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Defunct Astoria biz school owes $4.8M to state: Audit

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During a three-year period that ended June 30, 2001, the audit found that the school recklessly gave Tuition Assistance Program grants to scores of unqualified students.To qualify for the grants, which do not have to be repaid, students must have good grades and be enrolled in a business school with State Education Department-certified teachers. Students are also restricted to state-approved curriculums, in which they receive at least 1,440 instructional hours, the audit stated. It found that Drake often disregarded these standards.Among the most stunning grant misallocations are $139,068 to 71 students enrolled in unapproved programs; $137,998 to 72 students not taking enough classes; $5,357 to three students who were failing; and a total of $16,363 to nine students who technically were not even matriculating at the school.The report said state law requires that students possess a high school or general equivalency diploma to go to a registered business school. The audit found that four of Drake's students had no proof of high school graduation and another four were enrolled by school officials without state certifications. The school did not even have an admissions file for the last student, the report stated.Hevesi recommended that the agency that administers the grants, the Higher Education Services Corp., recover a total $4,839,675 plus interest from the defunct non-profit school with branches in Astoria, the Bronx, Manhattan and Staten Island. The 131-year-old school, which offered medical and office assistant certificates, closed June 1, less than two weeks after president and chief executive David Cary Hart, 54, was shot in the buttocks walking through a Steinway Street subway turnstile.A school official said it would take a year for the Manhattan resident to recover from his wound. No arrests were made and police said the investigation was ongoing.Drake had roughly 1,000 students, 260 of whom attended classes in its Astoria branch at 32-03 Steinway St. Many of them were shocked when, on the first day of summer classes, officials told them that the school was folding under overwhelming financial strains.School board members said at the time that they were relying on Hart, who took the reins of the institution in February, to steer them out of their troubles. They decided to fold when they learned he would be out of commission for 12 months.The school filed for bankruptcy June 3 in U.S. Bankruptcy Court in Brooklyn. Reach reporter Matthew Monks by e-mail at news@timesledger.com or by phone at 718-229-0300, Ext. 156.

Posted 7:22 pm, October 10, 2011
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