed period, Rainbow was paid $256,206, which is included in the unsupported and inappropriate expenses noted above.

Rainbow was also charged with providing Family Literacy Services to 75 families at the UMC, but no such services were actually undertaken.

The audit also identified expenditures totaling $35,424 reimbursed to Rainbow but clearly unrelated to the funded program. This sum included a laptop computer that was reported to be at Rainbow’s owner’s personal residence, tuition and registration fees for the owner’s children to participate in jujitsu and junior gym at a local college, as well as, equipment for a day care center operated by Rainbow’s owner.

The audit attributed these deficiencies to ineffective oversight by the New York State Education Department (SED) officials.

A prior audit of certain grants awarded by the state Office of Children and Family Services (OCFS) to New York City-based child centers found that many such centers misused government funds and did not provide all contracted services. A copy of this audit report can be found here. As a result, Rainbow was assessed to be a high risk organization and an audit was initiated.

Rainbow Rhymes Learning Center was hired as a contractor by SED. It was established, in part, to help students, who may attend low performing schools, meet state and local academic achievement standards in subjects like reading and mathematics.

DiNapoli’s auditors recommended the SED:

  • Recover the $473,815 in unsupported and inappropriate Rainbow claims identified in the audit report.
  • Review the $166,665 in payments to Rainbow that were not included in the audit. Recover those payments that are neither supported, nor appropriate.
  • Develop and implement a monitoring system that would help ensure that contract related payments are supported and appropriate, and that all contract-related services are provided. If significant contracted services are not being provided, revise contract dollars to address the actual number of children and families served.

In response to the audit report, SED officials stated that they agreed with each recommendation and outlined their plans to implement them.

Click here for a copy of the audit.

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