(a) Definitions. As used in this section:
(1) Approved program means a program that provides special education to students with disabilities requiring the establishment of a tuition rate, in accordance with sections 4003, 4401, 4403, 4405, 4408 and 4410 of the Education Law.
(2) Arm's-length transaction means one entered into by independent and unrelated persons in a good faith transaction between a willing buyer and a willing seller.
(3) Base year means the July 1st through June 30th fiscal period that is used as the basis for tuition rate calculations. It is two years prior to the tuition rate year, as defined in paragraph (26) of this subdivision.
(4) Base year data means the program and financial information that corresponds to the base year.
(5) Budget based rate means a tuition rate calculated for an approved program based on budgetary information submitted by the program.
(6) Student with a disability means a student with a disability as such term is defined in section 200.1(zz) of this Part, or a preschool student with a disability, as such term is defined in section 200.1(mm) of this Part.
(7) Compliance issue means a condition identified by the commissioner's designated representative, whereby a program is determined to be out of compliance with one or more State or Federal statutes or regulations.
(8) Compliance review means a review initiated by the commissioner's designated representative for the purpose of determining whether a compliance issue, as defined in paragraph (7) of this subdivision, exists.
(9) Corrected rate means a tuition rate that has been adjusted due to a mathematical or reporting error either in the tuition rate calculation or an error in the financial report data submitted to the commissioner.
(10) Cost center means revenues and expenses, as well as statistical and other information relating to a specific program or functional purpose.
(11) Direct care cost means a cost associated with the provision of instruction and related services to students with disabilities.
(12) Full-time-equivalent (FTE) enrollment shall have the same meaning as such term is defined in section 175.6 of this Title.
(13) Insufficient resources means a condition whereby a program as currently structured does not meet applicable State or Federal statutes or regulations for the population being served and that the reassignment of existing staff or reallocation of program resources currently allocated for other needs would not bring the program into compliance.
(14) Less-than-arm's-length transaction means one between the program or related entity and anyone who serves as part of the management or as a volunteer or employee of the program or related entity, or any of the following relations of such persons: spouse, former spouse, child or descendent, parent or ancestor, sibling, or spouse of descendent, ancestor or sibling. Also included are dealings with partnerships of which such persons are partners or employees, or with corporations of which any such person is an officer, director or trustee, or in which any such person owns more than 10 percent of the stock.
(15) Nondirect care cost means a cost that is attributable to the administration or the operation and maintenance of the physical plant, as each pertains to the approved special education program.
(16) Nondirect care cost parameter means the limit on reimbursable nondirect care costs before application of applied revenues and the total cost screen.
(17) Off-year means the July 1st through June 30th fiscal year subsequent to the base year and preceding the tuition rate year.
(18) Per diem rate means the tuition rate, as defined in paragraph (25) of this subdivision, on a per care day basis. The per diem rate is calculated by dividing the total reimbursable costs by the total care days.
(19) Rate based on audit means a tuition rate that has been calculated based on a final audit of actual program expenses, revenues, enrollment data and other relevant program information performed by the commissioner, the State Comptroller, other State agencies or agencies or subdivisions of other states, or a municipality in accordance with section 200.18 of this Part.
(20) Reconciliation rate means a tuition rate that has been calculated using actual program and financial data with the applicable reimbursement methodology applied.
(21) Site visit means an on-site programmatic review conducted by the commissioner's designated representative.
(22) Special class means a class, as such term is defined in section 200.1(uu) of this Part.
(23) Total care days means the number of days a program operates in a given year multiplied by the full-time-equivalent student enrollment in that year.
(24) Total cost screen means a control measure within the reimbursement methodology that controls material fluctuations in tuition rates from year to year. The two components of the total cost screen are the hold harmless component and the rate growth component.
(25) Tuition rate means the per pupil amount to be used for billing public tuition funding sources for full-time-equivalent students enrolled in an approved special education program. The rate shall be established based on the requirements as stated in this section.
(26) Tuition rate year means the July 1st through June 30th fiscal year for which a tuition rate is calculated that is two years subsequent to the base year, unless it is a budget based rate, reconciliation rate or rate based on audit.
(b) Tuition rates for approved programs receiving public funds for educating students with disabilities shall be calculated on a July 1st through June 30th basis and in accordance with the provisions contained in this section. For purposes of this Part, programs that conform to the requirements of State or Federal laws or regulations governing the education of students with disabilities that have been approved by the commissioner shall include private providers, special act school districts, boards of cooperative educational services (BOCES), and public school districts.
(c) School district or local government reimbursement to approved programs shall conform to the provisions of this section and articles 81 and 89 of the Education Law.
(d) Accounting requirements for approved programs.
(1) Programs shall maintain accounts in accordance with generally accepted accounting principles.
(2) Programs shall use the accrual basis of accounting. Accounting books of original entry shall include asset, liability and fund balance or equity accounts, as well as expenditure and revenue accounts. Subsidiary revenue and expenditure accounts shall be maintained for each approved program requiring a tuition rate, for preschool evaluation costs, and for each government grant administered by the commissioner.
(3) Programs shall retain all pertinent accounting, allocation and enrollment/attendance records for a period of seven years following the end of each reporting year. Information relating to the acquisition of fixed assets, equipment, land or building improvements and any related financing arrangements and grants must be retained as long as the facility is used by any education program the provider operates if this period exceeds seven years.
(4) Government grants received for costs of construction, renovation or acquisition of facilities or equipment shall be deducted from the original cost of such asset to determine the basis to be used for calculating depreciation or amortization of the asset.
(5) Special act school districts, BOCES, and public school districts shall maintain accounts in accordance with generally accepted accounting principles as determined for public entities by the State Comptroller in accordance with section 36 of the General Municipal Law.
(e) Financial reporting requirements for approved programs.
(1) Tuition rates for existing approved private programs and special act school districts shall be based on financial reports, as prescribed by the commissioner, supported by financial statements certified by a licensed or certified public accountant independent of the program's operation. Annual financial reports and financial statements for either the fiscal year, July 1st through June 30th, or for the calendar year, January 1st through December 31st, as applicable, shall be required to be submitted to the commissioner's designated representative. Tuition rates for existing approved BOCES' and public school district programs shall be based on financial reports as required by the commissioner and/or the State Comptroller.
(i) Financial reports.
(a) Financial reports for all programs shall provide information that will allow analysis of revenues and expenses by program including but not limited to enrollment and staffing data. Additionally, the following requirements shall apply:
(1) Private providers and special act school districts shall submit the New York State Consolidated Fiscal Report certified by a licensed or certified public accountant independent of the program's operation.
(2) BOCES shall submit the Annual Financial and Statistical Report of the BOCES (SA-111) in the format required by the commissioner, including an affidavit of the treasurer that the statements contained in the report are true.
(3) Public school districts shall submit the Annual Financial Report Based on Double-Entry Accounting (ST-3) in the format specified by the State Comptroller and the commissioner, including a certification by the district treasurer, the chief fiscal officer, or the president of the board, as applicable, that the information is a true and correct statement of the financial transactions of the school district for the applicable fiscal year.
(b) Financial reports for all programs shall be prepared on the accrual basis of accounting and in accordance with generally accepted accounting principles.
(c) Financial reports shall include separate cost centers for each special education program requiring the establishment of a tuition rate and for other programs and services receiving funding through the department.
(d) Evaluation costs and related statistical data for preschool students, as prescribed in section 4410 of the Education Law and sections 200.4 and 200.16 of this Part, must be reported in a separate cost center.
(e) Expenditures, revenues, and statistical data, as they pertain to each government grant administered by the commissioner, must be reported in separate cost centers for that grant.
(f) The Consolidated Fiscal Report shall be submitted no later than October 31st following the close of the July 1st through June 30th fiscal year and no later than April 30th following the close of the calendar year, as applicable. The SA-111 shall be submitted no later than October 1st following the close of the school fiscal year and the ST-3 shall be submitted in accordance with the schedule established by the State Comptroller.
(ii) Financial statements.
(a) The financial statements submitted by approved programs shall be certified by a licensed or certified public accountant independent of the program. In instances where the licensed or certified public accountant or accounting entity provides for nonaudit services to the program such as management consulting, automation consulting or bookkeeping services, the provision of these services shall be fully disclosed via an explanatory note to the audited financial statements.
(b) The required financial statements for nonprofit providers shall include a balance sheet, a statement of activity and a statement of changes in financial position. The required financial statements for for-profit providers shall include a balance sheet, an income statement and a statement of cash flows. For nonprofit and for-profit providers, any notes that may be appropriate to explain the data contained in the above statements, a management letter if available, and a report on the reliability of the systems of internal control shall also be included.
(c) For private providers that are required to file a New York State Consolidated Fiscal Report with other State agencies on a calendar year, the financial statements shall be consistent with the financial reporting period of the Consolidated Fiscal Report whenever possible.
(d) All other private providers and special act school districts are required to file the Consolidated Fiscal Report and financial statement information on a July 1st through June 30th fiscal year.
(e) BOCES and public school districts shall submit financial statements to the commissioner and/or to the State Comptroller in the required format.
(f) Financial statements shall be required to be submitted to the appropriate representative on the same schedule that the financial reports, as prescribed in clause (i)(f) of this paragraph, are required.
(2) Private providers may request one 30-day extension for filing complete financial statements and financial reports provided that they demonstrate in writing why the required information could not be provided prior to the established due date. Extension requests shall be approved or disapproved by the commissioner in writing.
(3) Programs seeking initial approval shall submit a programmatic application to the commissioner's designated representative, in accordance with section 200.7 of this Part.
(i) Tuition rates for at least the first two school years of operation for special class programs shall be established in the manner described in subparagraph (f)(2)(ix) of this section.
(ii) Tuition rates for the first two school years of operation for other than special class programs, shall be based on financial and related statistical information submitted to the commissioner on required budget forms.
(f) Principles governing reimbursement rates for approved programs.
(1) Reimbursement to special education programs shall be subject to the following principles:
(i) Tuition rates shall include administration and direct care costs and the costs of operation and maintenance of instructional facilities, pursuant to section 4401 of the Education Law. Expenditures shall include but not be limited to: personal service costs, supplies, materials, equipment, and related debt service.
(ii) Evaluation costs will be reimbursed either as part of the tuition rate or through a separate evaluation rate, as warranted by the commissioner. Such separate evaluation rates shall be established by the commissioner and transmitted to the Director of the Budget for approval.
(iii) For purposes of establishing tuition rates, program expenses shall be offset by revenues received for special education programs, as prescribed in subparagraph (2)(v) of this subdivision.
(iv) Adjustments shall be made to reported financial data. Such adjustments may include but not be limited to:
(a) any reported cost not considered necessary or directly related to the operation of the specific approved special education program;
(b) any reported cost that cannot be substantiated on field audit by adequate written documentation. Adequate documentation shall include but not be limited to: payroll records, allocation records, canceled checks, invoices, and depreciation schedules;
(c) any reported costs incurred by the program as a result of unsound business practices or accounting practices not in accordance with generally accepted accounting principles;
(d) excess depreciation or amortization costs incurred as a result of using accelerated methods or useful lives other than those required for the Consolidated Fiscal Report;
(e) costs incurred in less-than-arm's-length transactions that are determined to be above the actual, documented costs of the owner. Costs above actual, documented costs of the owner shall be allowed only with written approval of the commissioner upon the establishment of the cost effectiveness resulting from the transaction;
(f) interest expense on capital indebtedness or on working capital loans incurred in a less-than-arm's-length transaction between the lender and the borrower in excess of the prime rate of the lending institution. Interest rates in excess of the prime rate shall be allowed only with written approval of the commissioner upon establishment of the cost effectiveness resulting from the transaction; provided, however, that interest rates on working capital loans shall be allowable if not disapproved within five business days of receipt by the commissioner of a completed request for approval;
(g) interest expense on capital indebtedness resulting from an interest rate in excess of the prime rate of the lending institution plus one percent. Interest rates in excess of the prime rate plus one percent shall be allowed only with prior written approval of the commissioner in cases where the program can establish that it was unable to secure a rate of prime plus one percent or lower despite its good faith efforts to do so;
(h) interest expense on working capital loans in excess of the prime rate of the lending institution plus one percent. Interest rates in excess of the prime rate plus one percent shall be allowed only with written approval of the commissioner in cases where the program can establish that it was unable to secure a rate of prime plus one percent or lower despite its good faith efforts to do so;
(i) interest expense on working capital loans if conditions do not exist that warrant the loan. Documentation that the loan is warranted may include but not be limited to:
(1) documentation indicating that tuition billings or their equivalent were submitted to the appropriate funding sources by the program in a timely manner but tuition payments were not received in accordance with the written contract or payment schedule; and
(2) evidence indicating that required financial report and financial statement data was submitted in a timely manner and in the format required by the commissioner, as prescribed in subdivision (e) of this section.
(2) Tuition reimbursement methodology. The commissioner shall develop and recommend the reimbursement methodology to be used in the calculation of tuition rates for programs approved under articles 81 and 89 of the Education Law to the Director of the Budget. In accordance with section 4410(10)(a)(i) of the Education Law, the commissioner's municipal task force shall submit an annual report by December 31st of each year to the commissioner providing recommendations on the preschool rate-setting methodology for the following school year. The Director of the Budget, in consultation with the commissioner, shall approve the reimbursement methodology. Any modification to the approved methodology, including but not limited to the nondirect care cost parameter, the hold harmless percentage, the rate of growth adjustment factor, the annual inflation factor and other factors to be applied in determining the tuition rate for the school year, shall require the approval of the Director of the Budget.
(i) The reimbursement methodology shall be applied to base year data and other information submitted in the required financial reports and financial statements, as prescribed in subdivision (e) of this section. The methodology shall also be applied to budget data used to calculate budget based rates, to actual data used to calculate reconciliation rates and to audit data used to calculate final rates based on audit.
(ii) The data in the financial reports shall be reviewed and adjustments shall be made in accordance with this section.
(iii) Annual inflation factors shall be applied to the appropriate financial report data after adjustments, with the exception of budget based rates, reconciliation rates and final rates based on audit.
(iv) The nondirect care cost parameter shall limit nondirect care costs as a percent of total reimbursable adjusted inflated costs before application of applied revenues and before application of the total cost screen.
(v) Applied revenues, as reported on the financial reports and statements, shall include revenue that, to any extent, defrays expenses included in the tuition rate calculation either for the tuition rate year or for prior years, consistent with section 4001 of the Education Law. These revenues shall be subtracted from total costs after the application of the nondirect care cost parameter.
(vi) Per diem rates shall be controlled by the total cost screen. The total cost screen calculation shall use a per diem rate for each education program for both the rate year and the previous year. A per diem rate shall be arrived at by dividing the total reimbursable costs by the total care days used in the tuition rate calculation. Total care days shall equal the number of days in session multiplied by the full-time-equivalent (FTE) student enrollment. For 12-month programs, this will be the care days for 10 months plus the care days for the July and August component. The total cost screen shall consist of two types:
(a) The hold harmless screen provides that if a program's per diem rate is reduced by the nondirect care cost parameter, the final per diem rate shall not be reduced from the previous year's per diem rate by more than the hold harmless percentage unless the reimbursable costs have decreased by more than the hold harmless percentage.
(b) The rate growth screen provides that a program's per diem rate from one school year to the next shall be limited to the documented rate of growth of per pupil expenditures for all public school districts on a regional basis multiplied by the rate of growth adjustment factor. The data used to determine the rate of growth of per pupil expenditures for public school districts shall be derived from the department's Information Center on Education report entitled “Annual Education Summary.”
(vii) The tuition rate calculation shall use the following formula: Per diem rate, after offsetting revenues and the application of the nondirect care cost parameter and the total cost screen, times the number of days in session, equals the per child tuition rate. Separate rates for the 10-month school year component and the July and August component shall be calculated using the same formula.
(viii) The tuition rate for special class programs seeking initial approval shall be based on the regional weighted average per diem tuition rate for two years until such time that the required financial statements and reports of the new program are received by the commissioner. Separate regional weighted average per diem tuition rates shall be used for school age programs and for preschool programs. The tuition rate for the third and subsequent years will be calculated using the methodology described in this subdivision only if the actual full-time-equivalent enrollment for the base year reported on the financial reports equals or exceeds the minimum number of full-time-equivalent students required for program approval, as prescribed in section 200.7(c)(3) of this Part. If the reported base year full-time-equivalent enrollment is less than the required minimum enrollment, then the program shall continue to receive the regional weighted average per diem tuition rate for the rate year until such time that the program's actual base year enrollment equals or exceeds the required minimum number of full-time-equivalent students.
(ix) The tuition rate for programs for preschool students with disabilities receiving special education itinerant services pursuant to section 4410(1)(k) of the Education Law, shall be established using the reimbursement methodology as set forth in paragraph (1) of this subdivision and subparagraphs (i) through (viii) of this paragraph, with the following modifications:
(a) Expenditures for teacher salaries and fringe benefits, expenditures associated with substitute teachers, as well as expenditures for nondirect care costs as set forth in paragraph (1) of this subdivision, are reimbursable.
(b) The tuition rate for providers seeking initial approval to provide special education itinerant services shall have the established reimbursement methodology applied to the submitted budget and related statistical data. Historical costs submitted for other approved programs operated by a provider, such as data pertaining to a special class program, may also be used to establish rates for newly approved special education itinerant service programs.
(c) Rates for the certified special education teacher providing special education itinerant services shall be published as half hour rates and billing by providers to municipalities must be done in half hour blocks of time. Billable time includes time spent providing direct and/or indirect special education itinerant services as defined in section 200.16(i)(3)(ii) of this Part in accordance with the student's individualized education program (IEP). The difference between the total number of hours employed in the special education itinerant teacher's standard work week minus the hours of direct and/or indirect special education itinerant service hours must be spent on required functions. Such functions include but are not limited to: coordination of service when both special education itinerant services and related services are provided to a student pursuant to section 4410(1)(j) of the Education Law; preparation for and attendance at committee on preschool special education meetings; conferencing with the student's parents; consultation with the student's regular early childhood provider, classroom observation; and/or travel for the express purposes of such functions as stated above. For the purpose of this subparagraph, parent conferencing may include parent education for the purpose of enabling parents to perform appropriate follow-up activities at home. Billable time shall not be less than 66 percent of any special education itinerant teacher's total employment hours; provided that the approved reimbursement methodology, developed by the commissioner and approved by the Director of the Budget, may adjust this billable time threshold. Providers shall maintain adequate records to document direct and/or indirect service hours provided as well as time spent on all other activities related to each student served.
(d) Special education itinerant service rates will be calculated so that reimbursable expenditures shall be divided by the product of the number of days in session for which the program operates times the number of direct and/or indirect special education itinerant service hours per day times two. In instances where special education itinerant services are provided in a group session, i.e., two or more students with a disability within the same block of time, the half hour rate must be prorated to each student receiving services. Special education itinerant service rates shall be paid based on the number of half hour units delivered, provided that the total number of units delivered shall not exceed the recommendations for such services in the student's IEP.
(e) Actual expenditures, revenues and statistical data for special education itinerant teachers shall be reported to the commissioner as described in subparagraph (1)(i) of this subdivision.
(f) Expenditures for related services as defined in section 4410(1)(j) of the Education Law and section 200.1(gg) of this Part are not reimbursable in the calculation of the tuition rate for special education itinerant services.
(x) For the purpose of this subparagraph, integrated special class programs are defined as those programs employing a special education teacher and one or more supplementary school personnel in a classroom made up of no more than twelve preschool students with and without disabilities, or a classroom that is made up of no more than twelve preschool students with disabilities staffed by a special education teacher and one or more supplementary school personnel that is housed in the same physical space as a preschool class of students without disabilities taught by a non-special education teacher. The tuition rate for preschool programs operating a special class as defined in section 200.16 of this Part in an integrated setting serving students with and without disabilities shall be established in accordance with the provisions set forth in paragraph (1) of this subdivision and subparagraphs (i) through (viii) of this paragraph, with the following additional provisions:
(a) Expenditures, revenues, full-time equivalent (FTE) enrollment, based on 25 program hours per week, and related statistical data for the preschool students with disabilities and the other students who are enrolled in the same program shall be reported together in a single cost center.
(b) After application of the nondirect care cost parameter, reported expenditures shall be reduced by the greater of actual revenues received for students without disabilities or an amount calculated by multiplying the reported FTE enrollment of students without disabilities times the regional day care rate or a proration of the regional day care rate for children aged 3 to 5, as published in 18 NYCRR 415.9, applicable to the time period for which the program operated. The total cost screen is then applied to the resulting expenditures to determine the total reimbursable costs.
(c) The per diem rate for each preschool student with disabilities shall be determined by dividing the total reimbursable costs by the total care days for the FTE enrollment of preschool students with disabilities.
(xi) Establishment of coordination rates by municipalities for service providers coordinating two or more related services pursuant to section 4410(10)(c) of the Education Law.
(a) A standardized method for calculating coordination rates for two or more related services established by the commissioner and approved in advance by the Director of the Budget shall include the following provisions:
(1) Rates shall be established on a half hour service block basis.
(2) The half hour rate shall be no greater than the related services rate per half hour established by the municipality and paid to the identified service provider.
(3) Periods of less than a half hour block of time may be aggregated into half hour service blocks of coordination services for billing purposes.
(4) The rate shall be paid for up to 10 sessions during the school year and up to two sessions during a summer program.
(5) In extraordinary instances, such as those instances where extended periods of time are necessary for the coordination of three or more related services, the municipality official may extend the number of service blocks for which the service provider will be paid. However, under no circumstances may the rate exceed the applicable related services rate. Municipalities must notify the commissioner in writing of each extension.
(b) Municipalities must annually submit to the commissioner the coordination rates established, as well as documentation describing the method used to calculate such rates.
(1) Rates calculated by a municipality using the standardized method as defined in clause (a) of this subparagraph will be deemed to be approved without further review by the commissioner and/or action by the Director of the Budget.
(2) Where municipalities use a method other than the one defined in clause (a) of this subparagraph, the alternative method must be reviewed by the commissioner and individually approved by the Director of the Budget.
(3) Tuition rate adjustments may be made to an approved tuition rate for the following reasons:
(i) Tuition rate appeals. A program may appeal the existing approved tuition rate for the current school year for the reasons specified in clauses (a) through (d) of this subparagraph if it can demonstrate that the program would have insufficient resources to meet the educational needs of the student population being served. Programs shall submit rate appeals in writing, including supporting documentation, in the specific format required by the commissioner and may request an opportunity to make an oral appeal presentation. The commissioner shall provide programs with a specific response to each appeal issue. Programs may file a tuition rate appeal for the current school year for the following reasons:
(a) Health and safety concerns relating to students or staff. This type of appeal may be filed at anytime during the school year.
(b) Compliance issues identified by the commissioner's designated representative in the current tuition rate year. If compliance issues are contained in a site visit written report that becomes final prior to January 1st, such issues shall be addressed in the current school year. Compliance appeals based on site visit reports received after December 31st shall be considered for inclusion in the subsequent school year's original rate. Appeal requests resulting from site visits must be submitted within 30 school workdays of receipt of the final site visit report issued by the commissioner's designated representative. Compliance issues must be adequately documented in all financial data submitted to the commissioner.
(c) Compliance issues identified by the commissioner's designated representative during a compliance review. The criteria that shall be used to initiate a compliance review to determine whether the program is out of compliance with State or Federal statutes or regulations include but are not limited to: complaints made by parents, school districts or any other party and/or requests made by a program for technical assistance regarding compliance. Appeal requests resulting from compliance review visits must be submitted within 30 school workdays of receipt of the letter from the commissioner's designated representative requiring the program to take corrective action. Compliance issues must be adequately documented in all financial information submitted to the commissioner.
(d) Approved staff not hired. If staff was approved and funded on appeal but not hired in that year and the funding was subsequently removed during the reconciliation rate process, programs may file an appeal for reinstatement of such funding for the approved positions in the appropriate tuition rate year. Such appeals must be filed within 30 school workdays of receipt of the reconciliation tuition rate. The additional reimbursement in the tuition rate year will be limited to those appeal items originally approved and only to the extent such monies are reflected in the base year financial statements as excess revenues. Programs must demonstrate that monies approved on appeal in the base year were not spent on any other type of expenditure and that the program has retained the approved appeal monies in a reserve or liability account.
(ii) Corrected rates. Tuition rates shall be subject to correction when mathematical errors are found in the rate calculation or there are reporting errors in the base year data. Requests for rate corrections shall be filed within 30 school workdays of receipt of the tuition rate by the program.
(iii) Reconciliation rates.
(a) Prior to and including the 1994-95 base year. Annually, upon receipt of financial statement and financial report data submitted by the programs, tuition rates for the period represented by this data shall be amended, in whole or in part, using such financial statement and financial report data and applying the approved reimbursement methodology in effect for that financial reporting period.
(b) For the 1995-96 base year and thereafter.
(1) Annually, upon receipt of financial statement and financial report data submitted by the programs, tuition rates for the period represented by this data shall be recalculated in whole or in part, using such financial statement and financial report data and applying the approved reimbursement methodology in effect for that financial reporting period for the specific purpose of developing the dollar amount of an overpayment/underpayment adjustment. Overpayment/underpayment adjustment means the difference between the recalculated base year reimbursable costs and the previously established certified tuition rate for that base year multiplied by the actual enrollment for the base year.
(2) The overpayment or underpayment adjustment on a per diem basis shall be subtracted from, or added to, total costs per diem after the application of the total cost screen calculation and before the per diem rate is multiplied by the number of days in session in the formula set forth in subparagraph (2)(vii) of this subdivision.
(3) The per diem rates used in the total cost screen calculation, as set forth in subparagraph (2)(vi) of this subdivision, shall exclude the overpayment/underpayment adjustment.
(4) If a program will not be in operation in the tuition rate year and subsequent years, no overpayment/underpayment adjustment shall be calculated. Instead, a reconciliation rate for this program will be established for the base year in accordance with clause (iii)(a) of this paragraph.
(iv) Rates based on audit. Tuition rates shall be subject to adjustment based on a final audit of actual program expenses, revenues, enrollment and other relevant program information in accordance with section 200.18 of this Part.
(v) Rates for new special case programs. The department will accept a written request from a program to adjust rates established for the third year of operation which were based on a regional weighted average per diem, if the program demonstrates that the third year full-time-equivalent enrollment equals or exceeds the required minimum number of full-time-equivalent students in accordance with section 200.7(c)(3) of this Part.
(4) Regional maximum per trip rates for students receiving transportation services under section 4410 of the Education Law.
(i) Definitions. As used in this paragraph:
(a) Base year means the July 1st through June 30th school period that is two years prior to the school year for which the regional maximum per trip rates are calculated.
(b) Base year data means the financial information and relevant student statistics that correspond to the base year to be used as the basis for the regional maximum per trip rate calculations. However, if the commissioner in any given year determines that the base year data is materially incomplete, then the year prior to the base year data shall be used.
(c) Student transportation expenses means base year approved transportation. For rates applicable to reimbursement in the 1997-98 and 1998-99 school years, such data shall be that reported from the placement/payment code 20 on the system to track and account for children which classifies data for preschool students receiving services pursuant to section 4410 of the Education Law; in future years, such data shall be from such system or a successor system, as determined by the commissioner.
(d) Region means a municipality, except that the five counties constituting the City of New York are considered one region.
(e) Student means a preschool student with a disability enrolled in an approved program pursuant to section 175.6 of this Title and section 4410 of the Education Law.
(ii) Regional maximum per trip rate methodology.
(a) Data reported in the manner prescribed by the commissioner in support of the requirements of section 4410, relative to per student transportation expenses, shall be used to determine the regional maximum per trip rate.
(b) For the 1997-98 and 1998-99 school year, the basic formula to be used to calculate the regional average per trip rate is as follows: (the sum of base year transportation expenses of students enrolled for 210 days who are transported within the region divided by the number of students enrolled for 210 days who are transported within the region) divided by (210 transportation days times two trips per day); such result equals the base year regional average per trip rate before limiting. For the 1999-2000 school year and beyond, the basic formula to be used to calculate the regional average per trip rate is as follows: the sum of base year transportation expenses claimed for students transported within the region divided by the one way trips within the region claimed on an enrollment basis; such result equals the base year regional average per trip rate before limiting.
(c) For the 1997-98 and 1998-99 school year, the statewide average per trip rate equals: (the sum of base year transportation expenses of students enrolled for 210 days who are transported within the State divided by the number of students enrolled for 210 days who are transported within the total State) divided by (210 transportation days times two trips per day). For the 1999-2000 school year and beyond, the basic formula to be used to calculate the State average per trip rate is as follows: the sum of base year transportation expenses claimed for students transported within the State divided by the one way trips within the State claimed on an enrollment basis.
(d) The regional average per trip rates will be calculated using twelve month (July to June) data for per student transportation expenses unless the regional average per trip rate separately calculated for the July/August component of the school year exceeds the regional average per trip rate for the 12-month school year by more than 15 percent, then separate July/August and September through June per trip rates will be calculated.
(e) The base year regional average per trip rate will be trended forward by the regional growth factor, which shall have been approved by the Director of the Division of the Budget, for the purposes of establishing tuition rates as described in clause (2)(vi)(b) of this subdivision.
(f) Regional maximum per trip rates shall equal the regional average per trip rate but shall not be more than 25 percent greater than the statewide average per trip rate.
(g) Regional maximum per trip rates shall be approved by the Director of the Division of the Budget.
(iii) Recordkeeping and retention. Municipalities shall maintain detailed student records and accounting records to document and support their claims. At a minimum, such records shall include trip logs by type of placement, as prescribed by the commissioner, transporter name, vehicle classification (parent vehicle, taxi, yellow bus by capacity range, and public service), number of one-way trips contracted for on an enrollment basis, number of students transported, total amount of the transportation expenses paid by the municipalities for each claiming period, date(s) paid, amount of the State's share being claimed, student identification numbers for students transported and proof of the committee on preschool special education placement for each child. The department will audit regional claims according to an established schedule. Municipalities must maintain all records until an audit by the department relating to the transportation expenses has been completed and is final, but for no longer than seven years following the end of the school year.
(iv) Reimbursement. Municipalities shall be reimbursed on an aggregate basis for transportation expenses equal to the product of the regional maximum per trip rate and the number of trips claimed on an enrollment basis or the actual expenses claimed, whichever is less. In processing each claim for a school year, the department shall compute the regional maximum allowable reimbursement based on the product of the year-to-date number of one-way trips claimed on an enrollment basis by the municipality by the established regional maximum per trip rate. Payment will be made for aggregate claims up to such regional maximum allowable reimbursement minus any payments previously made year-to-date for such school year.
(v) Appeals. Upon submission of the final claim for school year, municipalities may appeal the regional maximum per trip rate if the actual transportation expenses exceeded the regional maximum per trip rate times the number of one-way trips, provided the reason for that excess was due solely to the increase in the number of students with unusual transportation related needs due to medical or behavior conditions. Municipalities must provide all relevant documentation to the appeal. Any regional transportation maximum per trip rate amended on appeal must be approved by the Director of the Division of the Budget.
(g) Procedures during close-down period. The owner(s) or operator(s) of an approved private program electing to cease operation, transfer ownership or voluntarily terminate the status as an approved program shall comply with the requirements of section 200.7(e) of this Part. For purposes of this subdivision, the close-down period means the period of time beginning with the date of the commissioner's receipt of notice and ending on the date of the program's cessation of operation, transfer of ownership or voluntary termination of its status as an approved program. Reimbursement shall be determined in accordance with the provisions set forth in paragraphs (f)(1) and (2) of this section. Financial reporting requirements following close down shall be in accordance with the provisions set forth in paragraph (e)(1) of this section. Such financial reports and financial statements shall be submitted to the commissioner no later than 90 days following close down.
(h) State aid for maintenance payments to private schools.
(1) Prior to contracting with an approved private residential program for the instruction of a student with a disability, in accordance with the provisions of section 4402 of the Education Law, a board of education shall notify the commissioner of the name and the county of residence at the time of the commencement of the school year for which tuition is to be paid for such student, the name and address of such private residential program recommended, and the dates upon which such program will commence and terminate residential care of the student. Evidence shall also be submitted that there is no appropriate nonresidential program available.
(2) Upon approval of the proposed placement, the commissioner shall notify the appropriate social services district of the placement of a student in a private residential program and of its obligation to pay for the maintenance of such student at the approved rate established by the Department of Social Services pursuant to the provisions of section 4405 of the Education Law and section 153 of the Social Services Law.