Cypress Hills

Hotel shelter operator stiffed homeless families on toilet paper and microwaves

March 9, 2020 Yoav Gonen, THE CITY
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THE CITYAn embattled nonprofit operating more than two dozen hotels sheltering homeless New Yorkers is a financial and managerial mess that routinely left families short on microwaves for heating meals and even toilet paper, a new court filing shows.

Daniel Tietz, the court-appointed receiver overseeing the Childrens Community Services, described a laundry list of failings at the six-year-old nonprofit, which has $669 million in contracts with the city.

Among the problems: an annual staff turnover rate of 55%, according to the receiver’s first filing in Manhattan Supreme Court.

While most of his findings centered on the firm itself, Tietz noted that homeless families sheltered in the commercial hotels and entitled to social services from the nonprofit were also impacted.

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“Timely and consistent access to goods and supplies (e.g., printing paper, toilet paper, notebooks, pens, supplies for families, and microwaves) was a routine complaint,” Tietz wrote in the filing submitted Thursday.

Families in hotels are dependent on communal microwaves for most of their meals because the food they’re served is often frozen. The hotel rooms typically lack kitchens and offer only small refrigerators for storing perishable goods.

Poor Supervision

Among the findings in Tietz’s 12-page report:

• Program directors got little to no supervision from higher-ups, leading them to rarely supervise their underlings.

• Staffers across sites were infrequently held accountable, to the point that some complaints to human resources about poor performance or misconduct went unanswered.

• Employees complained about IT equipment, including refurbished laptops and intermittent internet access needed to complete required reports.

• Staff training and performance reviews were sporadic. A number of program directors had not been formally evaluated in more than two years.

The nonprofit is operating at a deficit of $3.2 million, in part because of withholdings by the Department of Homeless Services connected to a civil lawsuit filed by the city in January.

Tietz also wrote that he’s reorganizing the group, bringing aboard two top-level administrators, and hiring three consultants to review human resources, program services and finances.

This includes outsourcing nearly the entire finance department to an external consultant, the filings said.

Despite Tietz’s host of concerns, he wrote that his initial review of services provided to the homeless families appeared to be “satisfactorily delivered.”

“Nonetheless, a more thorough program assessment is necessary,” he wrote.

Early Warning Signs

The rapid rise of Childrens Community Services from an unknown in the social services field to an entity with nearly $800 million in city contracts raised eyebrows among elected officials and industry observers.

As THE CITY has reported, the Department of Homeless Services had already red-flagged Childrens Community Services and entered into a corrective action plan for the nonprofit focused on its management and finances when it signed on in 2017 to provide hotel rooms and services to some 1,500 families and single adults.

Those three-year contracts started at $359 million and $48 million, expanding since then to a total of $647 million for rooms at more than two dozen commercial hotels.

HRA Commissioner Steve Banks and Mayor Bill de Blasio Photo: Ben Fractenberg/THE CITY

In January, the Department of Homeless Services filed a lawsuit against Childrens Community Services seeking a receiver, which Judge Lyle Frank appointed early last month. The city’s legal complaint cited suspect billing from subcontractors government attorneys allege are affiliated with the nonprofit.

Around the same time, Childrens Community Services CEO and founder Thomas Bransky and Chief Operating Officer Ruth Mandelbaum were fired, according to the Department of Homeless Services.

Since then, a review by THE CITY has newly identified discrepancies in paperwork submitted by Bransky in his applications to secure city contracts.

Among them, Bransky’s resume says he earned a Bachelors of Science in finance and communication in 1999 from Bradley University in Peoria, Ill.

But school officials have no record of a finance degree. They say Bransky’s Bachelors of Science was in communication, with a concentration in public relations.

Another document submitted to the city says Childrens Community Services began its work in New York City through a collaboration with Rep. Gregory Meeks (D-Queens) and Apex Asset Management to provide temporary shelter to 300 families displaced by Superstorm Sandy in late 2012.

Officials in Meeks’ office said they had no recollection of such a collaboration — and particularly not one of such magnitude.

A request for comment from Bransky’s attorney wasn’t answered.

Next Steps

In Thursday’s court filing, Tietz says he has until March 17 to respond to the city’s complaint against Childrens Services Society alleging fraudulent billing and potential bid rigging — although the deadline was subsequently extended to April 16.

He also noted he’s cooperating with a Jan. 27 subpoena for documents and records from the U.S. Attorney’s Office in Manhattan.

Tietz said roughly three dozen open positions at the organization are now being filled, out of a total of about 500, while he eliminated nine positions and terminated one employee for cause.

He said his goal is to transfer all or most of the commercial hotel sites operated by Childrens Services Society to other nonprofit providers by July 1.

Have you ever stayed at a hotel operated by Childrens Community Services? Or have you ever worked for the nonprofit? We want to hear about your experience. Email reporter Yoav Gonen at [email protected] or text, Signal, WhatsApp 646-229-8322.

DHS put out a public notice this week that it intends to negotiate with Urban Resource Institute, Praxis Housing Initiatives, the Children’s Rescue Fund and Samaritan Daytop Village to potentially take over.

Department of Homeless Services officials didn’t immediately respond to a request for comment.

This story was originally published by THE CITY, an independent, nonprofit news organization dedicated to hard-hitting reporting that serves the people of New York.

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