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Liu eschews own audit to focus on Medicaid reimbursements

New York City Comptroller John Liu’s audit into the city’s embattled special education data system, released today, hammered home well-established issues, but found few new problems with the three-year-old initiative.

Liu, who is running for mayor, instead used the occasion to highlight a challenge not mentioned in the audit — the city’s ongoing struggle to get reimbursed for low income students with disabilities who are entitled to federal Medicaid dollars. Over the last two years, the city has collected just 25 percent, or $74 million, of the $284 million amount that the city had hoped to be reimbursed for, Liu said today at a press conference.

Liu took the finding from a city budget report published this spring. But he said that responsibility for the losses lies with the city’s data system, which his audit criticized.

The data system, built to track 190,000 special education students with Individualized Education Plans, makes it “practically impossible” to file for reimbursements, Liu said, a claim that a city spokesman later disputed.

Schools began using the Special Education Student Information System (SESIS) in 2011 to keep better track of students with disabilities. School staff working with special education students are required to log information about all stages of their IEPs, including details about initial assessments, meetings with parents, services provided, and changes made to the plan.

But the system encountered glitches almost as soon as it was deployed in schools, with staff who used it complaining of frequent crashes, slow processing speeds, and a host of other technical problems. Logging information into the system was so tedious that an arbitrator ordered the city to pay out $38 million in overtime to more than 30,000 educators.

The city has so far paid $67 million to Maximus, Inc., a vendor that was picked to oversee development of the contract.

Liu’s audit looked at problems reported beginning in May 2010, when the department migrated student information from the many databases that had previously stored special education data. The reports show that while student data errors are on the decline, peaking at more than 400,000 in September of the 2012-2013 school year, there were still more than 100,000 errors as recently as April.

The audit also found instances of duplicate student records and that nearly 4,000 IEPs had to be manually changed during a three-month span this year.

But the system isn’t as unpopular with staff users as critics have indicated, according to the audit, which conducted a survey as part of the audit. Of nearly 600 educators who responded to the survey, just 7 percent said they were “not at all” satisfied with the system. More than 25 percent said they experienced glitches while using the system.

Department officials slammed the audit’s methodology and criticized it as being politically motivated based on Liu’s mayoral ambitions.

“This is an election year and it is imperative that the agenda of candidates for higher office not affect the running of the schools system,” said Marcus Liem, a department spokesman.

In its official response, the Department of Education complained that Liu’s audit was ill-timed. The Comptroller conducted the audit too early into the SESIS rollout, while it was still an “unfinished data system” that was still being built, the department said. They also said that Liu’s office declined to go along with the city’s request to delay the audit until after they had resolved the dispute with the teachers union about overtime pay.

Liem also disputed Liu’s claim that the city’s failure to collect Medicaid reimbursement was linked to SESIS issues. “Medicaid reimbursements are not affected because of SESIS,” he said. “That is completely false.”

Liem said a larger concern was that the state was not going to accept previously collected Medicaid forms when a new state law went into effect this spring, meaning the city would have had to recollect 110,000 forms. “But the State has since said that they would accept the old forms so this is no longer an issue,” Liem added.

Testifying at a City Council hearing earlier this year, Walcott said he expects to claim up to $40 million in reimbursements thanks to a new $1.2 million contract with Public Consulting Group. The contract is meant to make it easier for the city to collect reimbursements for students with disabilities who attend private school and whose tuition is covered by the city.

John Liu special education audit — Special Education Student Information System (SESIS)