A Comptroller follow-up audit released July 23 found NYC Public Schools failed to collect as much as $431.6 million in Medicaid reimbursements over three fiscal years for special education services — the same systemic billing failure a 2021 audit had already flagged, and NYCPS had still not fixed.

City Comptroller Mark Levine released a follow-up audit July 23 finding that New York City Public Schools has left as much as $431.6 million in Medicaid reimbursements uncollected over three fiscal years for special education services — the same systemic billing failure a 2021 Comptroller examination had identified and NYCPS had still not corrected.

The gap breaks across three documented categories: $273.4 million in occupational, physical, and speech therapy delivered to Pre-K through 12th-grade students that was never billed to Medicaid; $132.8 million in mandated services that may have been provided but lacked the documentation Medicaid requires to file a claim; and $25.4 million in unclaimed services delivered across medical, OT, PT and ST evaluations and reevaluations, as well as psychological counseling.

Auditors identified two compounding failures. NYCPS bills Medicaid for only three of the ten service types the federal program covers, leaving the other seven unclaimed entirely. Even for those three, the system successfully recovered reimbursement on fewer than half the sessions it intended to submit — under Medicaid rules, a single missing documentation field voids a claim. The audit further found that NYCPS has no record of providing 16.2 percent of the OT, PT, or ST sessions mandated in students' Individualized Education Programs, meaning those legally required services were either not delivered or not documented.

"Failing to collect Medicaid reimbursements the City is entitled to is more than a fiscal problem — it raises serious questions about whether government is operating as effectively as New Yorkers need it to," Levine said. "When NYCPS cannot reliably claim federal dollars for services it already provides, and cannot consistently document whether mandated services were delivered, students, families, and taxpayers all lose."

NYCPS did not respond to a request for comment by deadline.

The follow-up mechanism is central to how Levine has structured his office's oversight posture: the 2021 examination flagged the identical billing gap, and this week's release shows the systems remain unchanged five years on. The $431.6 million represents federal dollars the city is already legally entitled to claim for services NYCPS is already paying to provide.

The audit arrives as Chancellor Kamar Samuels faces compounding pressure from multiple fronts. As The Dissent reported in July, Council Speaker Julie Menin has pressed Samuels for records on 352 no-bid DOE contracts, and a separate Council investigation is underway into a $180,000 no-bid agreement at the school system allegedly structured to evade competitive-bidding rules. The $431.6 million in uncollected federal reimbursements adds a Comptroller-level dimension to scrutiny of an agency already navigating several open oversight tracks — and arrives as the city works through a tight FY27 budget.