Audit also finds housing units in unsafe and unsanitary conditions

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New York City Comptroller William C. Thompson, Jr. today issued an audit today finding that the Human Resources Administration (HRA) circumvented city rules when providing emergency housing to individuals with HIV and AIDS - and even cut checks to vendors to house individuals after their death.

The audit focused on HRA's controls over payments to vendors who provide emergency housing to clients of its HIV/AIDS Services Administration (HASA) in Fiscal Year 2003.

“We found that HRA paid for individuals who did not sign registration logs, who had already left the facilities, or who had died,” Thompson said. “Since our review only covered HASA clients who died in Fiscal Year 2003, the strong possibility exists that emergency housing vendors continue to bill HRA for similar individuals who died or left the facilities for other reasons in subsequent years.”

HASA is charged with providing temporary emergency shelter to medically-eligible homeless individuals living with HIV or AIDS. To be eligible for emergency shelter, applicants must be homeless and must document that they have been diagnose with clinical symptomatic HIV illness or with AIDS. Once an individual is approved for emergency housing, the individual is referred to a Single Room Occupancy (SRO) facility.

During FY 2003, HRA paid approximately $34 million to the 36 vendors who operate 68 facilities that provide emergency housing to HASA clients - $22.8 million paid using miscellaneous vouchers and $11.8 million paid using purchase orders. In total, Thompson said, HRA made questionable and improper payments totaling more than $2.1 million during this time. Among the questionable payments:

•  $1,000,266 to vendors whose clients did not sign registration logs. Thompson discovered this at all five vendors covered by his registration log review. HRA told the Comptroller the logs are shredded and discarded after a week.

•  $182,391 to vendors for 26 clients after their death. Twelve vendors submitted invoices to HRA and were improperly paid for between two days to more than two years after the individuals' dates of death.

•  $456,292 for 196 clients on or after their last date of occupancy at the facility. Thompson noted that 13 vendors had submitted invoices and were paid for housing these individuals one day and more than 190 days after leaving the facilities. Thompson faulted HRA's defense for the payments, noting that the agency was paying vendors for an extra night when individuals did not stay for that period. “Clearly, the eligible person did not occupy a room in the facility for an overnight period on their exit day,” Thompson said.

•  $417,463 for housing services for individuals not recorded on HRA's Family Tracking System (FACTORS), a computerized database that tracks the movement of HASA clients from initial placement in emergency shelter to any subsequent placements or movements to other facilities.

•  $118, 185 in duplicate billings. Thompson faulted HRA for defending the payments without supplying detailed information to document the payments.

“HRA has been aware of this issue since April 19, 2005 ,” Thompson said, pointing out when his office first notified the agency. “We provided HRA with all of the information needed to investigate these cases. We provided HRA with client names, social security numbers, voucher numbers, names of hotels, dates involved, and the payments cited.”

•  $18,000 to one vendor who billed HRA $2,030 - but was paid $20,030. HRA, in its response, said it would remedy its mistake.

Thompson's audit further faulted HRA's practice of securing housing by issuing miscellaneous vouchers, thus circumventing City rules by not awarding contracts. HRA did not have contracts with 36 vendors, and during FY 2003, paid vendors $22.8 million using miscellaneous vouchers and $11.8 million using purchase orders.

“The use of miscellaneous vouchers was inappropriate,” Thompson said. This practice “contributes to the distortion of the City's books of account by understating the City's outstanding obligations.”

He further notes that, contrary to HRA's defense, that the agency used purchase orders to pay some vendors. “If HRA could estimate the frequency and payment amounts for these vendors, it could have done the same for all vendors,” the Comptroller said.

The audit noted that, even if these arrangements could be considered emergency purchases, the agency failed to adhere to City procurement rules. The agency did not receive prior approval from the Comptroller and city Corporation Counsel and did not submit written determinations to justify the emergency and selection of the contractor.

Additionally, auditors inspected 91 units in five facilities and found more than a quarter with unsafe or unsanitary conditions. At 25 conditions, auditors noticed roaches, peeling paint, leaking faucets, water damage and mold on ceilings and walls, and broken tiles. Residents also pointed out that their apartments were infested by mice or roaches.

Thompson noted that in HRA's response to his findings that the agency did not specifically address the unsafe and unsanitary conditions in the 25 units cited in the report. “We are concerned that HRA did not in fact address these issues,” he said.

Comptroller Thompson issued a series of recommendations, primarily asking HRA to procure emergency housing services in accordance with the provisions of the City Charter and Procurement Policy Board rules. That would require the agency to enter into formal contracts with housing operators, ensure that the contracts contain measurable performance standards and penalties for poor performance, and register contracts with the Comptroller's Office.

He also recommended that HRA: review and reconcile invoices, registration logs, and FACTORS data before paying vendors; periodically obtain Social Security Administration death records and match them with the list of HASA clients; recoup $2.192,597 in improper payments to emergency housing vendors; make sure that payments to those vendors are for only eligible clients who've been assigned to the billing facility and who are actually occupying their units; discontinue its use of miscellaneous vouchers to pay vendors for emergency housing; and ensure that vendors are providing clean and safe emergency housing for its HASA clients.

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