Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

July 1, 2013 – June 30, 2015

2016M-47

Unadilla Valley Central School District

Special Education Services

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofDistrictOfficials 3

SPECIAL EDUCATION SERVICES 4

APPENDIX A ResponseFromDistrictOfficials 6APPENDIX B Audit Methodology and Standards 8 APPENDIX C How to Obtain Additional Copies of the Report 9 APPENDIX D LocalRegionalOfficeListing 10

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability April2016

DearSchoolDistrictOfficials:

AtoppriorityoftheOfficeoftheStateComptrolleristohelpschooldistrictofficialsmanagetheirdistrictsefficientlyandeffectivelyand,bysodoing,provideaccountabilityfor taxdollarsspent tosupportdistrictoperations.TheComptrolleroverseesthefiscalaffairsofdistrictsstatewide,aswellasdistricts’compliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversight is accomplished, in part, throughour audits,which identify opportunities for improvingdistrict operations and Board of Education governance. Audits also can identify strategies to reduce district costs and to strengthen controls intended to safeguard district assets.

Following is a report of our audit of theUnadillaValleyCentral SchoolDistrict, entitledSpecialEducationServices.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.

Thisaudit’sresultsareresourcesfordistrictofficialstouseineffectivelymanagingoperationsandinmeetingtheexpectationsoftheirconstituents.Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedattheendofthisreport.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Background

Introduction

Objective

Scope andMethodology

The Unadilla Valley School District (District) is located in fivetowns inChenangoCounty, four towns inOtsegoCountyandonetown in Madison County. The District is governed by the Board of Education (Board),which is composed of seven electedmembers.The Board is responsible for the general management and control of theDistrict’sfinancialandeducationalaffairs.TheSuperintendentofSchools(Superintendent)istheDistrict’schiefexecutiveofficerandisresponsible,alongwithotheradministrativestaff,fortheDistrict’sday-to-day management under the Board’s direction.

TheDistrict operates one schoolwith approximately 900 studentsand160 employees.TheDistrict’s budgeted appropriations for the2015-16 fiscal year are $18.6million,which are funded primarilywithStateaidandrealpropertytaxes.

The District provided in-house special education programs and relatedservicesto18studentsin2013-14and24in2014-15insteadof contracting with an alternative authorized special education provider, such as the Board of Cooperative Educational Services(BOCES),otherschooldistrictsorprivatespecializedfacilities.TheDistrict is a component unit of the Delaware-Chenango-Madison-Otsego (DCMO) BOCES and generally contracts with this BOCES for special education services it cannot provide itself.1 Total special education costs, which include services provided in-house and atalternativeproviders,were$1.7millionin2014-15.

The objective of our audit was to determine whether the District provided special education services in a cost-effective manner. Our auditaddressedthefollowingrelatedquestion:

• Are District officials providing in-house special educationservices to students in a cost-effective manner?

We examined theDistrict’s financial records for special educationservices for the period July 1, 2013 through June 30, 2015. WeexpandedourscopebacktoJuly1,2011tofurtheranalyzetrendsandchanges in special education costs.

1 The District also contracted with the following providers for services it could not providein-housein2013-14or2014-15:GeorgeJuniorRepublicSchool,UpstateCerebral Palsy, Vanderheyden, New York School of the Deaf, CooperstownCentral School District and the Children’s Home of Wyoming Conference.

33Division of LocaL Government anD schooL accountabiLity

Comments ofDistrict Officials

We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthe value and/or size of the relevant population and the sample selectedforexamination.

TheresultsofouraudithavebeendiscussedwithDistrictofficials,andtheircomments,whichappearinAppendixA,havebeenconsideredinpreparingthisreport.Districtofficialsagreedwiththefindingsinthe report.

4 Office Of the New YOrk State cOmptrOller4

Special Education Services

FederalandState lawsand regulations require that schooldistrictsprovide special education programs for students with disabilities. Districtofficialshavearesponsibilitytoprovidetheseservicesinacost-effectivemannertoensuretaxdollarsarespentinaprudentandeconomicalmanner.Officialscanchoosetoprovidetheseeducationalservices in-house or contract with an alternative authorized provider2 for these services.

District officials provided special education services to Districtstudents in a cost-effective manner and saved the District a total of approximately$339,000inprogramandrelatedservicescostsduringthe2013-14and2014-15fiscalyears.Inaddition,theDistrictprovidedservicestostudentsinaneighboringdistrictandreceived$60,000intuition revenue during this same time period. We commend District officials for providing cost-effective special education services tostudents. Prior to the District’s current administration, DCMO BOCESdiscontinued operating two special education service classrooms housed at the District. The District began operating these classrooms toprovidespecialeducationservicesusingDistrictstaff.Inthe2013-14 fiscal year, the District implemented a third special educationclassroom,acceptedstudentsfromoutsidetheDistrictandexpandedits special education programs to include related services such as occupational and speech therapies. We compared the District’s in-house costs to provide these services to the lowest cost alternative provider’s3tuitionrateandfoundthattheDistrictsavedapproximately$339,000overthesetwoyears.

2 SuchasBOCES,otherschooldistrictsorprivatespecializedfacilities3 We assumed the lowest alternative provider had capacity to accept the in-house

students and would provide an appropriate learning environment.

Figure 1: Cost SavingsClass 2013-14 2014-15 Total

In-house $488,788 $540,469 $1,029,257

Lowest Alternative $539,064 $829,416 $1,368,480

Savings $50,276 $288,947 $339,223

Inaddition,theDistrictprovidededucationalservicestoonestudentin2013-14andtwostudentsin2014-15fromaneighboringdistrictatatuitionrateof$20,000perstudent.Wedeterminedthatthetuition

55Division of LocaL Government anD schooL accountabiLity

rate charged was appropriate for recovering the costs to the District for providing these programs and related services.

District officials developed these in-house programs because theywanted to continue offering special education within the District and makeuseoftheclassroomsDCMOBOCESvacated.Districtofficialsreview the special education student population annually to determine if there is capacity for additional classrooms. They determined that there was capacity and resources to add another program level beginninginthe2013-14fiscalyear.Asaresultofprovidingspecialeducationservicesin-house,theDistrictisabletocontinuerealizingcost savings for its own students and generate tuition revenue. Inaddition, this approach saved the costs of transporting students toother locations and kept the children in their home school.

6 Office Of the New YOrk State cOmptrOller6

APPENDIX A

RESPONSE FROM DISTRICT OFFICIALS

TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpage.

77Division of LocaL Government anD schooL accountabiLity

8 Office Of the New YOrk State cOmptrOller8

APPENDIX B

AUDIT METHODOLOGY AND STANDARDS

Toachieveourauditobjectiveandobtainvalidevidence,weperformedthefollowingprocedures:

• WeinterviewedDistrictofficialsconcerningtheestablishmentofspecialeducationandrelatedservices within the District. We reviewed the District’s cost analysis regarding the establishment of these services for reasonableness.

• Wecalculated thedirectcostsofspecialeducationservicesofferedby theDistrict, suchassalaries,benefits,materials,suppliesandtextbooks.Wealsoallocatedtherelatedservicescostsbased on the number of therapy sessions provided as a percentage of total sessions to each classroom.

• We compared the total costs of special education classrooms operated by the District to the tuition rate charges to verify that the District is recovering the costs for any students attending from other districts.

• We selected alternative providers the District used for other students during the audit scope. WeobtainedtuitionratesforalternativeprovidersthrougheithertheNewYorkStateEducationDepartment’s Rate Setting Unit or from the rates listed on the providers’ invoices. We compared these costs to our calculation of costs to determine the cost savings.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.

99Division of LocaL Government anD schooL accountabiLity

APPENDIX C

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:

10 Office Of the New YOrk State cOmptrOller10

APPENDIX DOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:Muni-Binghamton@osc.state.ny.us

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:Muni-Buffalo@osc.state.ny.us

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOne Broad Street PlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:Muni-GlensFalls@osc.state.ny.us

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:Muni-Hauppauge@osc.state.ny.us

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:Muni-Newburgh@osc.state.ny.us

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:Muni-Rochester@osc.state.ny.us

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:Muni-Syracuse@osc.state.ny.us

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313