Audit Report On The Compliance Of Strivright, Inc With Its Related Services Agreement With The Department Of Education

Executive Summary

The New York City Department of Education (DOE) is mandated by the federal Individuals with Disabilities Education Act (IDEA) and the New York State Department of Education to provide special education services to students with disabilities from birth to age 21.  Under the law, every child with a disability, no matter how severe, has the right to a free, appropriate public education in the least restrictive environment possible.

Strivright, Inc., also known as the Auditory Oral School of New York (Strivright), is a 501(c)(3) non-profit organization that specializes in therapy and speech language pathology services.  In 2012, Strivright entered into a $13 million contract with New York City (the City), for a three-year term, from September 1, 2012 to August 31, 2015, as a contracted vendor to provide special education services, with the City’s having an option to extend the agreement for two additional one-year periods.  In 2018, the parties entered into an $18 million agreement for the same services, for a three-year term from September 1, 2017 to August 31, 2020, with an option for the City to extend the agreement for two additional one-year periods.

During our audit scope, Strivright employed 218 individuals to provide occupational therapy, hearing education services, sign language interpreting, and speech therapy—known as related services—to preschool (ages 3-5) and school-age (ages 5-21) students with disabilities, when requested by DOE.  Strivright submitted to DOE 4,947 invoices for those services, totaling $10,891,470 from September 1, 2016 through April 30, 2018, our audit scope period.

Audit Findings and Conclusion

We found that Strivright did not consistently comply with the terms of its related services contract with DOE.  Although payments to Strivright were generally reasonable, we found that in certain cases they were not appropriate and adequately supported due to Strivright’s internal control weaknesses.  Primarily, we found that Strivright did not ensure that the schools its individual providers worked in maintained providers’ daily sign-in/sign-out sheets, as required by DOE, or ensure that alternative mechanisms were established to help verify the providers’ certifications that they rendered the specific related services to specific students at the times and places specified in their monthly invoices.  In the absence of a contemporaneous, verifiable record establishing that the providers were physically present at the times and locations in which they claimed they had rendered related services, we found that payments were not adequately supported.  In connection with that overall finding, we also found that Strivright’s related services providers billed for some sessions—a relatively small percentage of the overall audit sample— for students marked absent in school attendance records and for sessions reportedly held on a holiday when the schools in question were closed.  In addition, we found that 2 out of 35 of Strivright’s related services providers were paid for consecutive sessions they reportedly provided at different locations where the billings did not account for any travel time between those sessions.  For the foregoing reasons, we found that DOE does not have sufficient assurance that all the services billed for were actually provided.  We further found that Strivright’s related services providers were able to submit and be paid for claims that failed to exclude a 30-minute mandatory unpaid lunch time—stipulated by Strivright’s City contract—after the providers reportedly had worked for 5 consecutive hours, which reflects an additional control weakness.

Audit Recommendations

To address the issues raised by this audit, we make nine recommendations as follows:

Strivright should:

• Encourage the schools where related services are being provided to maintain a sign-in/sign-out sheet for the providers. If the schools are not amenable to maintaining a specific sign-in/sign-out sheet for the providers, Strivright should work with the schools to provide another mechanism for verifying the individual providers’ daily attendance, such as a security log accessible to providers for signing-in/signing-out;
• Identify and match the students’ current private school address with the addresses for the schools contained in DOE’s systems;
• Ensure that consecutive sessions at different locations are not conducted by a single provider by (a) issuing clear directives to the providers instructing them not to schedule consecutive sessions at different locations; and (b) requiring the providers to add on the vouchers the name and school address or place of business where each session is provided; and
• Ensure that it schedules a 30-minute break for its related services providers after they work 5 hours as required by the Strivright contract with DOE.

DOE should:

• Require private schools to send a notification when a student transfers to/from another school and ensure that students’ current private school locations are updated in a timely manner in their systems;
• Add a field in DOE’s computerized database, known as the Special Education Student Information System (SESIS), to report the actual school address where the related service was provided.
• Add a check in its system to detect sessions billed after five hours of continuous hours of service;
• Require Strivright to ensure that it does not submit invoices for services of over five or more continuous hours billed by its providers; and
• Recoup $93,936 billed by Strivright providers for services provided during unpaid lunch breaks.

Agency Response

In its response, Strivright agreed with three of the four recommendations, stating that it already complies with each, and disagreed with the recommendation that it encourage the schools where related services are being provided to maintain a sign-in/sign-out sheet for providers or an alternative mechanism for verifying the individual providers’ daily attendance.  Further, Strivright disagreed with the audit’s findings overall.  Specific areas of disagreement are discussed in the relevant section of this report.  In its response, DOE agreed with one of the five recommendations and stated that it will take the remaining four into consideration. Specifically, DOE stated that it will consider implementing the recommendations: that private schools notify DOE when a student transfers to/from another school; that it add a field in SESIS to report the actual school address where the related services are being provided; that it place a check in its system to detect sessions billed after five continuous hours of service; and that it recoup the sums billed for services that were identified as having been provided at times that should have been unpaid lunch breaks.

After carefully considering the arguments presented by Strivright and DOE, we find no basis for altering any of the audit’s findings or recommendations.