New York City Comptroller Lander Announces Audits of City Agencies

 

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 expended or utilized efficiently and economically, and whether the desired goals, results, benefits, or agency programs are 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. The Comptroller’s office monitors implementation of audit recommendations and conducts follow up audits to assess improvement. The Comptroller’s Audit Recommendations Tracker is available here.

The Comptroller announced the completion of the following audits and follow up audits:

FINANCIAL AUDITS 

New York City Emergency Management: Audit on Oversight of Its Agreement with SLSCO LP for Property Management Services at COVID-19 Vaccination Sites (Issued November 1, 2022) 

The Comptroller’s office found that New York City Emergency Management (NYCEM) did not always ensure SLSCO LP’s compliance with performance standards set forth in its emergency agreement to manage property at New York City’s COVID-19 vaccination sites. Specifically, the audit found that NYCEM did not always properly document its monitoring of SLSCO and its subcontractors’ performance. The audit also found instances of double billing, calculation errors, and use of incorrect rates in SLSCO’s invoices, resulting in $136,468 in overpayments, and an additional $23,861 paid to SLSCO without supporting documentation.

Educational Construction Fund: Audit Report on Oversight of Its Lease Agreements with the East 57th Street Project (Issued October 13, 2022)

The Comptroller’s office found that ECF generally had adequate oversight over the lessees’ compliance with the Ground Leases, the Residential Condominium Section Ancillary Agreement (RCS Agreement), and the Recurring Revenue Ancillary Agreement (collectively, Lease Agreements) and that the project’s lessees generally paid ECF in accordance with the lease terms. However, the financial interests of the City of New York (the City) were not fully safeguarded because ECF waived $30,346 in late fees that were legitimately due and owing.

Analysis of the Financial and Operating Practices of Union-Administered Benefit Funds’ Fiscal Year 2020 (Issued October 6, 2022) 

Of the 106 funds, our office identified 15 benefit funds with more than one potential area of concern, none at-risk of financial insolvency. The Comptroller’s office will conduct follow-up meetings with the funds with potential risk factors to discuss the identified conditions and consider potential follow-up audits.  The Office of Labor Relations should also review and follow up on the potential financial issues identified in this report. These financial risks fall into four categories:

• Funds operating at a deficit, due to expenses that exceeded revenues, which reduced their available reserves;
• Administrative expenses that exceeded 30% of the average for that category of fund;
• Benefit expenses that were 20% lower than the average for that category of fund; and

• Operating surpluses that resulted in higher-than-average reserves.

In addition to the financial issues identified above, the review also identified the following concerns:

• 18 funds received “qualified” opinions from their independent auditors.
• 51 funds did not submit their Directive #12 reports within the prescribed time frame.
• 57 funds did not use a certified public accountant (CPA) firm listed on the Comptroller’s prequalified list as recommended by Directive #12 to audit their financial statements.

• 1 fund continues to delay benefit eligibility for new members in violation of its agreement with the City of New York.

MANAGEMENT AUDITS  

New York City Department of Education: Follow-up Audit Report on the Safety Measures Implemented in Response to the COVID-19 Pandemic (Issued November 1, 2022) 

This follow-up audit assessed the New York City Department of Education’s implementation of recommendations in response to the COVID-19 pandemic in 2021. The Comptroller’s office conducted the audit to determine whether the Department of Education (DOE) established benchmarks for meeting standards of in-person instruction and assessed whether DOE monitored compliance with those standards. The audit found that although DOE established such benchmarks, it produced insufficient evidence to reasonably ensure that the agency carried out its COVID-19 procedures on a consistent basis in hundreds of individual schools throughout the city. The audit was particularly concerned with benchmarks related to cleaning, disinfection, and air quality.

Drawing from health protocols established by the Centers for Disease Control and Prevention (CDC) and New York State, the New York City Department of Health and Mental Hygiene (DOHMH) and DOE jointly created guidance for DOE’s schools to follow in preparing to offer in-person instruction. This follow-up audit found that of the seven recommendations made in the initial audit, five are no longer applicable given the CDC’s relaxed restrictions relating to COVID-19. Of the remaining two recommendations, one was implemented, and one was in the process of being implemented.

New York City Department of Youth and Community Development: Follow-up Audit Report on Oversight and Monitoring of Its Crisis Shelters (Issued October 26, 2022) 

The initial audit, released in 2019, found that the Department of Youth and Community Development (DYCD) did not have adequate controls over the agency’s monitoring of the contracted crisis shelters in several key areas. Most notably, the audit found  inadequate supervisory reviews of the program managers’ site visit reports on the crisis shelters, a lack of evidence that DYCD appropriately informed crisis shelters of the results of the site visits, and, in some instances, crisis shelters’ personnel files showed that the required Statewide Central Registry of Child Abuse and Maltreatment clearances and criminal background checks were not completed until after employees’ start dates.

This follow-up audit found that DYCD has improved its oversight of crisis shelters to help ensure compliance with key provisions of their contracts and with applicable rules and regulations. Of the seven recommendations made in the initial audit, this follow-up audit found that five have been implemented and two have been partially implemented.

Department of Buildings: Follow-up Audit Report on Controls Over Field Inspectors (Issued October 13, 2022) 

This follow-up to a 2018 audit found that DOB has improved its controls over inspectors to be reasonably assured that inspections are being performed in an appropriate manner and that the results are properly reported and recorded. Of the 13 recommendations made in the initial audit, this follow-up audit found that five have been implemented, one has been partially implemented, two are in the process of being implemented, and five are no longer applicable.

New York City Housing Authority: Audit Report on Controls over the Installation of Roof Top Fans at NYCHA Buildings (Issued September 30, 2022) 

The Comptroller’s office found that NYCHA generally maintained adequate controls over the vendors’ installation of the roof top fans. NYCHA monitored the installations and took steps to combat the delays, including the use of emergency contracts to attract qualified vendors; mobilized its asbestos team to identify the fans throughout the developments where asbestos remediation efforts were needed and took corrective action; and negotiated with manufacturers to improve lead times and establish direct communication to minimize delays and to reduce the time between manufacturing and shipment.

In addition, the auditors found that NYCHA should update its written procedures for certifying that work is completed in a satisfactory manner prior to issuing payments. A review of 20 sampled invoices showed that an inspector signed all associated SOS forms, however, only one was dated. Without requiring a sign-off date, NYCHA has limited assurance that payments are made after staff confirms that the work reflected on the invoices has been satisfactorily completed.

AUDIT LETTER & SPECIAL REPORTS  

Conflict of Interest Board: Follow-up Audit Report on Oversight over Collection and Reporting of Enforcement Fines (Issued October 27, 2022) 

The audit found that two recommendations from the initial audit in 2017 have been implemented, one has not been implemented, and one is no longer applicable. The auditors were unable to verify the implementation status of the remaining two recommendations because of insufficient evidence.

Department of Consumer and Worker Protection: Follow-up Audit Report on Enforcement of the New York City Earned Sick Time Act (Issued October 13, 2022) 

The purpose of this audit was to assess the implementation status of recommendations issued to the Department of Consumer and Worker Protection (DCWP) in the Audit Report on the Department of Consumer and Worker Protection’s Enforcement of the New York City Earned Sick Time Act, issued on June 28, 2019. The Comptroller’s office determined that DCWP improved its monitoring of restitution and fine payments and intake, investigative, and litigation processes related to its enforcement of the City’s Paid Sick Leave Law. Of the 21 recommendations made in the initial audit in 2019, this follow-up audit found that 19 have been implemented and two are no longer applicable. This follow-up audit makes no new recommendations to DCWP.