Yeled v’Yalda Early Childhood Center – Compliance With the Reimbursable Cost Manual

Issued Date
December 31, 2015
State Education Department (Preschool Special Education Audit Initiative)


To determine whether the costs reported by Yeled v’Yalda Early Childhood Center (Yeled) on its Consolidated Fiscal Reports (CFRs) were properly documented, program-related, and allowable pursuant to the State Education Department’s (SED) Reimbursable Cost Manual (Manual). The audit included all expenses claimed on Yeled’s CFR for the fiscal year 2013-14, and certain expenses claimed on Yeled’s CFRs for the two fiscal years ended June 30, 2013.


Yeled is a Brooklyn, New York-based not-for-profit organization that is authorized by SED to operate, among other SED-approved programs, a Special Education Itinerant Teacher (SEIT) program to serve disabled children between the ages of three and five years. During the 2013- 14 school year, Yeled provided SEIT services to 1,582 students. The New York City Department of Education (DoE) refers students to Yeled based on clinical evaluations and pays for its services using rates established by SED. The rates are based on the financial information that Yeled reports to SED on its annual CFRs. SED reimburses DoE for a portion of its payments to Yeled based on statutory rates. For the three fiscal years ended June 30, 2014, Yeled reported approximately $81 million in reimbursable costs for the audited program.

Yeled also operates numerous other programs, such as Head Start, Infant/Toddler Early Intervention, and Women, Infants, and Children (WIC).

Key Findings

For the three fiscal years ended June 30, 2014, we identified $2,950,518 in reported costs that did not comply with the Manual’s requirements and recommend such costs be disallowed. These ineligible costs included $1,026,139 in personal service costs and $1,924,379 in other than personal service (OTPS) costs. Among the disallowances we identified were:

  • $1,062,157 in OTPS costs related to non-approved SEIT sites. The ineligible costs include mortgage interest, depreciation, and other costs related to 20 sites that were not approved by SED;
  • $683,915 in non-program related OTPS costs. The ineligible costs pertained to a Head Start program, an Early Intervention program, a portion of a building Yeled leased to a medical center, and other non-SEIT related programs;
  • $571,929 in salaries and fringe benefits for employees who did not work for the SEIT program. According to Yeled time records, job descriptions, cost allocation sheets, and personnel records, certain employees worked as administrators for other affiliated programs, such as the WIC program, a Fitness Center, Early Intervention, Evaluations, Head Start, and Early Head Start;
  • $215,528 in excessive allocation of shared employees; and
  • $74,025 in vehicle expenses not supported by usage logs.

Key Recommendations


  • Review the recommended disallowances resulting from our audit and make appropriate adjustments to the costs reported on Yeled’s CFRs and to Yeled’s reimbursement rates.
  • Work with Yeled officials to help ensure their compliance with Manual provisions.

To Yeled:

  • Ensure that costs reported on future CFRs comply with the requirements in the Manual.

Other Related Audits/Reports of Interest

Whitestone School for Child Development: Compliance With the Reimbursable Cost Manual (2014-S-38)
Institutes of Applied Human Dynamics: Compliance With the Reimbursable Cost Manual (2014- S-39)

Frank Patone​​​​​​​

State Government Accountability Contact Information:
Audit Director: Frank Patone
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