2016 Preschool Special Education Audit Initiative Annual Report Issued

2016 Preschool Special Education Audit Initiative Annual Report Issued

The OSC has issued its 2016 Annual Report on Preschool Special Education Audit Initiative. This is the summary of all the reports issued by the OSC during 2016. Through December 2016, the OSC has completed and issued 89 audits of special education providers, including 26 issued during 2016. To date the findings have been approximately 5.5% of total claimed expenses, with current audits having significant lower findings than in the past (2.91% in fiscal 2016). In addition, there were 22 additional audits in progress at the time the report was issued. With over 200 agencies that have still not received their audit notice, it will be difficult for the OSC to complete all the audits by the end of 2018 as mandated by State legislation.

The types of findings in 2016 was consistent with many of the findings that the OSC has had in the past:

Personal Service-Related Findings:

  • Unsupported or ineligible payroll expenses (69%)
  • Unsupported bonuses (42%)

Other Than Personal Services:

  • Unsupported/Ineligible Costs (85%)
  • Expenses claimed from other programs (45%)
  • Penalties, interest, and late fees (42%)
  • Vehicle-related expenses (38%)
  • Consultant services (27%)


  • Incorrect allocation of expenses (23%)
  • Errors in depreciation, amortization and accruals (27%)
  • Undisclosed less-than-arms-length transactions (12%)
  • Inadequate Board oversight (9%)

Of the 26 audits completed during 2016, 16 of the audits were limited to 1 year with the other 10 being 3 year audits. 6 of the audits completed in 2016 were New York/Long Island agencies (all 3 year audits); 5 of the audits were Westchester agencies (2 were 3 year audits); and 15 audits covered the rest of the State (2 were 3 year audits).

Kenneth R. Cerini, CPA, CFP, FABFA

Kenneth R. Cerini, CPA, CFP, FABFA

Managing Partner

Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.


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