A special education services provider was found to have overbilled the New York City Department of Education (DOE) by almost $6 million after an accounts payable audit was conducted.
According to The Wall Street Journal, the office of New York Comptroller Tom DiNapoli investigated the financial records of IncludED Educational, and discovered that the company had overbilled the DOE and several other organizations for tuition costs. Auditors also uncovered payments to relatives of IncludED's executive director, as well as other non-business related expenses, such as the leasing of luxury cars. The comptroller looked at the company's records from 2005 to 2009, and found that at the end of the 2006 school year, IncludED owed the DOE approximately $3.1 million. The audit for 2007 to 2009 revealed another $2.6 million in overbilling, states the news source.
IncludED was founded in 1994 by Morton Kramer, but discontinued its services and operations in April, reports Long Island Business News. The company provided educational services to area children with special needs. Kramer is accused of using IncludED's accounts to make payments to his sons, and he and his wife allegedly used the DOE funds to purchase plane tickets, student loans and landscaping services.
The recent investigation is among several that DiNapoli's office is currently executing in hopes of cracking down on the misappropriation of funds by special education providers in the city, writes the source. So far, four contractors accused of financial non-compliance have been arrested and $610,000 has been recovered.
"Waste, fraud and abuse cannot be tolerated in our special education programs, but my auditors keep finding it," DiNapoli said. "Allowing these abuses to continue deprives children with disabilities of the resources intended for them and threatens the entire private special education program."