One of the city’s largest shelter providers is thumbing its nose at taxpayers – with help from lax supervision by the Department of Homeless Services, a new audit by the city’s comptroller found.
Despite having its oversight criticized in a previous 2011 audit, DHS failed to recoup approximately $350,000 in improper payments or to investigate roughly $5 million in questionable fees from Aguila Inc., a homeless shelter agency.
The firm – a Bronx nonprofit run by former DHS chief Robert Hess – has also racked up $600,000 in unpaid water and sewer charges, a follow-up audit by City Comptroller John Liu found.
“Despite their claims to the contrary, Aguila’s appalling record has not improved and DHS continues to turn a blind eye,” said Liu.
The new audit found a host of failings at DHS, including that the agency:
- Did not appropriately follow up after more than 80 percent of Aguila’s units failed their spot inspections
- Continues to violate city charter by doing business with the firm using unwritten contract agreements
- Will not explain how the varying rates the city pays for different shelters are set
After Liu’s office rejected two city contracts with Aguila in July for lacking certain specifics, the Mayor’s office sued the comptroller for impeding its business.
The contracts are worth $67 million.
On Wednesday, Liu sent Mayor Bloomberg a letter asking his office to drop the legal proceeding – and for DHS to drop Aguila as a vendor.
“The city should focus on fixing DHS and dump Aguila – instead of wasting its resources suing my office,” he wrote.
City Hall officials did not immediately respond to a request for comment.
The Department of Homeless Services disagreed with a number of the audit’s findings and recommendations – including disputing that the unwritten contracts violated the city’s charter.
In its 14-page response, the agency said it had recouped $558,000 from Aguila – rather than the $914,000 advised by the comptroller’s first audit – based on the findings of its own independent audit.
Agency officials also noted that failed inspections were not necessarily indicative of hazardous conditions.