Audit: $875,000 in exec bonuses was too much for special ed program

New York State Comptroller Thomas DiNapoli, March 14, New York State Comptroller Thomas DiNapoli, March 14, 2012. Photo Credit: Newsday / Audrey C. Tiernan

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A for-profit provider of special education services in Suffolk and other downstate locations should not have used public funds to pay $875,000 in bonuses and executive compensation over three years, state Comptroller Thomas DiNapoli said Wednesday.

DiNapoli said in a statement his audit of TheraCare Preschool Services Inc. is part of a special program examining preschool service suppliers that has "found a continuing pattern of abuse."

"Taxpayer dollars meant for children with special needs are being wasted. This has to stop," he said.

TheraCare's executive director, chief financial officer and assistant executive director reaped nearly $317,000 more than the "regional median compensation" the state allows, the audit found.

And the Manhattan corporation improperly paid $253,000 in bonuses because they were not based on employee performance, as is required, but on meeting budget targets.

"We are very confident in the end that TheraCare's positions will be vindicated," Frederick J. Berman, a lawyer for TheraCare, said in an interview. In a written response to DiNapoli's office, he disagreed with almost all of the audit's conclusions.

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A spokesman for TheraCare, which served 651 preschoolers in the 2010 to 2011 school year, had no comment. The company sought about $50 million in reimbursement of expenses in the three fiscal years that ended June 30, 2011, DiNapoli said.

Its locations include Islandia, Staten Island, the Bronx and Manhattan, its website shows.

The state Education Department said it agreed with DiNapoli's recommendations, which include more training for providers, and had "removed" nearly $166,000 of TheraCare's executive compensation.

Education Department spokesman Dennis Tompkins said whether more funds would be disallowed is not yet known. "Our Rate Setting Unit will take the comptroller's audit findings and issue an audit rate that will withhold the appropriate funds," he said in an email.

DiNapoli also said TheraCare teachers should not have received almost $221,000 for promising to stay at least one year.

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