Bureau of Audit
Audit Follow-Up Audit Report On The New York City Housing Authority Resident Employment Program
June 23, 2008
AUDIT REPORT IN BRIEF
Download the Complete Audit Report (pdf 671 kb)
This audit determined whether the New York City Housing Authority (NYCHA) implemented the six recommendations made in the Audit Report on the Administration of the Resident Employment Program by the New York City Housing Authority (MJ03-143A) issued on June 30, 2004. NYCHA endeavors to provide decent and affordable housing for low- and moderate-income residents throughout the five boroughs. NYCHA currently manages and maintains 343 public housing developments with 178,466 apartments (as of October 2, 2007) and approximately 400,000 residents. In addition to housing, it offers its residents opportunities to participate in a multitude of community, educational and recreational programs, as well as job readiness and training initiatives.
NYCHA’s Department of Resident Employment Services (RES) implements the agency’s resident employment training programs, including the Pre-Apprenticeship Program, the Resident Opportunity and Self-Sufficiency Program, and the Resident Employment Program (REP). NYCHA established REP in January 2001. REP requires that every construction and building maintenance contract in excess of $500,000 expend 15 percent of the total estimated labor cost on hiring and/or training NYCHA residents. NYCHA has two administering departments that oversee construction and building maintenance work—Capital Projects and Operations.
The previous audit concluded that NYCHA did not have effective controls to ensure that REP was operating as intended. The agency did not have standard operating procedures for the program and did not coordinate the efforts of all parties involved in the monitoring of contractor compliance with REP. As a result, those persons charged with monitoring contractor compliance did not have a clear understanding of their responsibilities, and no one was held accountable for ensuring that contractors provided accurate information regarding resident hiring. Contractors generally did not comply with REP requirements and, in a number of instances, overstated the amount of money that went to NYCHA residents. The lack of adequate contract monitoring allowed contractors who did not fulfill their REP obligations to escape the consequences of noncompliance.
Audit Findings and Conclusions
Of the six recommendations made by the previous audit, NYCHA implemented one, partially implemented one, and did not implement four. Although NYCHA strengthened some of its controls over REP contracts, it did not implement several recommended changes that could have helped it achieve its REP goals. The agency established written procedures to manage REP contracts and monitor compliance with REP requirements. It also implemented a system to better track contracts and monitor contractor compliance with REP requirements.
However, our audit concluded that there was a significant lack of management oversight of the monitoring of REP contracts. There was little evidence of REP program coordination between RES and the administering departments. Overall, the REP program did not appear to be a high priority for the administering departments.
To address the issues that still exist, we recommend, among other things, that NYCHA:
- Ensure that administering departments consistently provide hiring summaries and related documents to RES.
- Ensure that payments are made to contractors only if all required supporting documents, including hiring summaries, certified payrolls, and sign-in sheets, are submitted.
- Ensure that all hiring summaries are properly approved by the administering departments before contractors’ requests for payment are processed.
- Impose sanctions on contractors who consistently fail to meet REP requirements.
- Revise its procedures so that compliance determinations are based in part on the milestones identified in contractors’ hiring plans.
- Modify the REP hiring summary so that the contractor not only reports the total labor cost, the labor cost spent on NYCHA residents, and the percentage spent on residents, but also reports on compliance with the milestones identified in the hiring plan.
In its response, NYCHA agreed or partially agreed with nine recommendations and failed to address five.