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Long Island

Comptroller: 2 LI providers overbilled state $1M for special education

Metro Therapy, among other businesses located inside this

Metro Therapy, among other businesses located inside this building located at 1363 Veteran Memorial Hwy. in Hauppauge on Jan. 12, 2015. Photo Credit: James Carbone

Special-education service providers overbilled the state by more than $20 million last year, according to the latest round of audits meant to crack down on the misuse of funds.

Two of the organizations served Long Island and were reimbursed more than $1 million in disallowed expenses, according to Comptroller Thomas P. DiNapoli, who released the findings Monday.

Unlike other states, preschool special-education services in New York often are delivered by private providers, not local school districts. In June 2012, DiNapoli's office announced an audit initiative focusing on these groups, and has since found several cases of "waste, abuse, and in some cases, criminal conduct."

According to Monday's announcement, Metro Therapy Inc., of Hauppauge, billed the state for $357,063 in "excessive allocations of salaries and fringe benefits," along with $185,512 to people who did not provide reimbursable services.

It also charged the state for $66,636 in other uncovered costs, including "unreasonable travel expenses," the audit found.

Frederick Berman, an attorney representing Metro Therapy, said the reimbursement policies are highly technical and that DiNapoli's office misconstrued them.

"We think the comptroller is wrong on every issue," he said.

In another case, TheraCare Preschool Services Inc., a for-profit group that works with children between 3 and 5 years old, charged the state for $474,080 in non-reimbursable bonus payments and $76,766 in "unnecessary and inappropriate" recruitment costs.

John Calderon, TheraCare's chief executive, said DiNapoli misinterpreted the state's complex funding guidelines.

"They missed it," said Calderon, whose company stopped serving Long Island more than five years ago. "They didn't get it right."

He said he's confident the state Education Department will concur. Both audits focused on three fiscal years ending June 30, 2011.

A spokesman for the comptroller's office said DiNapoli stands by the findings and that "the audits speak for themselves."

DiNapoli's office has completed 40 such reviews during the past decade and has found that the state overpaid some $42 million.

Fifteen of the audits revealed bonuses provided without required documentation, while 19 found that payroll records were not properly kept.

Half of those audited sought state reimbursement for personal expenses; $1.7 million paid for vehicles, travel, apartment rentals, jewelry, entertainment and cellphones, among other items, the comptroller said.

For example, All Services For Kids Inc., a Queens-based group, charged the state for rental expenses, cellphone usage by the executive director's minor children, unaccounted-for equipment and cable television, DiNapoli said.

The comptroller aims to examine the records for every provider of special-education services for preschool children with disabilities at least once by March 2018.

The state Education Department, which is responsible for recouping the money, has agreed to implement all of DiNapoli's recommendations.

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