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Special-Needs Schools Salaries Draw Scrutiny of State Auditor

Some earn $50,000 more per year than maximum allowed in public-school districts.

The salaries of top administrators at private special-needs schools have drawn the attention of a state watchdog, who said dozens of school directors make far more than allowed for their colleagues in public schools.

A new report from the Office of the State Auditor says at least some of the state’s nearly 200 private special-needs schools – which are funded by public schools that send students to them -- pay exorbitant salaries to their top administrators and that the state has done little to rein in those salaries.

For instance, the report said one school with just 110 students pays each of two directors $225,734 a year, the maximum allowed for the private schools under state regulations. Forty-four directors at 32 schools were making more than the $175,000 maximum for superintendents in public school districts, which was imposed by Gov. Chris Christie amid controversy three years ago.

A total of “19 executive directors and/or directors at 13 schools, with an average enrollment of 200 students, made the maximum of $225,734,” the report said.

The report, released Monday, examined oversight of special-education programs and found that the state has met many of the state and federal requirements in that regard.

But toward the end of the eight-page report, State Auditor Stephen Eells takes a critical look at how the state has overseen private special- education schools, which serve about 8 percent – or close to 15,000 – of the state’s students with disabilities.

Without naming names or the schools, the report also said that one-fifth of the schools employ family members of their directors. One school’s director is also providing the food-service contract at five times the average cost of other schools, the report said.

Eells, the longtime head of the office, said in an interview yesterday that these schools are not necessarily the norm, and none of them appeared to be breaking the law or regulations. The audit report included no referrals for further investigation.

But he said that’s a big point of his findings, with the state providing little guidance and even less monitoring to control such costs. In another part of the report, Eells said required fiscal reviews of the schools were woefully behind schedule.

“These are definitely exceptions to the rule,” Eells said yesterday of the cited schools. “But what we are looking for is that there be a rule.”

Asked if anything surprised him in the review, one of many his office has conducted of the private schools over the years, Eels said it was the lack of state regulations specifying costs for specific roles.

“What surprised us was the lack of criteria,” he said. “Were we surprised at some of the salaries, too? Sure we were, but without any criteria or expectation from the state, it’s hard to say what is right or wrong.”

State Department of Education officials, in their formal response attached to the end of the report, said that the recommendations would be considered and additional administrative code is already in the works.

The response said that the state’s compliance office has historically been understaffed, but a top state official said yesterday said that additional staff has already been added to complete reviews in the private special-needs schools, specifically for criminal background checks that had also been cited as lagging.

"We deployed nine investigators into every (private special-needs school) in the state last month to ensure that all appropriate staff have completed background checks,” said Justin Barra, the department’s director of policy and public outreach.

Under state Education Commissioner Chris Cerf, the department is also proceeding with new state administrative code that would seek to control the costs further, Barra said.

Appointed by Christie, a task force looking at education-related regulations and red tape suggested last year that tuition caps be considered for the private schools as a way to control costs.

Among the recommendations in the report was eliminating the “requirement for a full-time, non-teaching principal, as some [schools] operate innovative models that do not require such an administrator. This modification would reduce personnel costs, ultimately benefiting taxpayers."

"The Education Transformation Task Force report recommended a number of ways to contain costs for (private special-needs schools) through regulation, and the Department is reviewing and considering those recommendations," Barra said.

But such regulations can be a long time coming, in part because there are strong interest groups in the special-education community.

The head of the state association representing special-needs schools yesterday defended its members as providing needed services to students at costs that are warranted and fully comply with the state’s own regulations.

“The maximum salary was set up and approved by the State Board of Education in 2001, and works with a formula set every year off what a comparable public school administrator makes in a similarly sized district,” said Gerard Thiers, the group’s executive director. ”That’s how the system works.”

He added that comparing the salaries of special-needs administrators to those of public school administrators can be misleading, considering the pensions and benefits afforded public employees.

“On the benefit side, there is no comparison,” he said.

Still, Thiers said the association was open to talking more with the state about new regulations and guidelines.

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