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NYS Comptroller


State Education Department
21st Century Community Learning Centers
(Issued: 12/13/2012)

The objectives of our examination were to determine if: (i) Baychester expended funds in accordance with the contract; (ii) Baychester accounted for other revenue in accordance with the terms and conditions of the contract; and (iii) the State Education Department’s (Department) monitoring procedures relative to this 21st Century Community Learning Centers (Community Learning Centers) program are effective in assessing and mitigating risk of paying grantees for inappropriate expenses.  We examined the $545,000 in expenses Baychester claimed for reimbursement from the Department during the period July 1, 2010 through June 30, 2011. 

The Department awarded this contract to Baychester to provide academic enrichment and youth development opportunities during non-school hours to children who attend high-poverty, low-performing schools.  The contract, valued at $2.725 million, originally covered the period July 1, 2008 through June 30, 2013.  Baychester was paid $490,500 during our examination period.

Key Findings

  • Baychester’s Executive Director certified $250,401 in claim reimbursements for expenses that were inappropriate or un substantiated, including:
    • $189,303 in expenses that could not be substantiated as paid, and
    • $61,098 in inappropriate expenses, including $3,519 in State grant funds that were used to purchase electronic equipment that evidence supports was delivered to and installed in the Executive Director’s home.
  • After identifying the $189,303 in unaccounted for grant funds, we expanded our review on a limited basis to include additional expenses Baychester incurred that were relevant to our examination.  These include:
    • Inappropriate and unsubstantiated transactions totaling $159,334 that the Executive Director authorized between 2007 and 2010 (a time when Baychester held this as well as other State and New York City contracts) that Baychester’s Certified Public Accountant classified into a loan receivable due from the Executive Director. 
    • Disbursements totaling $4,990 that the Executive Director made to herself and admitted were for rent for her personal residence and a personal hotel stay.
    • Disbursements totaling $3,000 made to the Chair of Baychester’s Board of Directors for personal legal fees.
  • Baychester failed to report $18,419 in revenue from other sources to the Department, as required by the contract.  According to Department representatives, this revenue should have reduced the grant obligation or Baychester should have been required to provide more services.
  • The conditions at Baychester went undetected by the Department because the Department’s monitoring procedures relative to this grant program are not designed to detect grantees making inappropriate or unsubstantiated disbursements or not reporting revenue.  Despite sufficient indicators available to the Department, it failed to recognize the risk associated with Baychester.

The case has been referred to the Bronx County District Attorney’s office for further investigation.  The Department has since terminated its contract with Baychester and has withheld the final payment of $54,500.  The Department directed Baychester to repay the remaining balance of inappropriate and unsubstantiated expenses found during the course of this examination ($195,901), will review expenses claimed since the inception of Baychester’s contract, and will attempt to determine the appropriate treatment of additional revenue received by Baychester but not reported to the Department.

Key Recommendations

  • Assess monitoring procedures relative to the Community Learning Centers program and establish controls that increase the detection of fraud, waste, and impropriety amongst grantees.
  • Recover $195,901 from Baychester to resolve the inappropriate and unsubstantiated expenses remaining after withholding the final payment of $54,500.
  • Determine if the other revenue Baychester received supported services already covered under the contract, and reduce the Department’s grant obligation accordingly.
  • Review expenses claimed by Baychester since the inception of the contract and recover inappropriate and unsubstantiated reimbursements accordingly.

For a complete copy of Report 2011-0021, click here.

Division of Contracts and Expenditures
Bernard J. McHugh, Director of State Expenditures

Phone: (518) 474-4868 Email:
Address: Office of the State Comptroller, Division of Contracts and Expenditures
110 State Street, 10th Floor; Albany, NY 12236