Audit finds lax oversight of post-Sandy shelter contracts

By Sarina Trangle

A recent audit found the city struggled to monitor nearly $20 million in emergency contracts to house and support families after Hurricane Sandy, with lapses severe enough to threaten reimbursement from the federal government.

Thousands of people in the Rockaways lost their homes after the superstorm and some 20,000 residents are still waiting for their houses to be rebuilt on the peninsula, City Comptroller Scott Stringer said in April. Broad Channel and Hamilton Beach were also hard hit.

Stringer’s office released last week an audit of eight contracts the city Department of Homeless Services inked after Hurricane Sandy swept through Queens Oct. 29, 2012.

Because of the unprecedented stress placed on the agency, DHS had eight senior employees who did not ordinarily monitor individual contracts assume oversight of 20 emergency shelter and social service contracts collectively worth $19.9 million, the audit said.

The document noted the city housed about 6,800 people immediately after Sandy, turning to nonprofits like Ridgewood Bushwick Senior Citizens Center and Samaritan Village, a Briarwood-based social service organization that has encountered backlash over an emergency shelter it operates in Elmhurst and plans to open a second facility in Glendale.

But neither groups’ contracts were among the eight audited.

Stringer’s staff found DHS lacked formal written guidelines explaining how staff should monitor emergency contracts. The audit also determined the agency failed to compile documents showing such surveillance occurred, which the Federal Emergency Management Agency requires before reimbursing local governments.

“Appropriate documentation, properly managed and maintained, would increase accountability as well as help mitigate and manage such risk,” the audit concluded. “The absence of such evidence could potentially jeopardize DHS’s ability to claim reimbursement for the provision of emergency services.”

When asked how DHS oversaw emergency contracts, the agency turned over a 69-page handbook written for providers that included two paragraphs on emergency contracts, FEMA guidelines and a payment checklist for ordinary contracts.

DHS committed to expand its contingency planning documents in a response to the audit.

“DHS agrees … and going forward will develop and implement clearly defined policies and operating procedures to address the oversight and monitoring of emergency contracts,” the agency wrote.

Stringer’s probe said many managers described in interviews site visits, discussions with vendors and other oversight work, but diary logs, observation notes and other related documents were scarce.

The agency had a daily census for one contract on record, when five contracts required this. Similarly, mandatory weekly reports were not available for several contracts.

DHS said managers monitored contracts and kept documents in accordance with FEMA requirements, but agreed to establish standard documentation protocols.

In some cases, the audit found managers signed invoices without adequately verifying that the goods and services charged for were provided and that DHS had not yet paid for them.

As a result, the city paid $28,000 to Women in Need after its contract had elapsed and the agency’s own audit forced it to disallow $400 given to the Ridgewood Bushwick Senior Citizen Center for erroneous holiday pay, according to the comptroller’s audit.

In response, DHS said managers are not charged with assessing the validity of invoices, but instead rely on certificates from the contracted organizations for evidence of the scope of goods and services provided.

Auditors disputed the idea that the city can trust self-reported information.

“They are not an independent verification,” the audit said. “These certificates are merely representations made by the providers themselves.”

Reach reporter Sarina Trangle at 718-260-4546 or by e-mail at [email protected].

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