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KIRYAS JOEL — Kiryas Joel School District has been ordered to repay $276,443 in federal funds that were spent improperly on rent for the district’s only school building, according to a recently completed audit.
The review by the Inspector General’s Office of the U.S. Department of Education found that the district appropriately spent most of the more than the $5 million in Title I funds it got from September 2008 through August 2009 to provide remedial services for low-income students.
But auditors concluded that no funds should have been used for rent and questioned the paperwork that the district used to justify $191,124 in Title I money it spent on overtime for eight employees participating in an after-school program.
The state Department of Education later agreed to demand the district return $276,443 and stop using Title I money for rent, but accepted affidavits from the district as sufficient evidence for the overtime pay.
In a response submitted to federal officials Tuesday, Kiryas Joel administrators challenged the demand for repayment and stood by their decision to pay 15 percent of the school’s rent with Title I funds. That expense reflects the portion of the school that is used to provide Title I services, Superintendent Joel Petlin said.
The district, created in 1990 to provide special education for handicapped students within the Hasidic community, had only 123 full-time students at the time of the audit. But it also provides busing for roughly 6,000 children attending Kiryas Joel’s religious schools and funds remedial classes for several hundred students in those private schools.
In 2008, the district moved classes from its cramped quarters on Kahan Drive to a spacious new building on Dinev Court and began paying rent to a development arm of the community’s religious school system, which is known as the United Talmudical Academy.
The federal audit report, dated Feb. 2, calculated that under current practices, the district would spend an additional $5.2 million on rent during the remainder of the 30-year lease. That money “could be better used for the students of Kiryas Joel,” auditors argued.