Objective

To determine whether the costs reported by UCPA of Cayuga County d.b.a. E. John Gavras Center (Gavras Center) 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) Reimbursable Cost Manual (RCM) and the Consolidated Fiscal Reporting and Claiming Manual (CFR Manual). The audit focused primarily on expenses claimed on the Gavras Center’s CFRs for the fiscal year ended June 30, 2021, and certain expenses claimed on its CFRs for the 2 fiscal years ended June 30, 2020.

About the Program

The Gavras Center is a not-for-profit special education provider located in Auburn that serves students in Cayuga, Onondaga, Tompkins, and Wayne counties. The Gavras Center is authorized by SED to provide Preschool Integrated Special Class (over 2.5 hours per day) and Preschool Integrated Special Class (2.5 hours per day) 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 referred to as the SED preschool cost-based programs. The Gavras Center also operated other SED-approved preschool special education programs including Evaluations and 1:1 Aides. However, payments for services under these programs are based on fixed fees, as opposed to the cost-based rates established using CFR-reported financial information. During the 2020-21 school year, the Gavras Center served 52 preschool children in the SED preschool cost-based programs.

The counties that use the Gavras Center’s preschool special education services pay tuition to the Gavras Center using reimbursement rates set by SED. The State, in turn, reimburses the counties for a portion of the tuition paid. SED sets the special education rates based on financial information, including costs, that the Gavras Center reports to SED on its annual CFRs. For the 3 fiscal years ended June 30, 2021, the Gavras Center reported approximately $4.3 million in reimbursable costs for the SED preschool cost-based programs.

Key Findings

For the 3 fiscal years ending June 30, 2021, we identified $625,534 in reported costs that did not comply with the requirements in the RCM and CFR Manual, as follows:

• $283,756 in in-kind donations (donated rent) for the Gavras Center’s use of the building owned by Cayuga County. The donated rent was reported as an expense on its CFRs.
• $97,177 in costs where special education funds were used to fund non-disabled education program costs. According to the RCM and Section 4410(10)(e) of the New York State Education Law, public special education funding shall not be used to purchase non-disabled preschool educational services.
• $81,242 in unsupported personal service compensation costs.
• $56,565 in staffing expenses that were in excess of SED’s approved staffing ratios.
• $37,238 in unsupported general ledger entries that were reported on the CFR including $18,959 in other than personal service (OTPS) costs and $18,279 in personal service costs.
• $27,821 in fringe benefits costs that were ineligible for reimbursement.
• $18,341 in ineligible costs including $16,829 in overallocated costs, $1,350 in miscellaneous ineligible costs, and $162 in non-program-related costs.
• $16,264 in bonus compensation costs that were not in compliance with the RCM’s guidelines.
• $7,130 in vehicle costs that were not supported by vehicle logs.

Key Recommendations

To SED:

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

To Gavras Center:

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