Objective

To assess the extent of implementation of the 11 recommendations included in our initial audit report, Oversight of Contract Expenditures of Bowery Residents’ Committee (Report 2019-N-8).

About the Program

The New York City Department of Homeless Services (DHS), an administrative unit of the New York City Department of Social Services (DSS), is the agency responsible for providing transitional housing and services for eligible homeless families and individuals in New York City (City) and for providing fiscal oversight of the homeless shelters. In February 2011, DHS contracted with the Bowery Residents’ Committee (BRC), a City-based not-for-profit organization, to provide emergency shelter and ancillary services for mentally ill and chemically addicted homeless adults at its 200-bed Jack Ryan Residence (JRR) for the period from September 2010 to June 2021. The original contract for $76.1 million was amended five times for a total of $12.7 million during the 2014-15 to 2018-19 fiscal years to an aggregate cost of approximately $88.8 million. During the 3 fiscal years ended June 30, 2019, BRC claimed $23.6 million in reimbursable expenses for the contract. 

DHS is responsible for monitoring its contract with BRC to ensure reported costs are allowable, supported, and program-related. To qualify for reimbursement, BRC’s invoices/expenses must comply with the DHS Human Service Providers Fiscal Manual (Fiscal Manual), the New York City Health and Human Services Cost Policies and Procedures Manual (Cost Manual), and the JRR contract. 

The objective of our initial audit, issued on December 30, 2021, was to determine if DHS was effectively monitoring its contract with BRC to ensure reported costs were allowable, supported, and program-related. The audit, which covered the period from July 1, 2016 through June 30, 2019, found DHS was not effectively monitoring its contract with BRC to ensure reported costs were allowable, supported, and program-related. DHS did not complete required expenditure reviews or ensure that required year-end closeouts were completed on time. Consequently, for the 3 fiscal years ended June 30, 2019, we identified $1,428,199 or 6.05% of all reported costs that did not comply with the requirements in the Fiscal Manual, Cost Manual, and contract, including $535,140 in personal service costs, $831,772 in other than personal service costs, and $61,287 in indirect costs. The objective of our follow-up was to assess the extent of implementation, as of May 2025, of the 11 recommendations included in our initial report.

Key Findings

DHS officials have made some progress in addressing the issues we identified in the initial audit report; however, more work needs to be done. Of the initial report’s 11 audit recommendations, two were implemented, seven were partially implemented, and two were not implemented.

Key Recommendation

Officials are requested, but not required, to provide information about any actions planned to address the unresolved issues discussed in the follow-up report within 30 days of the report’s issuance.