Home » 2013 Issues » June 12, 2013 » EDU-24-13-00005-EP Fiscal Audits of Special Education Preschool Programs and Services for Which a Municipality Bears Responsibility
EDU-24-13-00005-EP Fiscal Audits of Special Education Preschool Programs and Services for Which a Municipality Bears Responsibility
6/12/13 N.Y. St. Reg. EDU-24-13-00005-EP
NEW YORK STATE REGISTER
VOLUME XXXV, ISSUE 24
June 12, 2013
RULE MAKING ACTIVITIES
EDUCATION DEPARTMENT
EMERGENCY/PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. EDU-24-13-00005-EP
Filing No. 544
Filing Date. May. 28, 2013
Effective Date. May. 28, 2013
Fiscal Audits of Special Education Preschool Programs and Services for Which a Municipality Bears Responsibility
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Proposed Action:
Amendment of section 200.18 of Title 8 NYCRR.
Statutory authority:
Education Law, sections 207(not subdivided), 4401(2), 4403(3), 4410(1)(g), (11)(c)(i), (ii) and (13); and L. 2013, ch. 57, section 24
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education of the city school district of the city of New York, that choose to perform fiscal audits of preschool special education programs and services pursuant to Education Law section 4410.
Because the Board of Regents meets at scheduled intervals, and does not meet during the month of August, the September 16-17, 2013 Regents meeting is the earliest the proposed rule could be presented for adoption, after publication of a Notice of Proposed Rule Making in the State Register and expiration of the 45-day public comment period required under the State Administrative Procedure Act (SAPA). Furthermore, pursuant to SAPA, the earliest a rule adopted at the September meeting could become effective is October 2, 2013, the date a notice of adoption is published in the State Register. However, section 24 of Chapter 57 of the Laws of 2013 directs the Commissioner to promulgate rules and regulations necessary to implement the statute within 60 days of the effective date of Chapter 57 of the Laws of 2013. Chapter 57 was signed into law on March 29, 2013 and the 60th day falls on May 28, 2013.
Emergency action is therefore necessary for the preservation of the general welfare in order to timely establish, pursuant to statutory requirements consistent with section 24 of Chapter 57 of the Laws of 2013, standards and procedures for those municipalities, and the board of education of the city school district of the city of New York, that choose to perform fiscal audits of Education Law section 4410 preschool special education programs and services.
It is anticipated that the emergency rule will be presented to the Board of Regents for adoption as a permanent rule at the September 16-17, 2013 Regents meeting, which is the first scheduled meeting after expiration of the 45-day public comment period mandated by the State Administrative Procedure Act for proposed rulemakings.
Subject:
Fiscal audits of special education preschool programs and services for which a municipality bears responsibility.
Purpose:
Implements L. 2010, ch. 57, section 24 by establishing standards and procedures for municipalities to perform fiscal audits.
Text of emergency/proposed rule:
Subdivision (b) of section 200.18 of the Regulations of the Commissioner of Education is amended, effective May 28, 2013, as follows:
(b) Fiscal audits of approved preschool programs and services approved under section 4410 of the Education Law performed by the municipality and accepted by the commissioner.
(1) Each municipality, or, in addition, in the case of a city having a population of one million or more, the board of education of the city school district of such city, may perform fiscal audits of approved preschool programs and services for which it bears fiscal responsibility. Access to all records, property and personnel related to approved programs shall be provided during an audit. Access shall also apply to program costs allocated to approved programs. Such cost allocations to related programs are also subject to audit.
(2) Prior to conducting an audit of an approved preschool program, a municipality shall ascertain that neither the state nor any other municipality has performed a fiscal audit of the same services or programs within the current fiscal year for such program. If it is determined that no such audit has been performed, the municipality shall inquire with the department to determine which other municipalities, if any, bear financial responsibility for the services or programs to be audited and shall afford such other municipalities an opportunity to recommend issues to be examined through the audit. Municipalities completing such audits shall provide copies to the department, the provider of the services and programs and all other municipalities previously determined to bear financial responsibility for the audited services and programs. No other municipality may conduct an additional fiscal audit of the same services or programs during such current fiscal year for such program. Municipalities shall submit to the department for approval a detailed audit plan and audit program for the proposed audit; provided that for any audit commenced on or after May 28, 2013, municipalities shall submit to the department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the department on or after such date.
(3) Upon approval of the audit program and audit plan by the commissioner, the municipality may conduct audits in conformance with generally accepted auditing standards. Commissioner approval of an audit program and audit plan shall be valid for a period of five years from the date of approval. Municipalities need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the commissioner. However, modifications to the approved audit plan and audit program shall be submitted to the department for review and approval and new approval must be obtained once the five year approval period has concluded.
(4) Once the audit is completed, a draft of the audit report shall be submitted to the commissioner for review and/or resolution. In order to be approved by the commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the department. Upon approval, the audit shall be considered a State audit for the purposes of establishing the tuition rate based on audit.
(5) . . .
(6) . . .
This notice is intended:
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire August 25, 2013.
Text of rule and any required statements and analyses may be obtained from:
Mary Gammon, State Education Department, Office of Counsel, State Education Building Room 148, 89 Washington Ave., Albany, NY 12234, (518) 474-6400, email: legal@mail.nysed.gov
Data, views or arguments may be submitted to:
Ken Slentz, Deputy Commissioner P-12 Education, State Education Department, State Education Building 2M, 89 Washington Ave., Albany, NY 12234, (518) 474-5520, email: NYSEDP12@mail.nysed.gov
Public comment will be received until:
45 days after publication of this notice.
This rule was not under consideration at the time this agency submitted its Regulatory Agenda for publication in the Register.
Regulatory Impact Statement
1. STATUTORY AUTHORITY:
Education Law section 207 empowers the Board of Regents and the Commissioner to adopt rules and regulations to carry out laws of the State regarding education and the functions and duties conferred on the State Education Department by law.
Education Law section 4401(2) defines special education services or programs, including related services.
Education Law section 4403 outlines the responsibilities of the Department with respect to the provision of education programs and services to students with disabilities and authorizes the Commissioner of Education to promulgate such rules and regulations pertaining to the physical and educational needs of such students as the Commissioner deems to be in their best interest.
Education Law section 4410(1)(g) defines "municipality" for purposes of the section. Education Law section 4410(11)(i) and (ii) provides that a municipality or, in addition, the board of education in a city having a population of one million or more, may perform a fiscal audit of special education programs and services for which it bears fiscal responsibility. Section 4410(13) authorizes the Commissioner to promulgate regulations to implement the provisions of Education Law section 4410.
Section 24 of Chapter 57 of the Laws of 2013 amended subparagraphs (i) and (ii) of paragraph (c) of subdivision (11) of Education Law section 4410 to direct the Department to provide guidelines on standards and procedures to municipalities and the board of education in a city with a population of one million or more, that choose to perform fiscal audits of services or programs pursuant to that section; and directs the Commissioner to promulgate rules and regulations necessary to implement section 24 of Chapter 57 of the Laws of 2013.
2. LEGISLATIVE OBJECTIVES:
Consistent with the above statutory authority, the proposed amendment is necessary to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education of the city school district of the city of New York, to perform fiscal audits of Education Law section 4410 preschool special education programs and services.
3. NEEDS AND BENEFITS:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education of the city school district of the city of New York, to perform fiscal audits of Education Law section 4410 preschool special education programs and services.
4. COSTS:
(a) Costs to the State: none.
(b) Costs to local governments: none required. Pursuant to Education Law section 4410 (11)(c)(i), municipalities and the board of education in a city with a population of one million or more are not required to perform fiscal audits of the providers but may choose to do so voluntarily. If a municipality or the board choose to perform a fiscal audit, then prior to the enactment of Chapter 57 of the Laws of 2013, section 4410(11)(c)(i) required these voluntary audits to be performed in accordance with audit standards established by the commissioner. Section 24 of Chapter 57 of the Laws of 2013 expands this provision by directing the Department to create guidelines on the standards and procedures for fiscal audits, and the proposed regulation incorporates this requirement within the existing audit standards established by the commissioner (which require an approved audit plan and audit program). Depending on the existing audit plans and audit programs, municipalities and the board of education of the city school district of the city of New York could potentially incur costs associated with developing an audit plan and program if they choose to perform a fiscal audit pursuant to Education Law section 4410 and their existing audit plan and program are not consistent with the guidelines provided by the Department as directed by section 24 of Chapter 57 of the Laws of 2013. These costs may be offset by funds that may be recovered by the municipality or board following an audit that identifies overpayments made to a provider as, pursuant to section 24 of Chapter 57 of the Laws of 2013, one hundred percent of these overpayments may be recovered.
(c) Costs to private regulated parties: none.
(d) Cost to regulating agency for implementation and continued administration of this rule: none. It is anticipated that the Department will utilize existing staff resources to develop the audit guidelines and review audit plans and programs submitted by the municipalities and board of education.
5. LOCAL GOVERNMENT MANDATES:
The proposed amendment implements section 24 of the Chapter 57 of the Laws of 2013 by requiring municipalities and the board of education of the city school district of the city of New York that choose to commence an audit on or after May 28, 2013, to submit to the Department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the Department on or after such date.
The proposed amendment also specifies that Commissioner approval of an audit program and audit plan shall be valid for a period of five years from the date of approval; that municipalities or the board need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the Commissioner; but that modifications to the approved audit plan and audit program shall be submitted to the Department for review and approval and new approval must be obtained once the five year approval period has concluded. The proposed amendment further provides that once the audit is completed, a draft of the audit report shall be submitted to the Commissioner for review and/or resolution; and that in order to be approved by the Commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the Department.
6. PAPERWORK:
The proposed amendment implements section 24 of the Chapter 57 of the Laws of 2013 by requiring municipalities and the board of education of the city school district of the city of New York that choose to commence an audit or after May 28, 2013, to submit to the Department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the Department on or after such date.
The proposed amendment also specifies that municipalities or the board need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the Commissioner; but that modifications to the approved audit plan and audit program shall be submitted to the Department for review and approval and new approval must be obtained once the five year approval period has concluded. The proposed amendment further provides that once the audit is completed, a draft of the audit report shall be submitted to the Commissioner for review and/or resolution; and that in order to be approved by the Commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the Department.
7. DUPLICATION:
The proposed amendment does not duplicate any existing State or Federal requirements, and is necessary to implement section 24 of Chapter 57 of the Laws of 2013.
8. ALTERNATIVES:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education in a city with a population of one million or more, to perform fiscal audits of Education Law section 4410 preschool special education programs and services. There are no significant alternatives and none were considered.
9. FEDERAL STANDARDS:
There are no applicable Federal standards.
10. COMPLIANCE SCHEDULE:
The regulation does not require action on the part of a municipality or the board of education of the city school district of the city of New York unless it voluntarily chooses to commence an audit on or after May 28, 2013. It is anticipated that regulated parties will be able to achieve compliance with the proposed amendment by its effective date.
Regulatory Flexibility Analysis
Small Businesses:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education in a city with a population of one million or more, that choose to perform fiscal audits of Education Law section 4410 preschool special education programs and services. The proposed amendment does not impose any adverse economic impact, reporting, record keeping or any other compliance requirements on small businesses. Because it is evident from the nature of the proposed amendment that it does not affect small businesses, no further measures were needed to ascertain that fact and none were taken. Accordingly, a regulatory flexibility analysis for small businesses is not required and one has not been prepared.
Local Government:
1. EFFECT OF RULE:
The proposed amendment applies to municipalities, defined in Education Law section 4410(1)(g) as a county outside of the city of New York or the city of New York in the case of a county contained within the city of New York, and the board of education of the city of New York, that choose to perform a fiscal audit of Education Law section 4410 preschool special education programs and services for which the municipality bears fiscal responsibility. Pursuant to Education Law section 4410(1)(g), the proposed amendment is applicable to all counties in the State that are located outside of the city of New York and the city of New York in the case of a county contained within the city of New York.
2. COMPLIANCE REQUIREMENTS:
The proposed amendment implements section 24 of the Chapter 57 of the Laws of 2013 by requiring municipalities and the board of education of the city of New York that choose to commence an audit on or after May 28, 2013, to submit to the Department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the Department on or after such date.
The proposed amendment also specifies that Commissioner approval of an audit program and audit plan shall be valid for a period of five years from the date of approval; that municipalities and the board need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the Commissioner; but that modifications to the approved audit plan and audit program shall be submitted to the Department for review and approval and new approval must be obtained once the five year approval period has concluded. The proposed amendment further provides that once the audit is completed, a draft of the audit report shall be submitted to the Commissioner for review and/or resolution; and that in order to be approved by the Commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the Department.
3. PROFESSIONAL SERVICES:
The proposed amendment does not impose any additional professional services requirements. Existing statute (Education Law 4410) and regulation (Part 200.18) required municipalities and the board of education in the city of New York that choose to perform audits pursuant to Education Law section 4410 to do so in accordance with audit standards established by the commissioner.
4. COMPLIANCE COSTS:
None required. Pursuant to Education Law section 4410 (11)(c)(i), municipalities and the board of education in a city with a population of one million or more are not required to perform fiscal audits of the providers but may choose to do so voluntarily. If a municipality or the board choose to perform a fiscal audit, then prior to the enactment of Chapter 57 of the Laws of 2013, section 4410(11)(c)(i) required these voluntary audits to be performed in accordance with audit standards established by the commissioner. Section 24 of Chapter 57 of the Laws of 2013 expands this provision by directing the Department to create guidelines on the standards and procedures for fiscal audits and the proposed regulation incorporates this requirement within the existing audit standards established by the commissioner (which require an approved audit plan and audit program). Depending on the existing audit plans and audit programs, municipalities and the board of education of the city of New York could potentially incur costs associated with developing an audit plan and program if they choose to perform a fiscal audit pursuant to Education Law section 4410 and their existing audit plan and program are not consistent with the guidelines provided by the Department as directed by section 24 of Chapter 57 of the Laws of 2013. These costs may be offset by funds that may be recovered by the municipality or board following an audit that identifies overpayments made to a provider as, pursuant to section 24 of Chapter 57 of the Laws of 2013, one hundred percent of these overpayments may be recovered.
5. ECONOMIC AND TECHNOLOGICAL FEASIBILITY:
The proposed amendment does not impose any additional costs or new technological requirements on local governments. The proposed amendment does not impose any adverse economic impact, reporting, record keeping or any other compliance requirements on local governments; municipalities and the board of education of the city of New York are not required to perform new functions pursuant to the proposed amendment.
6. MINIMIZING ADVERSE IMPACT:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education in a city with a population of one million or more, to perform fiscal audits of Education Law section 4410 preschool special education programs and services. Because the statute upon which the proposed amendment is based applies to all affected municipalities in the State, it is not possible to establish differing compliance or reporting requirements or timetables or to exempt them from the provisions of the proposed amendment.
7. LOCAL GOVERNMENT PARTICIPATION:
Meetings with representatives from the New York State Association of Counties and the New York City Board of Education were conducted to discuss the proposed regulation and a draft copy of the proposed regulation was provided to both entities on April 26, 2013.
8. INITIAL REVIEW OF RULE (SAPA § 207):
Pursuant to State Administrative Procedure Act section 207(1)(b), the State Education Department proposes that the initial review of this rule shall occur in the fifth calendar year after the year in which the rule is adopted, instead of in the third calendar year. The justification for a five year review period is that the proposed amendment is needed to implement section 24 of Chapter 57 of the Laws of 2013 and therefore changes to the substantive provisions of the proposed amendment are dependent on further statutory changes. Accordingly, there is no need for a shorter review period. The Department invites public comment on the proposed five year review period for this rule. Comments should be sent to the agency contact listed in item 10. of the Notice of Proposed Rule Making published herewith, and must be received within 45 days of the State Register publication date of the Notice.
Rural Area Flexibility Analysis
1. TYPES AND ESTIMATED NUMBER OF RURAL AREAS:
The proposed amendment applies to municipalities, defined in Education Law section 4410(1)(g) as a county outside of the city of New York or the city of New York in the case of a county contained within the city of New York, and the board of education of the city school district of the city of New York, that choose to perform a fiscal audit of Education Law section 4410 preschool special education programs and services for which the municipality bears fiscal responsibility. This proposed amendment impacts all counties including the 44 rural counties with less than 200,000 inhabitants.
2. REPORTING, RECORDKEEPING AND OTHER COMPLIANCE REQUIREMENTS; AND PROFESSIONAL SERVICES:
The proposed amendment implements section 24 of the Chapter 57 of the Laws of 2013 by requiring municipalities and the board of education of the city school district of the city of New York that choose to commence an audit on or after May 28, 2013, to submit to the Department for approval a detailed audit plan and audit program which shall be consistent with guidelines on audit standards and procedures issued by the Department on or after such date.
The proposed amendment also specifies that Commissioner approval of an audit program and audit plan shall be valid for a period of five years from the date of approval; that municipalities or the board need not submit an audit program and audit plan for each audit to be performed during the five year approval period once approval has been granted by the Commissioner; but that modifications to the approved audit plan and audit program shall be submitted to the Department for review and approval and new approval must be obtained once the five year approval period has concluded. The proposed amendment further provides that once the audit is completed, a draft of the audit report shall be submitted to the Commissioner for review and/or resolution; and that in order to be approved by the Commissioner, the draft audit shall be consistent with guidelines on audit standards and procedures issued by the Department.
The proposed amendment does not impose any additional professional services requirements.
3. COSTS:
None required. Pursuant to Education Law section 4410 (11)(c)(i), municipalities and the board of education in a city with a population of one million or more are not required to perform fiscal audits of the providers but may choose to do so voluntarily. If a municipality or the board choose to perform a fiscal audit, then prior to the enactment of Chapter 57 of the Laws of 2013, section 4410(11)(c)(i) required these voluntary audits to be performed in accordance with audit standards established by the commissioner. Section 24 of Chapter 57 of the Laws of 2013 expands this provision by directing the Department to create guidelines on the standards and procedures for fiscal audits and the proposed regulation incorporates this requirement within the existing audit standards established by the commissioner (which require an approved audit plan and audit program). Depending on the existing audit plans and audit programs, municipalities and the board of education of the city school district of the city of New York could potentially incur costs associated with developing an audit plan and program if they choose to perform a fiscal audit pursuant to Education Law section 4410 and their existing audit plan and program are not consistent with the guidelines provided by the Department as directed by section 24 of Chapter 57 of the Laws of 2013. These costs may be offset by funds that may be recovered by the municipality or board following an audit that identifies overpayments made to a provider as, pursuant to section 24 of Chapter 57 of the Laws of 2013, one hundred percent of these overpayments may be recovered.
4. MINIMIZING ADVERSE IMPACT:
The proposed amendment is needed to implement section 24 of the Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education in a city with a population of one million or more, to perform fiscal audits of Education Law section 4410 preschool special education programs and services. The statute which the proposed amendment implements applies to all affected municipalities throughout the State, including those in rural areas. Therefore, it was not possible to establish different requirements for entities in rural areas, or to exempt them from the amendment's provisions.
5. RURAL AREA PARTICIPATION:
Meetings with representatives from the New York State Association of Counties, which includes counties located in rural areas, were conducted to discuss the proposed regulation and a draft copy of the proposed regulation was provided on April 26, 2013.
6. INITIAL REVIEW OF RULE (SAPA § 207):
Pursuant to State Administrative Procedure Act section 207(1)(b), the State Education Department proposes that the initial review of this rule shall occur in the fifth calendar year after the year in which the rule is adopted, instead of in the third calendar year. The justification for a five year review period is that the proposed amendment merely implements, and conforms the Commissioner's Regulations to, statutory requirements under Chapter 102 of the Laws of 2012 and therefore the substantive provisions of the proposed amendment cannot be repealed or modified unless there is a further statutory change. Accordingly, there is no need for a shorter review period. The Department invites public comment on the proposed five year review period for this rule. Comments should be sent to the agency contact listed in item 10. of the Notice of Proposed Rule Making published herewith, and must be received within 45 days of the State Register publication date of the Notice.
Job Impact Statement
The proposed amendment applies to municipalities, defined in Education Law section 4410(1)(g) as a county outside of the city of New York or the city of New York in the case of a county contained within the city of New York, and the board of education of the city of New York, that choose to perform a fiscal audit of Education Law section 4410 preschool special education programs and services for which the municipality bears fiscal responsibility.
The proposed amendment is needed to implement section 24 of Chapter 57 of the Laws of 2013 by establishing standards and procedures for municipalities, and the board of education in a city with a population of one million or more, that choose to perform fiscal audits of Education Law section 4410 preschool special education programs and services, and will not have an adverse impact on jobs or employment opportunities. Because it is evident from the nature of the proposed amendment that it will have a positive impact, or no impact, on jobs or employment opportunities, no further steps were needed to ascertain those facts and none were taken. Accordingly, a job impact statement is not required and one has not been prepared.
