Brooklyn Special-Ed Preschool Stole Money From State: Audit

State Comptroller Thomas DiNapoli has one downtown Brooklyn preschool in his cross-hairs.

The Milestone School for Child Development, which the State Comptroller’s Office calls ”a for-profit preschool that offers special education services to children aged three to five years old,” claimed more than $800,000 in ineligible state reimbursements between 2010 and 2013, says a new government audit.

It says the school collected state money for salaries, fringe benefits, rent and other “personal service costs” — including $10,508 for entertainment, food and gifts — that did not qualify for reimbursement and/or were not properly documented.

Some examples, from the audit:

• $196,160 in excessive rent expenses. Milestone claimed higher rent costs than what it should have paid based on a review of its lease agreements;
• $188,447 in unsupported charges, including $26,422 in telephone expenses that had no invoices or contracts to support them, and $31,926 in American Express charges with no invoices to support the billing statements;
• $149,815 in unsupported or inappropriate fringe benefit expenses, including $78,307 in expenses that were double-counted because they were already included in Milestone’s gross compensation charges;
• $105,632 in salary to three employees, including the executive director. Milestone charged their full salaries to the state even though the employees were also working for other service programs;
• $32,142 in checks that Milestone voided, but still included in its annual expenses reported to SED;
• $10,508 for entertainment, food and gifts, including $4,495 in holiday and staff appreciation gifts;
• $2,470 in salary for a teacher’s assistant. Milestone charged the state $9,240 even though it only paid her $6,770.

Milestone’s attorney, Frederick Berman, responded in a searing letter. He argued that the State Comptroller’s Office did not have the authority to review Milestone’s records and that pretty much all its calculations were wrong.

Still, DiNapoli’s office is standing by its authority and original claims.

“The State Education Department instructs special education providers how it can and can’t spend taxpayer’s money to ensure that special needs children get the greatest benefit,” DiNapoli says in a statement. “When providers ignore these rules or fail to follow them, they shortchange New York’s most vulnerable children.”

According to the New York Post, Milestone, located at 15 Hanover Place near Fort Greene and Park Slope, closed in June.

Before that, it was reportedly serving about 110 kids per year. Are there any readers whose children attended the special-ed school who might have some insight? Reach out: simone.wilson@patch.com.