New York City Comptroller Lander announced the release of several audits conducted by the Office of 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 being used efficiently and economically, and whether the desired goals, results, benefits, of agency programs are being 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.
“Audits are a critical transparency and accountability tool for New Yorkers to ensure our public resources are being used wisely, spot problems, and propose changes to how government agencies deliver services. I applaud our audit team’s hard work during this fiscal year and their continued efforts to ensure City agencies are meeting their obligations and making the best use of resources to serve New Yorkers,” said Comptroller Brad Lander.
Between January 2022 and the end of the fiscal year on June 30, 2022, Comptroller Lander and his office has released 23 audits and audit letters, and today the Comptroller announced the completion of the following audits.
FINANCIAL AUDITS
In 2019, the 92 welfare and annuity funds spent nearly $118.1 million (5.28% on average) of their total revenue on administration as compared with $113.5 million (7.01% on average) in 2018. Among the findings were several financial issues including expenses that exceeded revenues, resulting in operating deficits; administrative expenses that exceeded the average for that category of fund; and operating surpluses that resulted in higher-than-average reserves. (Issued January 25, 2022)
While the New York Department of Probation (DOP) generally complied with the applicable regulations, directives, policies and procedures, DOP did not obtain overtime cap waivers as required and, as a result, DOP paid cash overtime to 49 employees in Calendar Year 2019 and 12 employees in Calendar Year 2020 who were not entitled to receive it. The auditors also found that no staff documented taking any meal breaks during their overtime shifts, despite the mandate to provide such breaks under NYS Labor Law. While employees may voluntarily waive this right, the waiver is intended to be occasional and at the option of the employee. The absence of documented meal breaks and/or waivers raises compliance concerns. In addition, weaknesses were found in DOP’s monitoring and control of overtime usage. (Issued May 10, 2022)
This audit found that all student activity fees collected through CUNY’s Fully Integrated Resources and Services Tool (CUNYfirst) during Fiscal Years 2019 through 2021 were turned over to the Guttman Association, which supervises and reviews budgets for programs supported by student activities. The audit found certain weaknesses in the Guttman Association’s controls over expenses funded by student activity fees. In addition, the audit found no evidence of the Audit Committee’s activity or evidence that authorization for student activity fees receivable write-offs was maintained. (Issued June 29, 2022)
Although Verizon promptly remitted monthly 911 surcharges to the New York City Department of Finance (DOF), the auditors were unable to determine whether Verizon billed and collected the 911 surcharge from all customers required to pay the surcharge, or whether Verizon paid all 911 surcharge revenues that it collected from customers to DOF because Verizon did not provide requested access to relevant information and staff. As a result, the auditors were unable to determine the accuracy and completeness of Verizon’s data and obtain sufficient evidence to verify that Verizon properly billed, collected, and remitted the correct 911 surcharge amounts. In addition, Verizon did not submit the required annual report and monthly lists of non-paying customers to DOF. (Issued June 30, 2022)
The Comptroller’s Office found that the New York City Department of Transportation (DOT) generally complied with the federal, State, City and its internal requirements when procuring and managing Contract No. 6. However, certain weaknesses were found in DOT’s internal controls that resulted in inefficient use of funds and reflected a lack of transparency and accountability in some of the agency’s public procurement and contract administration processes. The audit found that DOT accepted an inadequate bid analysis and did not require a revision of the engineer’s estimate as necessitated by the New York State Department of Transportation (SDOT). The audit also found weaknesses in DOT’s change order and payment processes. Weaknesses in the payment approval process resulted in overpayments to contractors, totaling $52,228 in disallowable charges. (Issued June 30, 2022)
MANAGEMENT AUDITS
The Comptroller’s Office has found that the Department of Citywide Administrative Services (DCAS) generally complied with the Mayor’s Office of Contract Services’ (MOCS’) guidance on COVID-19-related procurements and with its own COVID-19 procurement process when awarding the contract to Best Buy. However, DCAS did not ensure that its understanding with the New York City Department of Emergency Management concerning the agencies’ respective roles in awarding the contract and in monitoring and paying the vendor was clearly formulated in a written agreement. (Issued May 17, 2022)
The Comptroller’s Office has found that that Department of Health and Mental Hygiene (DOHMH) did not consistently conduct inspections as required or within the timeframes established in Title 24, Chapter 6, of the Rules of the City of New York and by DOHMH guidelines. For one type of inspection where the Rules did not set timeframes – re-inspections required due to violations found in earlier inspections – DOHMH did not establish any. Agency protocols concerning follow-up inspections were not always followed, and the auditors also found that controls over the issuance and tracking of permits, permit decals and grade cards could be improved. (Issued June 13, 2022)
The Comptroller’s Office has found that the Manhattan Borough President’s Office (MBPO) lacked adequate controls over its inventory. The MBPO did not (1) maintain a complete inventory listing, (2) perform periodic inventory counts, (3) immediately tag equipment when received, or (4) store unissued equipment in a secured area. Notwithstanding these deficiencies, the MBPO was generally able to account for the computers and related equipment it recently purchased through September 2021. Additionally, the MBPO took several actions during the audit—such as drafting a framework for written policies and procedures and consolidating its inventory into a comprehensive list—to begin rectifying several of the deficiencies identified. (Issued June 27, 2022)
The New York City Department for the Aging (DFTA) contracts with Home Care Agencies (HCA) to assist older adults (clients) with daily living activities. The Comptroller’s Office has found that DFTA ensured that the invoices paid to HCA for services provided during Fiscal Years 2020 and 2021 were generally calculated correctly, that all paid invoices were approved, and that all advances provided to HAs during Fiscal Years 2020 and 2021 were recouped. However, DFTA lacked an adequate review and reconciliation process to assess HCA’s reporting of services provided to clients and their invoicing of those services. DFTA did not review time records to verify that the payments rendered by DFTA were for service hours actually provided and did not perform other compliance tests which would identify potential issues. (Issued June 27, 2022)
The Comptroller’s Office has identified weaknesses in the District Attorney for New York County’s (DANY’s) oversight of its office equipment inventory. Specifically, DANY performed periodic counts of only those items purchased with federal funds rather than its entire inventory, did not consistently assign its asset tags in sequential order, and did not ensure that all tagged assets were recorded in its inventory records. After sharing these matters with DANY in the above-referenced management letter, the agency took corrective action. (Issued June 28, 2022)
The Comptroller’s Office has found that the New York City Police Department (NYPD) was generally able to account for property related to the sampled invoices recorded in its property tracking systems. However, the audit found that NYPD did not consistently conduct required inventory counts of property on hand. While NYPD generally met the minimum retention periods before disposing of held property, many items are held well beyond their retention periods. Finally, the audit found that NYPD should improve its documenting of claimants’ identification information when property is returned. (Issued June 28, 2022)
The Comptroller’s Office has found that H+H has established several inventory rules and guidelines relating to the supply and management of medical surgical supplies at its post-acute and long-term acute care facilities. However, the agency does not adequately ensure that its facilities comply with those rules and guidelines, nor do those rules and guidelines address certain essential aspects of inventory management. H+H has instituted cycle counts to help ensure that each facility has sufficient PPE in stock and has established policies requiring that physical inventory counts be conducted periodically and that material discrepancies be investigated. H+H has also established protocols to distinguish responsibilities for receiving inventory from storing and distributing inventory. However, H+H did not ensure that some of its inventory policies and procedures were implemented. Additionally, some of the existing inventory procedures do not appropriately account for all inventory items. (Issued June 29, 2022)
AUDIT LETTER & SPECIAL REPORTS
The Comptroller’s Office has found that the Department of Homeless Services (DHS) followed the Mayor’s Office of Contract Services’ (MOCS) guidance for COVID-19 related emergency procurements in awarding the contract to HANYC. Auditors reviewed 434 lodging invoices, which revealed that the requests for lodging payments had the proper supporting documents and were paid in a timely manner. However, the auditors also found that DHS did not always ensure that its mechanism for keeping track of payments accurately reflected the contract and payment information associated with the hotels. (Issued April 29, 2022)
The Comptroller’s Office has found that the New York City Commission on Human Rights (CCHR) complied with Local Law 25. CCHR’s website includes a translation feature at the top of the page for viewing text and essential information of the website in various languages, including the top 10 designated NYC LEP languages. (Issued May 25, 2022)
The Comptroller’s Office has found that the New York City Commission on Human Rights (CCHR) complied with Local Law 30. CCHR has developed and updated its Language Access Plan and designated its Policy Analyst as its Language Access Coordinator. CCHR contracts with several language access vendors for language access services including Langalo and Human Touch for translations, Voiance for telephonic interpretation, and B&N Legal Interpreting Inc. for in-person/virtual interpretation. (Issued May 25, 2022)
The Comptroller’s Office has found that the New York City Commission on Human Rights (CCHR) complied with Local Law 120 of 2020. CCHR developed the required anti-discrimination poster, also known as the Notice of Rights poster, which provides information on the forms of discrimination prohibited by the City Human Rights Law including age discrimination in employment, housing, public accommodations, discriminatory harassment, bias-based profiling by law enforcement, and lending practices. (Issued May 25, 2022)
On May 19, 2006, the New York City Department of Transportation (DOT) entered into a $1.397 billion 20-year franchise agreement with Cemusa. Cemusa was purchased by JCDecaux Europe Holding and JCDecaux SA who later obtained the contract to design, construct, install, and maintain coordinated street furniture throughout the City for at least 3,300 bus stop shelters and 330 newsstands. The Comptroller’s Office has found that JCDecaux paid the correct cash component of the franchise fee, in both years, and accurately recorded and reported advertising revenue, with the exception of coin revenue that it deducted from the revenue it reported to the City. JCDecaux also provided up to 22.5% of its inventory of advertising panels to NYC & Co. as required by the agreement. However, only limited assurance could be obtained by the auditors about the extent and value of the alternative compensation provided as the value of alternative compensation is determined solely by JCDecaux. (Issued June 15, 2022)
The Comptroller’s Office has found that the New York City Department of Finance (DOF) generally followed its process to ensure that all owners and co-owners receiving the Senior Citizen Homeowners’ Exemption (SCHE) met the eligibility requirements to receive the exemption. DOF improved certain aspects of its controls over the exemption process that were identified in a prior audit issued in 2016 that found DOF granted the SCHE to ineligible properties, including those owned by corporations. In the current review, the auditors found DOF reduced the number of ineligible properties granted the SCHE by 95% as compared to the prior audit. However, auditors conducting the recent review still identified errors that led to a loss of property tax revenue of $3,076,362 during Fiscal Years 2019 and 2020. (Issued June 27, 2022)
The Comptroller’s Office found that the New York City Department of Mental Health and Hygiene (DOHMH) made genuine efforts to comply with the requirements of Section 23-702 of the City Administrative Code – by automating the process for posting all inspection results for all public schools as inspections are completed. Despite this, the auditors were unable to locate such postings for many Manhattan schools for School Years 2018-2019 and 2021-2022. (Issued June 30, 2022)
The Comptroller’s Office also conducted two audits on access and security controls over security systems, for the New York City School Construction Authority (issued June 14th) and New York City Small Business Services (issued June 17th). Previously announced audits during this period covered the NYPD’s civilianization efforts, enforcement of pandemic price-gouging, and shelter intake processes for homeless families.
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