DOI AND NYC COMPTROLLER ANNOUNCE FINDINGS AND RECOMMENDATIONS REGARDING NYC BOARD OF ELECTIONS’ PROCUREMENT AND OVERSIGHT OF FOR-HIRE VEHICLE SERVICES

Jocelyn E. Strauber, Commissioner of the New York City Department of Investigation (DOI), and New York City Comptroller Brad Lander announce the findings of their offices’ separate inquiries into the New York City Board of Elections’ (BOE) spending on for-hire vehicle (FHV) services. BOE uses FHV services to transport personnel, equipment and supplies between BOE sites on election day and early voting days and to transport BOE employees home at certain times. BOE pays for FHV rides with City funds through contracts with several companies. BOE’s spending on FHV contracts increased over 210% since 2014, from $1.6 million in 2014, to $5 million in 2023. The BOE indicated that this increase is due to reasons including the addition of early voting in 2019 and the increased number of special elections required by state law. DOI and the City Comptroller’s Office identified weaknesses in BOE’s procurement, contracting, and oversight processes that led to an increased risk of unnecessary spending and more than $86,000 in charges that were not permitted contractually, but were nevertheless paid by BOE. The Report issued three recommendations to BOE to improve these processes.

DOI Commissioner Jocelyn E. Strauber said, “The flaws in the City Board of Elections’ procurement, contracting, and oversight practices related to for-hire vehicle service contracts identified in this joint Report pose a risk of waste of public funds through potential unchecked overbilling as well as excess spending. The recommendations we issue today call for changes intended to strengthen BOE’s procurement policies and oversight of expenditures by these contractors. I thank Comptroller Lander for his partnership in this effort to protect public funds.”

New York City Comptroller Brad Lander said, “The Board of Elections has not judiciously overseen its spending on for-hire vehicle services, as evidenced in the more than $86,000 in charges that were not permitted contractually and still paid by BOE. My office and DOI successfully identified the BOE’s overspending on for-hire vehicles and offered common-sense recommendations to enhance procurement practices and improve oversight. I thank Commissioner Strauber and my office’s auditors for diligently digging through BOE’s records to uncover this clear-cut case of mismanagement.”

BOE is responsible for all local, state and federal elections in the City. In Fiscal Year 2023, BOE managed an annual budget of approximately $258 million, and was comprised of 10 board members and 860 full-time and full-time equivalent employees. During the administration of elections, BOE also hires thousands of temporary workers to operate over 1,200 election day poll sites across the City. For the nine days of early voting before the November 2023 general election, BOE also operated 140 early voting poll sites. Because poll sites are open to voters from 6 a.m. to 9 p.m. in general and primary elections, poll workers may arrive at sites as early as 5 a.m. and leave well after 9 p.m., depending on the time necessary for polls to close and results to be reported.

BOE contracts with City Taxi and Limousine Commission-licensed FHV providers for election day, early voting and after-hours transportation, offering drivers and vehicles such as taxis, livery cars, limousines, and black cars.

DOI’s investigation focused on BOE’s dealings with seven FHV providers from 2017 through 2021. Charge and Ride, Inc.; Concord Limousine 1, LLC; Corporate Transportation Group; Elite Limousine Plus; Executive Charge, Inc.; First Class Car & Limo; and VIP Connection, Inc.

DOI referred the investigation to the City Comptroller’s Bureau of Audit. The Comptroller identified more than $86,000 in charges that were not permitted by the terms of the contract, but were nevertheless paid by BOE.

DOI’s investigation and the City Comptroller’s examination identified weaknesses in BOE’s contract oversight and procurement of FHV services, including:

• Inadequate BOE oversight of its FHV contracts, as evidenced by a for-hire vehicle provider that charged BOE more for its services than the terms of its contract with BOE allowed.
• BOE’s failure to require FHV vendors to account for key trip costs in their bids, including destination and “drop off” fees, resulting in artificially low contract bids and awards that did not reflect the true costs of the services for which BOE had contracted.

DOI’s and the City Comptroller’s combined reviews determined that BOE failed to account for anticipatable costs when purchasing FHV services, and then failed to adequately oversee those contracts to ensure the FHV providers submitted invoices consistent with the contract terms. DOI and the City Comptroller issued the following three recommendations. BOE’s responses follow each recommendation:

1. BOE should review all of its FHV contracts to identify potential overbilling and other disallowed costs. To the extent that it identifies any such costs, BOE should take all necessary steps to recoup or offset their value from the appropriate vendors.

• BOE “agrees to the extent possible.”

2: BOE should review and amend all existing FHV contracts to account for likely, anticipatable, or otherwise expected costs, including at minimum: (a) City destination-based rates, including a maximum rate for any City destination not specified in the Invitation for Bids; and (b) drop-off fees.

• BOE “agrees, except to the extent that some of these contracts have expired.” However, DOI and the Comptroller reiterate that their recommendation relates only to “existing FHV contracts.”

3: For all future procurements of goods and services, BOE should require bidders to account for likely, anticipatable, or otherwise expected costs as part of their overall bid price, and explicitly inform bidders that costs not in agreement with their bids will be disallowed and subject to reimbursement or offset.

• BOE “agrees to the extent possible.”

At the City Comptroller’s Office, the review was conducted by Audit Manager Amy Man, Supervisor Charlotte Wong, Lead Auditor Paul Chan, and Staff Auditor Richard Avellino, and was supervised by Deputy Comptroller for Audits Maura Hayes-Chaffe.

At DOI, the investigation was conducted by Investigative Attorney Edward Pruette, Deputy Inspector General Trenton Sweeney, and Deputy Inspector General/Special Counsel Daniel Kacinski, and was supervised by Senior Inspector General Andrew Sein, Deputy Commissioner of Strategic Initiatives Christopher Ryan and Deputy Commissioner/Chief of Investigations Dominick Zarrella.

Read the report here.

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