While the mayor boasted about the success of the newly revamped Build It Back program, which has begun construction on 132 homes since he began his term, City Comptroller Scott Stringer blasted the Department of Homeless Services (DHS) for improperly managing emergency contracts after the disaster, resulting in the improper use of taxpayer dollars to pay for services that may not have been needed or actually performed.
According to Stringer, who examined eight of the 20 emergency contracts DHS entered into after the storm for his first Sandy-related audit, DHS did not provide proper oversight of the contractors hired to provide emergency shelter and other services for displaced New Yorkers.
“The mismanagement of contracts by the Department of Homeless Services after Superstorm Sandy made the city vulnerable to waste, fraud and abuse,” Stringer said. “Clear contract oversight procedures and vigilant monitoring are crucial, especially in a crisis situation. DHS and all city agencies must plan intelligently and transparently for the next emergency, because there will be another. We can’t afford to be unprepared.”
DHS contracts totaled $19.9 million, with provided services ranging from assistance applying for public benefits to help with securing permanent housing or home repair.
When asked about procedures used to monitor those contracts, DHS did not provide any. The agency claimed that this was due to the fact that the contracts were overseen during an emergency situation, according to Stringer, but he pointed out that of the 20 contracts, 14 were extended well beyond the storm’s immediate aftermath.
The audit also found that there was no evidence that DHS had overseen or monitored contracted work. There were no written reports or records of site visits or monitoring tools. The department also did not conduct satisfaction surveys of shelter clients.
Finally, Stringer found that invoices were not adequately reviewed prior to payment, which resulted in managers paying for services that were outside the contract scope, ineligible or unsupported.
A release about the report cited two examples where DHS paid the invoice for services performed outside of the contracted period. One vendor, Women in Need, claimed $28,000 for maintenance and cleaning during January 2013, even though the contract ended December 23, 2012. Help U.S.A. charged the agency $2,878 in personal service costs for at least 11 of the provider’s staff for days outside the contract period.
“Taxpayers deserve to know that city government isn't going to make the same mistake twice when the next storm hits,” Stringer said. “By vigilantly monitoring operations and contractors, city agencies can ensure every tax dollar devoted to relief is spent prudently and efficiently, while also assuring that the city is reimbursed by the federal government for all eligible costs.”
Stringer made recommendations to DHS to address these issues with oversight and management, which DHS largely agreed to follow.
On the other end of the spectrum, Mayor Bill de Blasio praised the improvements made to the Build It Back program, which he says has streamlined relief for homeowners and small businesses.
As of December 31 pf last year, no reimbursement checks had been sent out and there had been no construction starts. When de Blasio entered office, he promised 500 construction starts and 500 reimbursement checks by Labor Day. Last week, he reported that 132 homes had begun construction, 30 of which had been completed, and 397 reimbursement checks had been sent out totaling $6.37 million. Another 55 construction starts have already been scheduled.
“Relief can’t come fast enough for homeowners and small business owners who have already waited too long, which is why we’ve made getting our Sandy recovery programs on track a top priority,” de Blasio said. “Now, as a result of the overhaul we implemented earlier this year, hammers are hitting nails and reimbursement checks are being cashed. This is just a start, and we are committed to getting every New Yorker the help they need to rebuild.”
The mayor also reported additional changes to the Build It Back program since his last report in April, including expanding eligibility and eliminating income-based priority levels, increasing Build It Back staff and adding 44 staff members to the Department of Buildings who are specifically dedicated to the Build It Back program.
He also announced legislation providing tax relief for rebuilding homeowners, improving communications through a new web portal and engaging local communities by hiring local workers who have been impacted by the storm.
His administration also made changes to the Hurricane Sandy Business Loan and Grant Program (HSBLGP) based on feedback from small businesses. Now more businesses will be eligible for grants and approval guidelines will be more flexible, through changes like removing caps on loans and grants and making grants of up to $100,000 based on unmet need available to businesses without requiring a loan.
Local politicians and community members appreciated the changes while noting that there is still a lot of work to be done.
“This administration made a commitment that they would really 'build it back,' and they have started to make good on that promise,” Councilman Donovan Richards. “While we still have a long way to go, today’s announcement is a major step in the right direction.”
Father Fulgencio Gutierrez, the pastor of St. Mary/St. Gertrude Church in Far Rockaway, reiterated Richards’ statement and mentioned the particular importance of using a local workforce for Sandy repairs.
“While there is still a long way to go, Mayor de Blasio’s focus on helping those who are struggling the most will make our city more resilient in the long-term,” Father Gutierrez said.
“We’re especially encouraged by [Director of the Housing Recovery Office] Amy Peterson’s initial progress toward supporting a high-quality, local workforce to rebuild their city,” he added. “Too many Sandy survivors were struggling to find decent work even before the storm, and could have their lives transformed by these efforts to rebuild homes and create good, local jobs in the process.”