Comptroller Audit Finds NYC Schools Failed to Collect Up to $431M in Medicaid Reimbursements for Special Education Services

July 23, 2026 - 22:36

New York, NY - A new audit from the Office of Comptroller Mark Levine has revealed that New York City Public Schools failed to collect as much as $431.6 million in Medicaid reimbursements over three fiscal years. The money was meant to cover a range of services for students with disabilities, including speech therapy, physical therapy, and counseling.

According to the audit, the school system did not claim hundreds of millions of dollars in reimbursements it was eligible to receive. In many instances, auditors found that the city either failed to submit claims or did not properly document the services provided to students. Without adequate documentation, the city could not prove the services were delivered, making them ineligible for federal matching funds.

The report covers the fiscal years from 2021 through 2023. During that period, the city spent heavily on special education but left significant federal money on the table. Comptroller Levine said the missed reimbursements represent a major loss for a system that is already underfunded. He called on the Department of Education to improve its record-keeping and billing processes.

School officials acknowledged the findings and said they are working to fix the problem. They pointed to ongoing efforts to train staff and upgrade technology used for tracking services. However, the audit suggests that without major changes, the city will continue to lose out on millions of dollars each year that could be used to support students with special needs.