Can anyone explain to me what the law is in New York state in regards to who issues an IEP Diploma?

My son graduated from a New Jersey ABA school. We live in New York. The other graduates Districts are giving them Diplomas. Our District told the school we don’t do this.
Why would our District behave this way?
I have a strong suspicion they are legally and morally wrong.
Are they simply too lazy or incompetent to do the right thing?
Some of the staff are decent people. Others lack any ability. Other than attempting to abuse children and parents. NO one ever took advantage of us. I always won.
Can you help me please? Thank you