WESTERLEIGH — A group that runs two special education preschools on Staten Island wrongfully claimed nearly $1 million in expenses to pay for liquor, parties and bonuses that it didn't pay to its staff, the state comptroller said.
Comptroller Thomas DiNapoli said Gingerbread Learning Center Inc., which runs preschools in Westerleigh and Arden Heights, claimed $621,356 in personal costs and $321,642 in other costs over three years that didn't qualify for reimbursements from the state.
"This special education provider ignored the rules and abused taxpayer dollars meant to educate New York’s most vulnerable children," DiNapoli said in a statement.
"We have referred our findings to the State Education Department for recovery of this money."
Through the fiscal years, Gingerbread — which serves about 145 students aged three to five — filed for reimbursements for $75,000 in bonuses it never paid to staff, purchases at Costco, insurance for the executive director's car, $1,687 in liquor store purchases and $7,693 for gifts, according to DiNapoli.
In a letter sent to the auditors, a lawyer for Gingerbread disagreed with the findings, saying it provided documentation for many of the expenses and found fault with the audit process itself.
"Gingerbread believes that [the Office of the New York State Comptroller's] 'audit' was not really an audit at all, but rather was conducted from the outset as an investigation, which OSC had no authority to do," the lawyer wrote.
"Rather than sharing concerns and issues with Gingerbread's management as the audit team examined records, in a collaborative effort to arrive at an accurate report, as an audit is supposed to be conducted, there was an obvious effort on the audit team's part to prevent Gingerbread's management from knowing what the audit team's concerns were."
The audit was triggered after Gingerbread reported about $12.2 million in reimbursable costs for its program for fiscal year 2012 to 2013.
When the state found a pattern of "inappropriate expenses," it extended the audit to include fiscal years 2010-2011 and 2011-2012, DiNapoli said.
DiNapoli recommended the state's Education Department review the disallowances and make adjustments to Gingerbread's fiscal reports and reimbursement rates.
