“Today I’m issuing an audit revealing that the New York City Housing Authority failed to ensure its contractors complied with hiring requirements for low-income New Yorkers,” Stringer said outside Ingersoll Houses in Fort Greene last week. “As a result of this mismanagement, NYCHA residents and other New Yorkers lost out on hundreds of thousands of dollars of potential wages.”
The preliminary audit found that contractors did not consistently meet requirements of Section 3 of the U.S. Housing and Urban Development Act of 1968, which was designated to provide public housing residents with job opportunities, nor did the contracts meet NYCHA’s own Resident Employment Program hiring requirements.
To blame, the report says, are inadequate monitoring of hiring requirements, as well as a failure to institute adequate controls over the hiring process to meet these requirements.
Of the roughly 200 NYCHA work contracts from 2012, the comptroller’s office reviewed 29, 21 of which were closed. Eight of the 21 closed contracts failed to meet applicable Section 3 and/or REP requirements.
Among the monitoring issues found by the comptroller’s office, 19 contracts contained inaccurate Section 3 hiring summaries and 17 contained inaccurate REP hiring summaries.
The 17 contracts with inaccurate summaries totaled almost $9.5 million, while auditors found that actual hiring costs were closer to $8.4 million. In the same group of contracts, NYCHA reports calculated resident labor costs at around $1.4 million, while auditors found actual resident labor costs to total less than $1 million.
Councilman Mark Treyger was among those to join the comptroller at the audit announcement, along with his colleagues Laurie Cumbo and Richie Torrez, chair of the Public Housing Committee, and Assemblyman Walter Mosley.
“This is an outrage. They have the audacity in this report to question the accuracy of this office’s calculations while they confirm they do not check the accuracy of their own calculations,” Treyger said. “We are not here today simply making recommendations, we are here today saying you have to follow the law.”
In a June 26th letter to the comptroller’s office, NYCHA Chair Shola Olatoye wrote, “NYCHA established in 2010 the Office of Resident Economic Empowerment and Sustainability (REES), in order to implement programs, policies and collaborations aimed at supporting residents to increase their income and assets.”
Olatoye said that REES facilitated placement of 1,034 residents into job positions between October 1, 2012, and September 30, 2013. She also cites the NYCHA Resident Training Academy, which trains residents for positions in construction and other Section 3 related job opportunities.
Since its launch in 2010, it has seen more than 900 graduates, with 804 going on to find jobs with NYCHA contractors.
Olatoye expressed frustration with the audit in her letter, writing, “the comptroller’s office never provided NYCHA with a clear and concise audit scope, which gave them free reign to expend the scope at will.”
Asked if anyone would be held responsible for the illegal hiring practices his office found within NYCHA, Stringer said, “We’re going to work with the chair of NYCHA, who’s doing a lot of good work. We’re going to have meetings. Part of what we’re doing in the comptroller’s office, and part of our job is to keep agencies accountable. We’re going to continue to press that.”
The comptroller expects that the full audit will be completed be year's end.