New York City Comptroller Lander Announces Audits of City Agencies

New York, NY — New York City Comptroller Brad Lander announced the release of several audits conducted by the New York City Comptroller’s Bureau of Audit.

The Comptroller’s office is responsible for conducting audits and analyses of City agencies to determine whether funds are expended or utilized efficiently and economically, and whether the desired goals, results, benefits, or agency programs are achieved. The recommendations included in these audits are designed to further the Comptroller’s mission to promote efficiency, integrity, and performance in City government for all New Yorkers. The Comptroller’s office monitors implementation of audit recommendations and conducts follow up audits to assess improvement. The Comptroller’s Audit Recommendations Tracker is available here.

Today, the Comptroller announced the completion of the following audits and follow up audits:

MANAGEMENT AUDITS  
Audit of the Human Resources Administration/Department of Social Services’ Career Pathways Program (Issued June 30, 2023)

This audit conducted on the New York City Human Resources Administration (HRA) focused on the oversight and effectiveness of the Career Pathways program, as well as the impact of the COVID-19 pandemic on the program. The audit examined several key questions, including whether HRA effectively oversees the Career Pathways program and how the pandemic affected its implementation.

The audit revealed that HRA did not effectively manage Career Pathways. During the pandemic, program costs increased significantly while the number of participants decreased. Per person expenditures rose from $870 to $7,544 between 2020 and 2022. Furthermore, HRA made participation voluntary in March 2020 but did not invite new clients to enroll until over 15 months later, in June 2021. The agency paid its contractors a total of $146.3 million during this period.

HRA also failed to meet a key performance goal of 80% of clients still being employed or refraining from returning to cash assistance at the 180-day mark. Additionally, HRA did not set a one-year employment retention target based on clients who remained employed after one year.

Following the audit, HRA committed to making changes. They agreed to set a one-year employment retention target for cash assistance clients placed in jobs and to review client surveys to enhance client satisfaction.

The findings of the audit are significant for New Yorkers because HRA is the largest municipal social services agency in the country, serving over 3 million residents. Career Pathways is a crucial program that provides access to benefits and cash assistance while offering professional development opportunities.

Audit Report on the New York City Department of Transportation’s Controls over Street Marking Refurbishments (Issued June 30, 2023)

This audit of the New York City Department of Transportation (DOT) focused on the management of pavement markings and aimed to determine whether streets identified for pavement marking refurbishment received timely and equitable attention.

The audit found that while DOT’s protocols for identifying and prioritizing refurbishment locations were generally adequate and equitable, inspections were conducted for only 68% of the locations listed on the 2021 Prioritization List. Approximately 32% of the locations remained uninspected. Additionally, a significant portion of the needed refurbishment identified during inspections was not completed on time, with 10% of the work orders remaining unfinished by February 2023.

While DOT was able to complete 90% of the refurbishment work orders, 35% of the completed work orders were not finished by their assigned due dates, and over half (58%) remained open for more than 30 days past their estimated completion dates. The audit also identified discrepancies and data issues within DOT’s records.

DOT provided explanations for the uncompleted inspections and delayed work, and the audit highlighted possible causes of the delays. However, improvements are needed to ensure more timely and efficient completion of pavement marking refurbishment.

Audit Report on the Department of Citywide Administrative Services’ Compliance with Local Law 45 (Issued April 24, 2023)

This audit examined how accurately the New York City Department of Citywide Administrative Services (DCAS) reported its energy usage. The analysis revealed significant issues with the accuracy and reliability of this data.

While DCAS generally complied with reporting requirements, the audit identified multiple data errors, weaknesses in data collection and integrity, and inadequate tracking of efficiency improvement projects. As a result, all four annual reports published by DCAS were deemed unreliable, with one case of underreported fossil fuel usage in City buildings by as much as 29%. The audit emphasized the importance of accurate data for assessing the City’s energy usage and carbon footprint.

DCAS has acknowledged the mistakes and must overhaul its reporting practices to regain trust and support the City’s ambitious efficiency goals.

Audit Report on the Purchasing and IT Inventory Practices of the New York City Office of the Actuary (Issued December 28, 2022)

The objectives of this audit were to determine whether NYCOA maintained adequate financial controls over its OTPS purchasing practices as required by NYC Comptroller’s Directives, NYCOA’s policies and procedures, PPB Rules and other applicable policies and procedures, and whether it maintained adequate controls over its IT inventory.

The audit revealed weaknesses in NYCOA’s purchasing controls, primarily due to the absence of formal written policies and procedures that establish consistent practices. Notably, NYCOA could not provide documentation demonstrating prior approvals for P-Card purchases amounting to $1,631 and purchase orders totaling $15,437. Furthermore, NYCOA did not maintain comprehensive IT inventory records, contrary to the requirements outlined in the Citywide Inventory Management Policy.

Audit of the New York City Department of Citywide Administrative Services’ Compliance with Local Law 2 of 2016 Regarding the Nonpublic School Security Reimbursement Program (Issued December 21, 2022)

The objective of this audit was to assess the New York City Department of Citywide Administrative Services (DCAS) in terms of compliance with Local Law 2 of 2016, specifically focusing on the establishment and administration of the Nonpublic School Security Reimbursement Program (NPS).

The audit determined that, overall, DCAS demonstrated general compliance with Local Law 2 of 2016 and the NPS Rules, effectively administering the NPS Program. However, certain areas require attention and improvement. Specifically, the audit identified the following issues:

• Insufficient timesheet management by DCAS over one security vendor
• Inconsistent adherence to DCAS’s own rules pertaining to the Qualified Provider List (QPL)
• Occasional miscalculations of allowable reimbursable costs

Addressing these concerns will enhance the effectiveness of DCAS’s operations and ensure better compliance with the requirements outlined in Local Law 2 of 2016 for the NPS Program.

FINANCIAL AUDITS 
Analysis of the Financial and Operating Practices of Business Improvement Districts, Fiscal Year 2020 (Issued May 5, 2023)
The objective of this analysis is to provide comparative data on the overall financial activities of the 76 business improvement districts (BIDs) that received City-collected assessments during FY 2020.

The audit findings highlight areas of concern that may affect the financial stability of the BIDs and potentially limit the range of services they can offer to the districts they serve. Key concerns are as follows:

• BIDs with recurring deficits (expenses exceeded revenues);
• BIDs with low program service expenses when compared to their respective category averages;
• BIDs with high administrative expenses in comparison to their respective category averages; and
• BIDs that paid higher salaries and compensation to key employees compared to other BIDs.

Audit Report on the Department of Finance’s Inclusion of Cell Tower Revenue in the Assessment of Real Property Taxes (Issued April 11, 2023)

The objective of this audit was to determine whether the NYC Department of Finance (DOF) ensured that property owners reported cell site income on their Real Property Income and Expense (RPIE) Statements.

The audit found that DOF did not use available data to ensure that all property owners reported cell site income on their 2017 and 2018 RPIE Statements. DOF did not identify unreported cell site income or adjust gross income totaling $23.2 million, resulting in potential tax losses totaling $9.1 million.

The audit put forth several recommendations to enhance the process of cell site add backs by the Department of Finance (DOF) and ensure accurate reporting of income. These recommendations include:

• Earmarking properties that are not valued during DOF’s cell site add back procedures and reviewing them during the change period
• Making retroactive adjustments to reported income for properties where property owners have failed to report cell site income and recouping the appropriate amounts, to the extent possible
• Utilizing available tools, such as the Department of Buildings Cellular Antenna Filings Report on an annual basis, as well as employing pictometry and conducting field observations to identify and verify the existence of cell sites
• Confirming with telecommunication companies whether the identified cell sites are actively in use

Audit Report on the Financial and Operating Practices of the Snug Harbor Cultural Center and Botanical Garden (Issued December 6, 2022)

The purpose of this audit was to assess the Center’s compliance with the Department of Cultural Affairs (DCLA) requirements, Comptroller’s Directives, and its internal procedures in utilizing City funds, while also evaluating the effectiveness of its internal controls over financial and operational processes. The audit determined that the Center demonstrated appropriate expenditure of City funds within the audit scope period. However, it identified certain weaknesses in its operating processes that could potentially elevate the risk of fraud or misappropriation of City funds.

To address these concerns, the audit recommended the Center:

• Maintain Annual Potential Conflicts Disclosures for all Board members and the Board resolve known conflicts of interest
• Maintain complete and accurate inventory records
• Implement all required safety measures
• Ensure that all required reports are complete, accurate, and issued in accordance with DCLA Procedures

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