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June 21, 2013

DiNapoli Commends Legislature for Action on Bill Calling for Tighter Oversight of Special Education Providers

State Comptroller Thomas P. DiNapoli today commended the Legislature for passing legislation mandating audits of every special education services program provider for preschool children with disabilities in the state and urged Governor Cuomo to sign the bill to ensure taxpayer monies are spent as intended and to deter further provider fraud. This legislation was a program bill of the Office of the State Comptroller and was sponsored by Sen. John Flanagan (S.5568-A) and Assemblywoman Catherine Nolan (A.7302-A).

“New York needs to greatly strengthen the oversight of special education services to preschool children, and improve transparency and accountability in how public funds are spent on students with special needs,” DiNapoli said. “Numerous audits by my office have found widespread fraud and abuse in the program, costing taxpayers millions of dollars each year, and depriving children of the resources intended for them. Students and taxpayers deserve much better than they are getting.”

In addition to mandating the Comptroller’s Office to audit all of the more than 300 preschool special education providers in this $1.3 billion program by March 31, 2018, the bill:

  • Establishes that when a special-ed preschool student is placed with a program provider that performed the student’s assessment, the committee making the recommendation for the services must certify that the placement is appropriate and notify the State Education Department (SED);
  • Provides that a provider of special services or programs shall certify that its executive director meets the criteria established by SED to be an executive director; and if paid as a full-time executive director, is employed as such and does not have any other employment which may impair his or her job performance; and
  • Directs SED to study alternative ways to calculate reimbursement to providers for their services and improve the monitoring of providers.

For a copy of the legislation, visit: http://www.osc.state.ny.us/legislation/2013-14/oscb13.htm

DiNapoli has identified extensive fraud and improper use of funds in a recent series of audits of special education providers. His office has completed 18 audits of preschool special education providers, finding nearly $20 million in unsupported or inappropriate charges. There are currently 13 additional audits of preschool special education providers in progress.

The audits have resulted so far in the arrests of four employees of two providers, two convictions and restitution of $610,000. One special education provider was convicted as an entity and fined $25,000. Six additional cases referred to law enforcement are still pending.

The Comptroller's audit of SED’s fiscal and program oversight of special education providers last year found that the agency has not conducted any on-site provider audits since 2007.

SED oversees special education programs for students with disabilities between the ages of 3 and 21. In addition to services provided by local school districts, these programs include services delivered to about 75,000 students by for-profit and not-for-profit entities at an annual state cost of $1.3 billion.

For a copy of that report, visit:
http://osc.state.ny.us/audits/allaudits/093013/12s103.htm

For audits of special education providers, visit: http://www.osc.state.ny.us/audits/auditAgencyList.htm and click on State Education Department.

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