Comptroller’s audit finds that DHS’ fiscal operations could reduce the effectiveness of DHS’ oversight over providers. On January 24, 2017, the Office of the City Comptroller Scott Stringer released a report of an audit of Samaritan Daytop Village Inc., a not-for-profit corporation that provides shelter and services to homeless individuals and families under a contract with the Department of Homeless Services. The audit sought to evaluate whether payments to Samaritan and the payment rates were reasonable, appropriate, and adequately supported, and whether Samaritan was complying with its contract with DHS. Additionally, the audit sought to determine whether DHS adequately monitored Samaritan to ensure that all payments were made in compliance with the contract.
DHS is charged with providing temporary emergency shelter and social services to homeless adults and families. To accomplish this, DHS contracts with approximately 77 corporations to provide services, of which Samaritan is one. Samaritan is contracted to provide services throughout the City. The Comptroller’s audit covered the 2015 fiscal year (July 1, 2014, through June 30, 2015). DHS paid Samaritan approximately $51.8 million to operate four Single Adult Shelters and three Family Shelters.
In the final report, the Comptroller’s Office found that Samaritan generally complied with the fiscal requirements of its DHS contracts. The report did note weaknesses in Samaritan’s controls over the maintenance of its In/Out Log sheets at the Family Shelter facilities. The log sheets are used to determine the number of “care days” provided, for which the DHS is billed. For the Comptroller’s audit, Samaritan was unable to provide log sheets for 43 of 532 client cases, which represented 545 care days for which Samaritan billed DHS.
The audit did find that DHS provided excessive cash advances to Samaritan beyond the amounts dictated by DHS’ internal guidelines. DHS also failed to fully recoup these excess cash advances. DHS Fiscal Manual allows for service providers to receive in advance no more than one-sixth of the annual contract amount. The audit determined that DHS had paid Samaritan $1.5 million in excess cash advances beyond what was allowed by the guidelines. DHS had also failed to recoup $346,337 of the excess amount.
The Comptroller’s Office recommended that Samaritan maintain and safeguard log sheets to ensure that “care day” billing invoices are properly supported. To DHS, the Comptroller’s Office made four recommendations. First, it called for DHS to recoup the outstanding $347,337 from Samaritan. Second, DHS should follow its own Fiscal Manual when making advances and recoupments. Third, DHS should ensure that advance payments do not exceed the allowed maximum advance. Fourth, DHS should amend the Fiscal Manual or develop internal procedures that determine a frequency with which to conduct expenditure reviews.
Samaritan, in response to the audit, stated that it had since implemented a system to ensure better maintenance and safeguarding of the log sheets. DHS largely agreed with the recommendation. DHS did disagree with the second recommendation, stating that “It is the Agency’s practice to recoup within the same fiscal year whenever possible. However, if there are pending contract actions that prohibit the Agency’s ability to recoup within the same fiscal year, the Agency will not be able to recoup until the subsequent contract action.”
To read the full audit report, click here.
Audit Report on the Samaritan Daytop Village Inc.’s Compliance with Its Contracts with the Department of Homeless Services. FP16-068A, NYC Comptroller Scott Stringer (Jan. 24, 2017).
By: Jonathon Sizemore (Jonathon is the CityLaw Fellow and a New York Law School Graduate, Class of 2016).