All My Children Day Care – Compliance With the Reimbursable Cost Manual

Issued Date
June 08, 2022
State Education Department (Preschool Special Education Audit Initiative)


To determine whether the costs submitted by All My Children Day Care (AMC) on its Consolidated Fiscal Reports (CFRs) were reasonable, necessary, directly related to the special education program, and sufficiently documented pursuant to the State Education Department’s (SED) guidelines, including the Reimbursable Cost Manual (RCM). The audit covered the costs submitted by AMC to SED on its CFRs for the fiscal years ended June 30, 2013 and June 30, 2015 and certain expenses for the fiscal year ended June 30, 2014.

About the Program

AMC is a New York City-based not-for-profit organization authorized by SED to provide Special Education Itinerant Teacher (SEIT) services to children with disabilities who are between the ages of 3 and 5 years. AMC also operated other programs, including the New York City Administration for Children’s Services’ Early Learn program. During the 2014-15 school year, AMC served approximately 785 students.

The New York City Department of Education refers students to AMC and pays for its services using rates established by SED. The rates are based on the financial information AMC reports to SED on its annual CFRs. For the 3 fiscal years ended June 30, 2015, AMC reported approximately $8 million in reimbursable costs for its SEIT program.

Key Findings

AMC failed to provide certain key documents it should have retained to support the expenses claimed on its annual CFRs. For fiscal year 2012-13, AMC did not provide any support for its claimed expenses and admitted commingling program funds – a practice that is not in compliance with its own stated policy. For fiscal year 2013-14, some of the supporting information AMC provided to us differed from information it provided to SED. For fiscal year 2014-15, AMC only provided support for a modified CFR that was never accepted by SED. As a result of these significant internal control weaknesses at AMC for the 3 fiscal years ended June 30, 2015, we recommend SED disallow $5,300,127 in reported costs that did not comply with the requirements in the RCM, including:

  • $3,118,238 in unsupported costs for fiscal year 2014-15. AMC did not provide a reconciliation between the general ledger and the CFR that was used by SED to calculate AMC’s reimbursement rate for that year; therefore, we could not conduct a review of the claimed expenses.
  • $1,806,360 in unsupported costs for fiscal year 2012-13. AMC did not provide the general ledger and reconciliation between the general ledger and CFR; as a result, we could not conduct a review of the claimed expenses.
  • $301,014 in non-reimbursable salaries and fringe benefits for 2013-14, including $175,672 in compensation costs for three employees for whom AMC did not provide time records, $111,436 related to conflicting information provided to SED and OSC in support of agency administration salaries, and $13,906 in other non-allowable fringe benefit costs.
  • $74,515 in non-reimbursable other than personal service (OTPS) costs for fiscal year 2013-14, including $47,710 for costs (e.g., rent, utilities, repairs) related to non-approved SEIT sites, $11,992 for charitable contributions, and $14,813 for other ineligible OTPS costs.

Key Recommendations


  • Review the recommended disallowances identified by our audit and make the necessary adjustments to the costs reported on AMC’s CFRs and to AMC’s tuition reimbursement rates, as warranted.
  • Remind AMC officials of the pertinent SED requirements that relate to the deficiencies we identified.


  • Ensure that costs reported on annual CFRs fully comply with SED’s requirements and communicate with SED to obtain clarification, as needed.

Kenrick Sifontes

State Government Accountability Contact Information:
Audit Director:Kenrick Sifontes
Phone: (212) 417-5200; Email: [email protected]
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236