ALBANY -- The state Education Department has not conducted an on-site audit of expensive preschool education providers since 2007, despite recent instances of fraud, a comptroller's office study found.
State Comptroller Thomas DiNapoli released a report Tuesday calling the education department's oversight of such services for 3- and 4-year-olds "inadequate."
The program costs about $2 billion annually and serves about 75,000 students.
"Children with disabilities and taxpayers are being ripped-off, and it has to stop," DiNapoli said in a statement. "The State Education Department has much work to do to straighten out the special education program. A new and more effective system of oversight is urgently needed."
Education department officials said it has already begun implementing some of the reforms that the comptroller recommends in his report.
Recently, DiNapoli's auditors have identified fraud and improper use of funds, resulting in $13.2 million of disallowances out of a total of $139.8 million paid for by state and local governments.
There have been several criminal referrals, felony arrests and hundreds of thousands of dollars in restitution made as a result of the audits. Six providers so far have been referred to law enforcement. In total, 30 special education contractors have been or are being audited.
A review of education department's oversight found that it provided no financial audit oversight of individual providers over the last five years.
In addition, the department performed a limited number of program reviews of private special education providers and has no process in place to ensure all providers are reviewed periodically.
The department placed a moratorium in November on approving new preschool special education programs or allowing the expansion of existing ones while it overhauls its vetting process.
School advocacy groups have said the moratorium keeps kids from getting the services they need.