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Over the last decade, New York City has faced a startling rise in requests to pay for special education services for private school students, a deluge that has cost billions of dollars and raised concerns about fraud.
The requests have disproportionately come from Orthodox Jewish neighborhoods, where private education companies have sometimes billed for services that were not needed, or even provided, The New York Times reported last year.
Now the city has a plan to step up oversight.
This week, officials announced that before agreeing to fulfill new requests, they will insist on proof that the student’s family actually wants the aid and that the services will be provided by qualified professionals. They added they will no longer pay more than $125 an hour for the services, unless ordered to do so.
The changes represent a major shift. For years, officials have agreed to almost all requests, even when it meant paying exorbitant rates to inexperienced providers.
Liz Vladeck, general counsel for the New York City Department of Education, said in a letter to state officials, lawyers and special education organizations on Wednesday that the city was obligated to ensure that the requests for services were legitimate and, “most of all, “that those services indeed provide children with what they need to succeed in school.”
She described the new measures as “basic, low-bar controls.”
The city declined to comment on the letter.
A lawyer representing several education companies that provide services in Orthodox schools acknowledged a request for comment but did not respond further.
New York law requires cities to provide special education to students who need it in private schools, even if the government has to pay outside companies to do it.
Families can find their own service providers and ask the government to reimburse them. To receive funding, they must convince hearing officers that their children need the services and cannot get them from the government, and that the outside provider can help.
The Times reported last December that many special education providers in the Orthodox community, and the Hasidic community in particular, had received a windfall of taxpayer money for these services.
Of about 17,900 requests in the 2021-22 school year, more than half came from five community school districts with heavily Orthodox neighborhoods. A decade earlier, there were fewer than 5,000 requests annually.
The Times also found that many companies in the Hasidic community employed inexperienced providers and charged upwards of $200 per hour. In proceedings involving Hasidic children, some parents had not seemed to know what they were requesting, or why.
In January, an executive tied to some of the education firms, Martin Handler, was charged with theft of government funds and wire fraud conspiracy. In February, officials temporarily stopped doing business with 20 companies that provided services in private Jewish schools. Mr. Handler’s case is still pending; a trial is scheduled for next July.
The city comptroller released a report in August that called for changes to improve the city’s own services and reduce the number of special education funding requests.
In her letter, Ms. Vladeck said the number of funding requests had continued to increase this year, with a growing share asking for “special education teacher support services,” which providers like to tutoring and say is especially prone to abuse.
Ms. Vladeck said officials had noticed problems, including that “providers are of poor or even incomprehensible quality.” And she said some had maintained a presence in schools and urged parents to have them request services on their behalf.
The letter did not mention Orthodox schools, but did refer to Mr. Handler’s case.
Gedalia Stern, a lawyer for Mr. Handler, said this week that he and his family no longer had ownership interests in special education companies.
The changes in the city’s response to requests represent a move toward the posture it had adopted under former Mayor Michael R. Bloomberg, when it more aggressively fought requests in hearings. In 2014, former Mayor Bill de Blasio began fast-tracking approvals, saying special education was too hard to access.
As the new letter circulated, some hearing officers and lawyers for families seeking services criticized city officials for trying to sway the legal process by sending a broad missive.
They noted that the letter barely acknowledged that the city had a responsibility to serve children who needed aid.
The city Office of Administrative Trials and Hearings, whose officers preside over many funding request hearings, said in its own letter on Friday that it was inappropriate for the Education Department to broadcast its thoughts to hearing officers.
The letter came the week after New York became one of just a handful of states to ban corporal punishment at private schools, following another Times report that found that students in Hasidic schools were regularly hit by their instructors.
That report also revealed a lack of basic secular education in many Hasidic schools, especially ones that enroll only boys.
In June, the city announced that it had examined more than two dozen such schools, and determined that 18 were not providing adequate secular instruction.
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