Objective

To determine whether the costs reported by Helen Keller Services for the Blind (Helen Keller) 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 Helen Keller’s CFR 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

Helen Keller is a New York City-based not-for-profit organization authorized by SED to provide Special Class (over 2.5 hours per day) education services to children with disabilities who are between the ages of 3 and 5 years. For purposes of this report, this program is referred to as the SED preschool cost-based program. In addition, Helen Keller operates other SED-approved programs, such as Evaluations, 1:1 Aides, and a New York State Department of Health Early Intervention program. However, payments for services under these other programs are based on fixed fees, as opposed to the cost-based rates established through financial information reported on CFRs. Helen Keller also operated New York State Office for People with Developmental Disabilities (OPWDD) programs, primarily funded through New York State Medicaid. During the fiscal year ended June 30, 2021, Helen Keller served approximately 50 students in the SED preschool cost-based program.

Helen Keller falls under the umbrella organization of Helen Keller Services, which comprises of two divisions: Helen Keller and the Helen Keller National Center for DeafBlind Youth and Adults (National Center) that provides customized training and support for individuals in the greater New York area and across the United States.

New York City Public Schools (NYCPS) refers students to Helen Keller based on clinical evaluations and pays for its services using rates established by SED. The rates are based on the financial information Helen Keller reports to SED on its annual CFRs. For the 3 fiscal years ended June 30, 2021, Helen Keller reported approximately $10 million in reimbursable costs for the SED preschool cost-based program.

Key Findings

For the 3 fiscal years ended June 30, 2021, we identified $1,337,765 in reported costs that did not comply with the requirements in the RCM and the CFR Manual, as follows:

• $636,513 in rent-related costs including unsupported or insufficiently supported additional landlord charges for building operations ($401,932) and overallocated rent ($234,581).
• $227,326 in non-program-related personal service costs. The documentation provided by Helen Keller officials indicated the employees worked for the National Center, the Early Intervention program, or the 1:1 Aide program.
• $139,046 in compensation costs for three employees whose salaries were overallocated to the SED preschool cost-based program.
• $124,258 in non-program-related other than personal service (OTPS) expenses. The documentation provided by Helen Keller officials indicated the costs were associated with the National Center or the Early Intervention program.
• $110,410 in contracted service costs that were either not supported or not sufficiently supported.
• $41,499 in miscellaneous ineligible or undocumented OTPS costs.
• $36,447 in unsupported compensation costs that did not reconcile with supporting payroll documents.
• $22,266 in one-time payments that were not in compliance with the requirements in the RCM, including bonuses ($11,738), severance pay ($6,242), and vacation pay ($4,286).

Key Recommendations

To SED:

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

To Helen Keller:

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