Audit Report on the Oversight of the WeCARE Program Contractors by the Human Resources Administration

AUDIT REPORT IN BRIEF

The Human Resources Administration (HRA) is responsible for helping individuals and families achieve and sustain their maximum degree of self-sufficiency. In Fiscal Year 2005, HRA developed an initiative intended to expand services and improve the employability of clients with health and/or mental health barriers to employment. The Wellness, Comprehensive Assessment, Rehabilitation, and Employment (WeCARE) program was designed to offer specialized services and individual support to clients with disabilities.

WeCARE services are provided by two outside contractors: Federation Employment and Guidance Service (FEGS) and Arbor Education and Training (Arbor). HRA budgeted approximately $201,465,000 for the WeCARE contracts to serve more than 45,000 clients annually over the initial three-year contract term. The budget specifies that two-thirds of the contract amount is for milestone completion and one-third for expense. HRA paid the WeCARE contractors a total of $65.8 million for services provided to clients during Fiscal Year 2007.

We conducted this audit to determine whether HRA adequately monitors WeCARE program contractors to ensure that they are complying with key provisions of their contracts.

Audit Findings and Conclusions

HRA’s monitoring of its WeCARE contractors has a number of weaknesses. Customized Assistance Services (CAS), the HRA division with the responsibility to oversee and monitor the WeCARE program, does employ useful oversight techniques, such as biweekly visits to contractors’ sites to view the program’s operations and address outstanding issues, monthly meetings with contractors, requiring contractors to submit monthly reports of milestone completion and deliverables, and the stationing of Senior WeCARE Specialists at contractors’ sites to act as liaisons between the contractors and HRA.

However, HRA has not established a formal program monitoring and evaluation process with regard to verification of contractor-submitted data, thereby increasing the risk that HRA will not be aware of contractors’ noncompliance with provisions of their contracts. HRA’s monitoring of key financial components of the WeCARE contracts likewise had deficiencies; it lacked sufficient payment reviews of several contract milestones and performed inadequate payment review of two major milestones. Additionally, HRA needs to increase its efforts with regard to identifying and recouping duplicate or erroneous payments and verifying monthly contractor expense-reimbursement requests. If HRA were to correct these weaknesses, it would be better able to ensure that contractors are paid for services actually provided to WeCARE clients and that City funds are properly disbursed and protected.

Audit Recommendations

To address these issues we make 14 recommendations, including that HRA should:

• Ensure that standard operating procedures are formulated and updated to accurately reflect specific requirements for various activities performed by CAS in monitoring the WeCARE contracts.

• Create a central repository to record and maintain activities concerning the contracts.

• Establish a formal process for performing verifications of contractor-submitted data on a regular basis to better ensure that data entered in NYCWAY by contractors is accurate.

• Ensure that responsibility for milestone prepayment reviews is clearly defined.

• Perform periodic reviews of supporting documentation for expenses claimed by vendors to better ensure that the expenses are legitimate.

Agency Response

In its response, HRA generally agreed with 12 of the 14 audit recommendations.