Life Skills Home Training Tutorial Program for Preschoolers, Inc. – Compliance With the Reimbursable Cost Manual

Issued Date
December 17, 2021
State Education Department (Preschool Special Education Audit Initiative)


To determine whether the costs reported by Life Skills Home Training Tutorial Program for Preschoolers, Inc. (Life Skills) on its Consolidated Fiscal Reports (CFRs) were reasonable, necessary, directly related to the special education programs, and sufficiently documented pursuant to the State Education Department’s (SED) Reimbursable Cost Manual (RCM) and the Consolidated Fiscal Reporting and Claiming Manual (CFR Manual). The audit focused primarily on expenses claimed on Life Skills’ CFR for the fiscal year ended June 30, 2018 and certain expenses claimed on its CFRs for the 2 fiscal years ended June 30, 2017.

About the Program

Life Skills is a New York City-based not-for-profit organization authorized by SED to provide full-day Special Class, half-day Special Class, and Integrated Preschool Special Education services to children with disabilities who are between the ages of 3 and 5 years. For the purposes of this report, these programs are collectively referred to as the SED preschool cost-based programs. Life Skills also operated two other SED-approved preschool special education programs (Evaluations and 1:1 Aides). However, payments for services under these programs are based on fixed fees.

During the 2017-18 school year, Life Skills served approximately 279 students. The New York City Department of Education refers students to Life Skills and pays for its services using rates established by SED. The rates are based on the financial information Life Skills reports to SED on its annual CFRs. For the 3 fiscal years ended June 30, 2018, Life Skills reported approximately $19 million in reimbursable costs for the SED preschool cost-based programs.

Key Findings

For the 3 fiscal years ended June 30, 2018, we identified $278,815 in reported costs that did not comply with the requirements in the RCM and the CFR Manual, including:

  • $117,807 in expenses that were reported in the incorrect reporting period, including $111,213 in accounting expenses, $5,996 in information technology expenses, and $598 in other miscellaneous expenses.
  • $77,832 in compensation expenses that exceeded the average regional levels.
  • $34,319 in insufficiently documented and unsupported expenses, including $33,108 in accounting services that were not adequately documented and $1,211 in other unsupported expenses.
  • $20,682 in employee benefit and pension expenses that did not meet reimbursement requirements.
  • $10,281 in unallowable expenses, including $4,990 in ineligible security deposit expenses, $2,387 in personal cell phone expenses, $1,922 in late fees associated with utilities and payroll expenses, $672 in ineligible graduation gifts to students, and $310 in food provided to staff/parents.
  • $9,332 in excessive compensation expenses. Three employees received more compensation than what was approved by Life Skills’ Board of Directors.
  • $8,562 in overallocated utility expenses.

Key Recommendations


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

To Life Skills:

  • 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