Mayor Michael R. Bloomberg, Comptroller William C. Thompson, Jr. and Department of Homeless Services Commissioner (DHS) Linda Gibbs today announced a joint initiative to review existing temporary emergency housing procurement rules and establish a more responsive procurement process for those agencies providing shelter services. The initiative comes in response to the Comptroller's audit of controls over payments to non-contracted facilities within the DHS.

The City is required by local law and court order to provide shelter on demand to any eligible homeless family and individual on the day they request it. Over the past decade, use of non-contracted facilities by DHS has expanded as the number of individuals and families requesting shelter has increased. Mayor Bloomberg and Comptroller Thompson stated today that the goal of the reform initiative is identifying means for DHS to bring a larger portion of existing facilities into a formal contracting process and a greater number of new facilities online with contracts.

"We're here today to deal with two important subjects: meeting our mandate to provide shelter on demand and doing it in a way that increases accountability," said Mayor Bloomberg. "Good government means transparent management and accountability, and bringing more facilities into a formal contracting process will be better from every perspective. I want to thank the Comptroller for his willingness to engage my administration in a discussion that is results-oriented and reform-minded."

"While we could have released an audit that simply called for reforms, we instead wanted to work with the administration to create meaningful and workable reforms," said Comptroller Thompson. "We are committed to finding a procurement process that allows DHS to meet its unique mandate, while also building confidence among taxpayers that the millions of dollars spent on shelter are being spent with appropriate oversight. I am pleased that the administration has responded to the issues raised by my audit, and look forward to working together to improve conditions for those who live in these facilities."

"Ending the scatter site program and decreasing the number of facilities without contracts are both critical to increasing accountability and bringing greater order to a system often defined by crisis," Commissioner Gibbs said. "We will continue reducing the scatter site program until it is gone, while moving the system away from per diem payments toward contracts."

The announcement was made today as the Office of the Comptroller released an audit of DHS from July 1, 2001 to June 30, 2002 examining controls over payments to hotel and scatter site units, which operate without contracts. The audit found that DHS controls over payments to operators of non-contracted facilities were properly accounted for, but that an increasing number of facilities were being brought online outside the City's official procurement process. In addition, the audit found the conditions of hotels to be satisfactory, but identified substandard conditions in some of the audited scatter-site apartments.

As a result of the audit, DHS has increased the frequency of scatter-site inspections and expanded the number of criteria included in those inspections. Over 140 scatter site units - including each of the units identified as substandard in today's audit - have been brought offline since May 2003, when the City announced plans to end the program.