Press Release  Central Massachusetts Special Education Collaborative Overcharged Member Communities

Boston — An audit of the Central Massachusetts Special Education Collaborative (CMSEC) issued today by State Auditor Suzanne Bump revealed the multi-community partnership charged its member school districts fees that exceeded the actual costs, resulting in a multi-million dollar surplus. 

“The problems we found at the Central Massachusetts Special Education Collaborative are typical of those found in past audits of the education collaborative system,” said Auditor Bump.  “Our audits of collaboratives have provided the basis for meaningful reform.  I hope this audit will continue to assist policy makers in strengthening the oversight and accountability of Education Collaboratives.”

Today’s audit shows that CMSEC, an association of Worcester and Webster school districts that is responsible for providing educational services to approximately 500 special needs students, was charging its member communities in excess of the programs’ actual cost, resulting in a surplus of more than $4.5 million.  Guidelines set by both the Massachusetts Department of Revenue and the Office of the Attorney General state that fees from a government agency should not exceed the actual cost of the service provided.  Auditor Bump recommended that the collaborative amend its pricing methodology and establish an appropriate method to remit surplus funds to its member districts.

The report also highlighted CMSEC’s failure to properly administer its retirement benefit program.  In 1985, non-teaching Massachusetts education collaborative employees were prohibited from further participating in Social Security and instead were required to enroll in the state’s retirement system.  However, the audit found that CMSEC never transitioned employees from Social Security to the state system and, as a result, denied some employees the opportunity to receive thousands in additional annual retirement income. 

In addition, the audit noted deficient internal controls over certain financial and management activities at CMSEC.  For example:

• CMSEC did not have set policies and procedures for the procurement of goods and services.  During the period of review, auditors found CMSEC spent $24,000 on procurements without soliciting competitive bids.
• Collaborative employees were not required to submit adequate documentation to justify expenses.  In a sample, Auditors found $21,314 in expenses that either lacked any supporting documentation or lacked an identified business purpose.
• Errors made in payroll records led to employees earning $1,630 in unearned sick time. 

Last year Auditor Bump released a series of education collaborative audits which detailed a pattern of problems across the entire education collaborative system.  She issued those audits along with a set of recommendations to enhance financial accountability and to improve oversight of collaboratives by state and local authorities.  These recommendations were the foundation for a major reform legislation signed into law this year by Governor Deval Patrick. 

“I am pleased to have worked with the Chairs of the legislature’s Education Committee, Representative Alice Peisch and Senator Sonia Chang Diaz, to use the result of our past audits of collaboratives to generate real reform,” said Auditor Bump. “The recently passed reforms will address findings from this audit.  Collaboratives are now required to follow generally accepted accounting standards and must form new written agreements with their member communities that set limits on allowable surpluses.”

CMSEC has responded positively to all findings and is pursuing implementation of all of Auditor Bump’s recommendations.

The Central Massachusetts Special Education Collaborative (CMSEC) audit is available here.

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