Audit of Tillary Street Women’s Shelter contractor finds misreported costs
Food waste and overallocation, misreporting of various costs causes OSC to suggest DHS recover/account lost funds
An Office of the New York State Comptroller (OSC) audit of a city contractor providing care at the Tillary Street Women’s Shelter in Downtown Brooklyn found that the entity failed to accurately report millions of public funds, including meals expenses.
The Institute for Community Living Inc. (ICL) – a nonprofit which receives government money in exchange for providing temporary housing, housing referrals, case management, placement services and on-site mental and physical health services to women with mental illnesses and substance abuse disorders at Tillary – had $2,376,462 in reported expenses not in compliance with the Tillary contract or the DHS and city government oversight requirements, accumulating to 9.7 percent of total costs for the three fiscal years before June 30, 2019. In 2019, ICL held four contracts with the DHS valued at $93.8 million.
ICL contracted out security and prepared meals expenses ($3,162,646 and $1,169,564, respectively) at Tillary. In the three fiscal years leading up to 2019, over $92,492 worth of meals were not accounted for. Specifically, over 267,000 meals were served by ICL but logs only accounted for 231,920 purchased meals. 35,920 meals are unaccounted for. The OSC requested logs of daily food use, and only received 21 of the 36 months requested from October 2017 to June 2019. During that time, it is estimated that 33 percent of meals purchased by ICL were wasted. ICL did not adjust the quantity of meals to better suit its needs, despite their contract permitting them to do so.
On April 6, 2022, during an unannounced visit to the shelter, the OSC observed garbage bags full of unopened meal despite a “use by” date of April 9.
ICL’s website states that in 2020, “96% of our behavioral health clients believed they had the power to make changes to improve their physical and mental health. The vast majority said they were able to deal more effectively with daily problems and were more in control of their lives.”
For its services at Tillary, ICL had signed an original $15.2 million contract with the Dept. of Homeless Services and renewed an amended version of that contract at $35.6 million. From the fiscal year of 2015-16 to fiscal 2019-20 the aggregate cost of the contract was approximately $50.8 million.
ICL claimed $24.5 million in reimbursable expenses during that period. To qualify for reimbursement, ICL must submit documentation: receipts, invoices and proof of payment. The documentation submitted was not compliant with the Fiscal Manual or Cost Manual of the DHS or NYC Department of Health and Human Services which “provide guidance to homeless service providers on the eligibility of reimbursable costs, the documentation necessary to support these costs, and cost allocation requirements for expenses related to multiple contacts” according to the state Comptroller audit. The Tillary contract states the contractor must create written estimates for goods, supplies or services for amounts over $25,000 over the course of a one-year period.
$852,361 in compensation expenses – $696,572 in salaries and $155,789 in related fringe benefits – to ICL’s payroll are “not adequately supported” and cannot be reimbursed due to the absence of adequate time and attendance records. ICL stated that the agency lost attendance records in a 2019 cyberattack, which the DHS confirmed. The employees in question worked 29,477 hours. $157,337 and $32,758 in fringe benefits and compensation expenses relating to personal services were also determined to be not adequate for reimbursement. Excessive allocation of funds is in violation of ICL’s contract with Tillary, and other improperly documented expenses, such as $47,962 in electricity, $21,091 in ‘bundled communications’, heating oil, repairs, motor vehicle expenses and $1,350 in “Other.” ICL also reported $7,254 in the period before fiscal year 2019. Year-end closeouts for the 2018-19 fiscal year from ICL are still overdue.
The DHS spends a total of $2.2 billion annually to provide transitional housing and housing services for homeless families, according to the OSC.
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