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A private Salt Lake City school wrongly claimed at least $28,420 in state scholarship money meant to help special needs students, according to a new state school board audit.

The SEPS Learning Center took the Carson Smith Special Needs Scholarship cash this school year for a number of students who either never attended SEPS or left during the school year, according to the audit. The state school board is now asking the school to repay the money to the state and is reporting the matter to Utah Attorney General's Office.

The Carson Smith program provides $4,263 to $7,105 to special needs students in Utah to help them attend private schools, and it cost the state a total of $3.75 million this school year, said Peggy Milligan, a special education coordinator at the State Office of Education. This year, 43 private schools across Utah participated, and lawmakers recently voted to put additional money toward the program to help it expand.

Milligan called the issue with SEPS "very unusual."

Susan Bradshaw, a spokeswoman for the school, said it was not purposefully or knowingly claiming money it shouldn't have.

"I think there were some misunderstandings about who could be counted," Bradshaw said. "It's being resolved and the school has every intention of meeting the state's demands."

Bradshaw said that includes paying the state back the $28,420.

SEPS' website describes it as a 35-year-old private school and clinic that specializes in educating traditional students as well as those with language processing deficits, learning difficulties or individual learning styles that hamper their academic achievement.

Bradshaw said the school serves about 20 to 30 kids, about two-thirds of whom receive Carson Smith scholarships. She said many of the rest attend for free, noting that the school's director is committed to serving kids with special needs regardless of the money.

Natalie Grange, internal auditor for the state school board, said auditors began looking into SEPS after hearing a number of complaints that the school was getting money for students who weren't there.

The audit also questioned another $17,600 in payments made to SEPS last school year. According to the audit, that money went toward payments for four students, one who may have never attended and three who were only using a software program provided by SEPS, contrary to scholarship requirements.

But the state is not requesting repayment of that money partly because a lack of records at the school for that year makes it difficult to verify exactly what happened, Grange said.

The audit recommends SEPS stop claiming payments for students who are not physically attending the school; develop a more reliable student attendance and tracking system; implement independent reviews; consider hiring a business manager; and better secure Carson Smith checks, among other things.

A separate April state school board audit also looked at the State Office of Education's monitoring of the Carson Smith program in general. That audit found insufficient monitoring of the program's enrollment, attendance and eligibility requirements and a lack of guidance in state law and board rules for the program.

"The lack of a sufficient monitoring process resulted in scholarship payments being made to SEPS that were not appropriate, and increases the likelihood that the same types of payments could be occurring at any of the other Carson Smith eligible schools," that audit said.

The state office's special education department agreed with those findings and pledged to make changes immediately.

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