Audit Report on the Compliance of the Human Resources Administration With Purchasing Directives

AUDIT REPORT IN BRIEF

This audit determined whether the Human Resources Administration (HRA) complied with certain purchasing procedures as set forth in the New York City Charter, applicable Procurement Policy Board (PPB) rules, and the New York City Comptroller’s Internal Control and Accountability Directive #24, “Agency Purchasing Procedures and Controls.”

Audit Findings and Conclusions

HRA generally did not adhere to Comptroller’s Directive #24, the City Charter, and applicable Procurement Policy Board rules in two major areas.

• HRA did not enter into contracts for purchases of services when required, in violation of the City Charter, PPB rules, and Comptroller’s Directive #24. Instead HRA used Purchase Orders to process payments for these services, which totaled $145,809,224.

• HRA did not register a Memorandum of Understanding (MOU) with the New York City Comptroller’s Office, in violation of the City Charter and PPB rules. HRA paid a total of $35,734,637 to the New York City Housing Authority (NYCHA) for providing the Job Opportunity Program, community center programs, and summer employment programs without having registered the MOU with the Comptroller’s Office.

Except for the above issues, we found that:

• Sampled vouchers and purchase documents were properly approved and authorized.

• Appropriate documentation was maintained to support the sampled vouchers.

• Sampled invoices were on file to substantiate the amount paid.

• Purchase files contained documentation indicating that goods and services were actually received.

• The drug rehabilitation centers we visited were adequately maintained.

In addition, our examination of OTPS expenditures by HRA disclosed no instances in which monies were improperly used.

Audit Recommendations

We make the following five recommendations, that HRA:

• Ensure that it follows the City Charter and PPB rules when purchasing services by entering into formal contracts with these vendors.

• Discontinue using POs to procure services.

• Register all these contracts and purchases with the Comptroller’s Office, as required by the City Charter.

• Ensure that it adheres to provisions of Comptroller’s Directive #24 by using the correct purchase document when processing payments through FMS.

• Present its MOUs to the Comptroller’s Office for registration.