Audit Report on the on the Human Resources Administration’s Monitoring of the Homebase Program

Executive Summary

The objective of this audit was to determine whether the Human Resources Administration (HRA) has adequate oversight over its Homebase Homelessness Prevention Program.

The mission of the New York City (City) Human Resources Administration/Department of Social Services (HRA/DSS) is to fight poverty and income inequality by providing food and emergency rental assistance to City residents in need of such assistance.  DSS is comprised of the administrative units of HRA and the Department of Homeless Services (DHS).^[1]

HRA’s Homebase Homelessness Prevention Program (Homebase), started in 2004 under DHS, is structured as a neighborhood-based homelessness prevention network with 26 locations across the City’s five boroughs.  Homebase offers a range of services and is designed to provide personalized assistance to families at risk of homelessness and help them develop plans to overcome an immediate housing crisis and “achieve housing stability.”

Homebase primarily serves households whose income is below 200 percent of the federal poverty level for families with children or 30 percent of Area Median Income for adult households who are at risk of homelessness or who have recently left the shelter system.

In January 2017, the administration of Homebase was transferred from DHS to HRA and in October 2017, HRA began to enter into new Homebase contracts with the Homebase service providers.  These new Homebase contracts require most of the same deliverables as the contracts that had previously been entered into by DHS.

Currently, HRA has Homebase contracts with seven non-profit organizations: Help USA; Bronxworks; Catholic Charities Community Services Archdiocese of NY (ARCHNY); Catholic Charities Neighborhood Services (CCNS); CAMBA; Rise Boro Community Partnership; and SUS Urgent Housing Programs.  These organizations had 27 individual contracts with HRA or DHS during the audit scope period.  Eleven contracts were entered into when the program was run by DHS and 16 contracts were entered into by HRA in October 2017.

For Calendar Years 2018 and 2017, DSS reported total expenses for the Homebase program of $53,720,899 and $53,086,273, respectively.  The City Tax Levy portion of these amounts for 2018 and 2017 were $27,684,745 (52 percent) and $27,054,090 (52 percent), respectively.

Audit Findings and Conclusion

The audit found that HRA has inadequate oversight over the Homebase Program.  We found that HRA’s reviews of Homebase providers’ case files were not consistently performed or reviewed.  In the limited number of case file reviews that HRA did conduct, HRA reviewers frequently raised concerns about missing documentation and client program eligibility, which suggests that regular and more frequent reviews were needed.  Moreover, in the sample of Homebase provider case files reviewed in connection with the audit, we found deficiencies similar to the ones identified by HRA during its case file reviews.  These included incomplete proof of income documentation and missing financial assistance documentation.  In addition, we found deficiencies in the providers’ documentation of services they provided.  We also found that HRA’s exception and case service level override policies were not adequately documented in written policies or clearly communicated to providers.

In addition, we found a weakness in HRA’s file review methodology in that providers were given advance notice of the files that would be reviewed.  Such notice undermines the effectiveness of the reviews because it allows providers the opportunity to belatedly create required documentation that had not been maintained in the ordinary course of business.

Further, the audit found that HRA did not perform timely fiscal reviews of providers and did not ensure timely submission by the providers of their audited financial statements.  In addition, DSS—as the agency responsible for overseeing HRA and DHS—did not consistently follow its procedures for the issuance and recoupment of advance payments made to providers.  As a result, as of March 6, 2019, DSS had failed to recoup $2,271,797 in advance payments for seven contracts that were closed out in October 2017.  Further, providers failed to make timely submissions of their year-end close-out reporting for 12 contracts.

Additionally, we found inaccuracies and inconsistencies in HRA’s Homebase reporting.  In particular, we identified instances where clients were recorded in DHS’ Client Assistance and Rehousing Enterprise System (CARES) with incorrect family types and funding sources.  These problems impede HRA’s ability to accurately determine clients’ program eligibility and the length and types of services they should be provided.  We also found that HRA did not appropriately include all single adults who return to shelter in the number of returning single adults that it reported in the Mayor’s Management Report (MMR).^[2]

Finally, under Other Matters, we found that HRA does not fully track clients who return to the Homebase program for assistance.  Such tracking could help HRA to better evaluate the effectiveness of its Homebase programs and providers, as well as provide critical information to the City for an overall assessment of the effectiveness of its programs to reduce homelessness.

Audit Recommendations

Based on the audit, we make 19 recommendations, including:

• HRA should improve its monitoring controls to ensure that it conducts two formal case file review cycles annually and should ensure that its case file review summaries are reviewed for accuracy and sent to the providers timely.
• HRA should not give providers advance notice of the case files to be reviewed.
• HRA should ensure that fiscal audits of Homebase providers are conducted on a timely basis.
• DSS should implement and enforce procedures to track the issuance and recoupment of Homebase advance payments, including but not limited to: conducting monthly reconciliations of advance payments to the recoupment records; establishing an advance payment tracker; and reconciling advance payment information from HHS Accelerator and FMS.
• DSS should ensure that recoupments for advance payments and year-end close-outs are made in a timely manner, and that remaining outstanding advances are deducted from close-out invoices in accordance with its Fiscal Manual.
• DSS should make every effort to recover the outstanding advance payment amounts for the closed contracts identified in the audit.
• HRA should ensure that providers promptly upload copies of their certified financial statements into the City’s database used to process provider’s financial information in accordance with their contract requirements.
• DSS should ensure that CARES has proper validation rules to prevent clients from being assigned to incorrect funding type, family types, or service levels.
• DSS should strengthen its controls over the calculation of the retention data to ensure that the criteria set are consistent and the figures reported in the MMR are accurate.
• HRA should consider tracking the number of clients who return to the Homebase Program after their cases are closed.

Agency Response

In its response, HRA agreed with five recommendations (#s 2, 11, 12, 17, and 18) and partially agreed with eight recommendations (#s 1, 3, 4, 10, 13, 14, 15, and 16).  HRA disagreed with the need for the remaining six recommendations that it track the issuance and recoupment of advance payments (#5); ensure that recoupments for advance payments and year-end close-outs are made timely (#6); ensure that modified recoupment schedules are documented and adhered to (#7); recover outstanding advance payments (#8); and ensure that first advances are recouped before second advances are recouped (#9).  Officials argued that these recommendations reflect the agency’s current practices.  HRA also disagreed that it should consider tracking the number of clients who return to the Homebase Program (#19).

Throughout its response, HRA challenged many of the audit’s findings.  Unfortunately, in doing so, HRA makes numerous inaccurate statements, misrepresentations and critical omissions.  To address these issues, we include a detailed discussion of the HRA response in Appendix II of this report.  After carefully reviewing HRA’s arguments, we find no basis to alter any of the report’s findings or conclusions.

[1] HRA is responsible for the administration and monitoring of the Homebase program.  DSS is responsible for issuing and recouping advance payments, the computer system used by Homebase and reporting indicators.  Accordingly, we refer to and make recommendations to both HRA and DSS throughout the report.

[2] The Mayor’s Management Report, which is mandated by the City Charter, serves as a public account of the performance of City agencies, measuring whether they are delivering services efficiently, effectively and expeditiously.