The City of New York

CITY OF NEW YORK OFFICE OF THE COMPTROLLER

John C. Liu COMPTROLLER MANAGEMENT AUDIT

Tina Kim Deputy Comptroller for Audit

Audit Report on Champion Learning Center LLC`s Compliance with the Supplemental Education Services Vendor Agreement with the

Department of Education

MD11-106A May 16, 2012



Table of Contents

AUDIT REPORT IN BRIEF .............................................................................................................1

Audit Findings and Conclusions ..................................................................................................1 Audit Recommendations..............................................................................................................2 Agency Response .........................................................................................................................2

INTRODUCTION ............................................................................................................................... 3

Background ..................................................................................................................................3 Objectives ..................................................................................................................................... 4 Scope and Methodology Statement .............................................................................................4 Discussion of Audit Results .........................................................................................................5

FINDINGS AND RECOMMENDATIONS.....................................................................................6

Questionable Payments Made to Champion................................................................................6 Tutoring Provided During School Hours and at Odd Times.................................................... 7 Recommendations..................................................................................................................... 8

Inadequate Supporting Documentation for Services Billed by Champion .................................9 Recommendations................................................................................................................... 12

Non-compliance with Other Contract Provisions......................................................................12 Student Education Plans are Not Created and Shared with Parents in a Timely Manner ..... 13 Limited Evidence that Quarterly Progress Reports Were Shared with Parents ..................... 14 Attendance Information Reported on Progress Reports is Inaccurate ................................... 15 Recommendations................................................................................................................... 15

Inadequate Monitoring of Champion`s SES Compliance by DOE...........................................16 Inadequate Controls in the Vendor Portal .............................................................................. 16 Inadequate Oversight over SES Provided at Home................................................................17 Photocopies of Enrollment Forms Found on File...................................................................18 Recommendations................................................................................................................... 19

DETAILED SCOPE AND METHODOLOGY.............................................................................21

Addendum I Department of Education Response

Addendum II Champion Learning Center, LLC Response

The City of New York Office of the Comptroller Bureau of Management Audit

Audit Report on Champion Learning Center LLC's Compliance with the Supplemental Education Services Vendor Agreement with the Department

of Education

MD11-106A

AUDIT REPORT IN BRIEF

We conducted this audit to determine whether Champion Learning Center, LLC (Champion) (1) complied with the key provisions of its No Child Left Behind (NCLB) contract with the New York City Department of Education (DOE) and (2) had adequate controls in place for providing Supplemental Education Services (SES) and processing student attendance. The audit also reviewed DOE`s monitoring of Champion`s compliance with SES requirements.

Under the Federal NCLB Act, DOE is required to offer contracts to the SES providers approved by the New York State Education Department (NYSED) that submit contract proposals. There were a total of 52 NYSED-approved providers during School Year 2009-2010, one of which was Champion. Champion contracted with DOE to offer tutoring services from September 1, 2009, through August 31, 2012, for an estimated contract amount of $40,003,578. Champion mainly offers individual home-tutoring services but is also contracted to provide group services.

Audit Findings and Conclusions

Our audit disclosed that Champion has control weaknesses, which prevented the company from adequately complying with key provisions of its contract with DOE to provide SES to eligible students. Champion had inadequate controls in place to ensure that SES was provided and student attendance was processed in accordance with program requirements. These weaknesses were compounded by DOE`s own control weaknesses, which led to inadequate monitoring of Champion`s compliance with the SES program. Champion billed and was paid by DOE for services for which there was inadequate or questionable support. Our analysis of payments made to Champion for School Years 2009-2010 and 2010-2011 identified a total of about $858,779 in questionable payments that should be investigated and, where warranted, recouped. These amounts were identified as a result of certain focused tests we conducted to identify control weaknesses. We, therefore, cannot be assured that the remaining amount that DOE paid to Champion for SES is fully supported and accurate. We also do not have reasonable assurance that the possibility of fraud is adequately controlled based on the identified weaknesses.

Office of New York City Comptroller John C. Liu

Champion did not comply with the provision of the NCLB contract requiring all SES providers to offer tutoring services only during non-school hours. In addition, we identified a number of isolated instances where Champion reported that it provided services to students at odd times (between midnight and 5:00 a.m.). In addition, Champion did not consistently obtain the required signatures before processing student attendance for reimbursement and did not ensure that the attendance information it certified was adequately supported by attendance sheets. Further, Champion did not always create and share Student Education Plans (SEPs) with parents in a timely manner and had no evidence that progress reports were shared with parents in a timely manner.

Audit Recommendations

Based on our findings, we make 13 recommendations, including that Champion should ensure that:

SES is provided only during hours allowed by the contract.

It consistently complies with the NCLB requirements and that the invoices it certifies are adequately supported by attendance sheets.

SEPs and progress reports are shared with parents in a timely manner.

We also recommend that DOE should:

Recoup the amount identified in this report for services reportedly provided between 8:00 a.m. and 2:30 p.m. on school days.

Investigate the appropriateness of the remaining payments identified in this report for services reportedly provided either during sessions that started during school hours or at odd hours and recoup any payments deemed to be unjustified.

Update its Vendor Portal validation rules to ensure accurate billing and compliance with the contract provisions and NCLB requirements.

Agency Response

DOE and Champion officials generally agreed with the audit recommendations addressed to their respective entities.

2

Office of New York City Comptroller John C. Liu

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download