DiNapoli: Mill Neck Manor Overcharged Taxpayers by More Than $280,000
Overcharges Include Extra Salary and Benefits for Director
Mill Neck Manor School for the Deaf, a Nassau County provider of special education services for children with hearing disabilities, charged taxpayers more than $280,000 it wasn’t entitled to, including extra salary and benefits for the school’s executive director, according to an audit released last week by State Comptroller Thomas P. DiNapoli.
“As we have seen in numerous audits, providers are taking advantage of lax oversight of the state’s special education programs,” DiNapoli said. “The State Education Department (SED) needs to improve its oversight of these providers to ensure public monies are being spent properly.”
DiNapoli’s auditors identified $72,505 in personal service costs charged by Mill Neck over the two-year period ended June 30, 2010, that did not comply with SED reimbursement guidelines.
Mill Neck, part of the larger Mill Neck Family of Organizations, claimed $64,817 from the state for salary paid to Executive Director Mark Prowatzke that should have come from elsewhere in the organization. Auditors also identified $7,688 in vacation costs that were claimed for reimbursement, but were not paid by the school to its employees.
DiNapoli’s auditors also found that the $89,500 charged to taxpayers by the school for depreciation expenses should not have been allowed, including $64,360 for projects that did not solicit competitive bids and were not submitted to SED for prior review and comment as required.
Another $61,348 that was charged to the state for vehicle costs was rejected because Mill Neck staff did not maintain the required vehicle logs, and auditors could not confirm business usage of the vehicles.
Mill Neck also claimed $48,063 in costs that were not program-related or were unsupported. They included: $11,934 in utilities, repairs and maintenance, and landscaping equipment expenses for the executive director’s on-campus residence; $11,314 for staff development, travel, supplies, repairs and late payment fees; $7,909 to lease a copy machine which should have been charged to other organizations within the Mill Neck Family of Organizations; and $7,409 in telephone line costs that should have been charged to other organizations within the Mill Neck Family of Organizations.
Separately, DiNapoli’s auditors identified another $10,753 in costs for contractors that should not have been reimbursed.
DiNapoli recommended that:
- SED review the inappropriate and unsupported expenses and take action to recover such reimbursed expenses; and
- Mill Neck School explain SED requirements to staff involved in the cost reimbursement processes.
For a copy of the report visit: http://www.osc.state.ny.us/audits/allaudits/093013/11s40.pdf
DiNapoli has identified fraud and improper use of funds in a recent series of audits of special education providers. There have been several criminal referrals, felony arrests, criminal convictions and hundreds of thousands of dollars in restitution made as a result of the audits. In total, 30 special education contractors have been or are being audited.
The Comptroller's recent audit of SED’s fiscal and program oversight of special education providers found that the agency has not conducted any on-site provider audits since 2007.
SED oversees special education programs for students with disabilities between the ages of 3 and 21. In addition to services provided by local school districts, these programs include services delivered to about 75,000 students by more than 300 for-profit and not-for-profit entities at an annual state cost of $1.3 billion.
For a copy of that report, visit: http://osc.state.ny.us/audits/allaudits/093013/12s103.htm