NYS Comptroller: Buffalo Public Schools overpaid charters by $1 million

Nov 21, 2019

A recent audit conducted by the Office of the New York State Comptroller found that Buffalo Public Schools overpaid charter school tuition by $1 million during the 2017-2018 school year and has likely made further overpayments in past years.

While the audit was conducted in August, representatives of the Buffalo Board of Education discussed it Wednesday with the district’s Chief Financial Officer Geoffrey Pritchard at the monthly school board meeting.

Families attend a welcome event at Persistence Preparatory Academy, one of Buffalo's two newest charter schools, in July 2019.
Credit Kyle S. Mackie/WBFO News

“We’re still looking at going back as far back as we can go to see how far back these [overpayments] may be, and then we will reach out to the charter schools and use whatever means we can to try and collect any prior overpayments,” Pritchard said.

The state distributes per pupil funding to charter schools, which are publicly funded but independently operated, through the public school districts in which they are located. So, Buffalo Public Schools distributes that money to the charter schools in the city. Public school districts are also required to pay charters an additional portion of tuition for the students they serve with disabilities, and that’s where BPS overpaid.

“Charter schools have for some time, actually, been submitting invoices that were using an older calculation that charged the district a higher amount,” Pritchard said.

The outdated formula, however, was given to the charter schools by the district, according to the audit.

“District officials did not include the proper formula for the PECA [Public Excess Cost Aid] set-aside amount in the billing template they provided to charter schools,” the audit read. “Instead, they used an outdated PECA formula.”

It’s possible the formula the district was using was obsolete by the 2007-2008 school year, when the New York State Education Department implemented a new PECA formula for students with disabilities attending charter schools. A senior budget examiner for the district told auditors the billing template sent to charter schools was “in use when he started at the District in 2007, and the formula has not been updated since that time.”

Pritchard said the error is now corrected for the 2018-2019 school year and moving forward, but the audit found that BPS would have overpaid charter schools by $1.7 million for last year if the audit hadn’t uncovered the outdated formula in time.

School board members asked Pritchard and General Counsel Nathaniel Kuzma if recouping past district overpayments to charter schools could become a legal issue at Wednesday’s meeting. Kuzma said the district first has to determine exactly how much was overpaid to which specific charter schools, after which he suggested the board discuss its options for recovering the funds during future meetings of the board's finance and operations committee.

Kuzma also acknowledged the slim chance that charter schools will make voluntary repayments to the district, saying, “You can guess how successful we’re going to be.”

Still, the district’s corrective action plan submitted to the Comptroller’s office on Nov. 9 said letters will be sent to each charter school by Nov. 30 detailing past overpayments and requesting reimbursements.