Audit Report On Human Resources Administration Controls Over Payments To Vendors Who Provide Emergency Housing To Clients Of The HIV/AIDS Services Administration

Audit Report In Brief

This audit determined whether the Human Resource Administration (HRA): complied with the City Charter and Procurement Policy Board (PPB) rules when entering into agreements with vendors for emergency housing services; complied with Comptroller’s Directives and other applicable regulations when making payments to vendors; had adequate procedures in place to ensure that vendors are paid only for housing services provided to eligible individuals; and ensured that the facilities were maintained in a safe and sanitary condition.

Audit Findings and Conclusions

HRA did not comply with the City Charter and Procurement Policy Board (PPB) rules when HRA procured emergency housing services from vendors without first entering into formal contracts. In addition, HRA did not comply with Comptroller’s Directives and other applicable regulations in making its payments to vendors. Further, HRA did not have adequate procedures in place to ensure that vendors were paid only for housing services provided to eligible individuals. Consequently, HRA made approximately $2.2 million in questionable payments to vendors. Finally, while most facilities we visited were maintained in a safe and sanitary condition, certain units were found to be in disrepair.

Audit Recommendations

To address these issues, we recommend that HRA:

•  Procure emergency housing services in accordance with the provisions of the City Charter and PPB rules by:

•  entering into formal contracts with the operators,

•  ensuring that contracts contain measurable performance standards and penalties for poor performance, and

•  registering the contracts with the Comptroller’s Office.

•  Review and reconcile invoices, registration logs, and FACTORS data before paying vendors. The registration logs should be maintained in the payment files to substantiate amounts paid to vendors.

•  Periodically obtain SSA death records and match them with the list of HASA clients to determine whether improper payments are being made.

•  Recoup the $2,192,597 in improper payments from emergency housing vendors.

•  Ensure that payments made to emergency housing vendors are for only eligible clients who have 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.

•  Ensure that vendors are providing clean and safe emergency housing for its HASA clients.