Special Education

Section 200.18 Fiscal audits of approved programs operated by private providers, special act school districts, boards of cooperative educational services and public school districts receiving public funds for the education of students with disabilities ages 3 to 21 who have been enrolled pursuant to articles 81 and 89 of the Education Law*

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(a)   Fiscal audits of all approved programs performed by the commissioner, the Office of the State Comptroller, other State agencies or agencies of other states.

(1) All approved programs shall be subject to audit by the State.  All such audits performed by the department shall be conducted in accordance with generally accepted auditing standards.  Where other State agencies or the agencies of other states are involved in the funding of approved programs, any audits conducted by such agencies, and available to the program, shall be made available to the department upon written request to the program.

(2) Access to all records, property and personnel related to approved programs shall be provided during an audit.  Access shall also apply to program costs allocated to approved programs.  Such cost allocations to related programs are also subject to audit.

(3) Approved programs shall be provided a draft report on the results of the audit for review and comment.  The chief school official of the approved program or an individual designated by the official shall reply in writing to a draft State audit within 30 days of its receipt and may request a conference.  The draft audit report shall be considered final if no reply is received within 30 days.

(b)   Fiscal audits of approved preschool programs and services approved under section 4410 of the Education Law performed by the municipality and accepted by the commissioner.

(1) Each municipality, or, in addition, in the case of a city having a population of one million or more, the board of education of the city school district of such city, may perform fiscal audits of approved preschool programs and services for which it bears fiscal responsibility.  Access to all records, property and personnel related to approved programs shall be provided during an audit.  Access shall also apply to program costs allocated to approved programs.  Such cost allocations to related programs are also subject to audit.

(2) Prior to conducting an audit of an approved preschool program, a municipality shall ascertain that neither the state nor any other municipality has performed a fiscal audit of the same services or programs within the current fiscal year for such program.  If it is determined that no such audit has been performed, the municipality shall inquire with the department to determine which other municipalities, if any, bear financial responsibility for the services or programs to be audited and shall afford such other municipalities an opportunity to recommend issues to be examined through the audit.  Municipalities completing such audits shall provide copies to the department, the provider of the services and programs and all other municipalities previously determined to bear financial responsibility for the audited services and programs.  No other municipality may conduct an additional fiscal audit of the same services or programs during such current fiscal year for such program.  Municipalities shall submit to the department for approval a detailed audit plan and audit program for the proposed audit; provided that for any audit commenced on or after May 28, 2013, municipalities shall submit to the department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the department on or after such date

(3) Upon approval of the audit program and audit plan by the commissioner, the municipality may conduct audits in conformance with generally accepted auditing standards.  Commissioner approval of an audit program and audit plan shall be valid for a period of five years from the date of approval.  Municipalities need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the commissioner.  However, modifications to the approved audit plan and audit program shall be submitted to the department for review and approval and new approval must be obtained once the five year approval period has concluded.

(4) Once the audit is completed, a draft of the audit report shall be submitted to the commissioner for review and/or resolution.  In order to be approved by the commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the department.  Upon approval, the audit shall be considered a State audit for the purposes of establishing the tuition rate based on audit.

(5) Municipalities completing audits pursuant to this subdivision must provide copies to the department, the provider of the services and programs and all other municipalities previously determined to bear financial responsibility for the audited services and programs.

(6)  No other municipality may conduct an additional fiscal audit of the same services or programs during such current fiscal year for such program.

(c) The establishment of tuition rates and repayment of funds resulting from audits performed in accordance with subdivision (a) or (b) of this section.  (1) A final audit report shall be issued for each such audit.  The final audit report shall be used to establish tuition rates based on audit.  The rates based on audit shall be developed by the commissioner and certified by the Director of the Budget.

(2) Upon the certification of the rate based on audit, any overpayment will be reimbursed to the appropriate school district, local agency or municipality by the approved program, or any underpayment will be paid by the appropriate school district, local agency or municipality to the approved program.  Any overpayment or underpayment to the appropriate school district, local agency or municipality by the State shall be adjusted accordingly upon certification of the rate based on audit.

(3) All such payments due between the approved program and the appropriate school district, local agency or municipality shall be paid as soon as notification of the final certified rate based on audit is received by the program, unless the program and the school district or local agency or municipality agree to a longer repayment period.  If amounts that are to be repaid are substantial and result from good faith errors or interpretive differences relating to the audit findings, the school district, local agency or municipality may agree to such longer repayment periods as are reasonable under the circumstances.

* Includes all amendments through July 2013

Last Updated: July 31, 2013