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August 23, 2010

DiNapoli: State Potentially Paid $883,000 Inappropriately to Defunct After-School Program

Defunct not-for-profit Educators for Children, Youth and Families Inc. (Educators for Children), which offered after-school services to children in New York City, may have received $883,530 in state funding it shouldn't have gotten, according to an audit released by State Comptroller Thomas P. DiNapoli.

“Educational programs are supposed to help children learn,” DiNapoli said. “Those programs are not supposed to rip off taxpayers.  The cost of after-school services and child care is already high enough without throwing this kind of behavior into the mix.”

From October 2002 through July 2007, Educators for Children received almost $3.2 million in state funding. Auditors examined $1.8 million of these payments, and found that Educators for Children could not provide support or justification for almost half ($883,530) of these payments.

Among the audit’s findings:
  • Educators for Children could not provide auditors with time and effort records, or any other payroll or personnel related documents for 19 of the employees charged to State Education Department (SED) contracts, but these employees collected $65,733 from the SED;
  • Educators for Children requested that SED reimburse it for $20,137 in expenses that they had already been reimbursed for; and
  • Under State Office of Children and Family Services (OCFS) contracts, Educators for Children could not provide auditors with supporting documentation for over 98 percent ($196,170) of the total $199,278 on its expenditure reports.

DiNapoli’s auditors blamed these problems on extremely weak oversight and a virtually inactive board of directors. Furthermore, the contract awarding agencies did not actively monitor contract operations.

DiNapoli’s auditors recommended that SED and OCFS:
  • Recover the respective payments made to Educators for Children for the unsupported and inappropriate claims.
  • Investigate the support and propriety of the $1.4 million paid to Educators for Children that was not included in the audit.
  • Review contract oversight procedures for grant recipients and determine how they can be strengthened to address the conditions cited in DiNapoli’s report.

A copy of the full audit, including the OCFS and SED response, can be found here.



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