Maragos: Plainview for-profit school had fiscal irregularities

Nassau County Comptroller George Maragos at his Massapequa Nassau County Comptroller George Maragos at his Massapequa office on March 19, 2013. Photo Credit: Howard Schnapp

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Nassau County Comptroller George Maragos is asking the state to suspend a for-profit Plainview school that provides early intervention services for children with disabilities after auditors discovered "troublesome" irregularities with the company's books.

In a report issued Tuesday, Maragos said All About Kids, with offices in Nassau and Suffolk, sought reimbursement from the county for non-allowable expenses, including preparation of the owner's personal tax returns.

Maragos said the school paid 16 individuals as both employees and independent contractors -- potentially leading to duplicate billing.

The suspension was sought by JoAnn Greene, the comptroller's director of field audits, in an April 16 letter to the state Education Department and Comptroller's Office.

Mark Johnson, a spokesman for state Comptroller Thomas DiNapoli, said the office was reviewing the report. A state education spokesman did not respond to a request for comment.

All About Kids owner Michael Grossfeld disputed the county's findings. "Everything in the letter is false," he said, declining to elaborate.

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The Mid-Island Therapy Association, which operates under the name All About Kids, is among the schools approved by the state to provide special education services for children with developmental delays. According to the school's attorney, Frederick Berman, All About Kids provided services to more than 6,341 children in the past year.

Nassau, which paid All About Kids $17.2 million from 2008-2012, is partially reimbursed by the state for preschool and early intervention services.

Greene said the county initiated the audit after the state lowered the school's reimbursement rate because of "discrepancies" on state filings.

Auditors attempted to review Nassau's contract with All About Kids, but Greene said the school used "various delay tactics" and "failed to meaningfully cooperate" with the review.

Auditors were initially told that school staff "were extremely busy" and not available for interviews, the report said. The firm also tried to redact legal invoices based on an attorney-client privilege defense, the report said.

In March 2013, a Nassau Supreme Court justice denied the school's request for a temporary restraining order to block the audit. Subsequent court appeals also were denied.

All About Kids hired Park Strategies, a lobbying firm run by former Sen. Alfonse D'Amato, to lobby the county to provide the school with more time to provide requested documents.

But when the school turned over the documents, Maragos said they were incomplete, prompting the office to end the review.

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Berman issued a written response yesterdayTuesday, disputing Greene's claims as "unfounded" and filled with "half truths." He said All About Kids fully cooperated with auditors and that it was "unwarranted" to suspend the school.

Berman said the documents that Greene said were missing had actually been turned over by the school. He said a detailed response disputing the specific findings was being prepared.In its preliminary findings, auditors said they were unable to confirm that a $750,000 building rental cost allocated to the program was justifiable.

The school also failed to supply auditors with documentation verifying that 29 employees and eight independent contractors had received the necessary clearance to work on the contract. Clearance letters from 265 other employees or independent contractors was outdated, the report said.

Suffolk County also has a contract with All About Kids for early intervention and special education services and paid the firm more than $533,000 last year. County spokeswoman Vanessa Baird-Streeter said Maragos' report will be reviewed by Suffolk Comptroller Joseph Sawicki Jr.

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