New York watchdog finds Brooklyn homeless shelter wasted $500,000 worth of food, and $2.4 million overall

New York watchdog finds Brooklyn homeless shelter wasted $500,000 worth of food, and $2.4 million overall

A nonprofit organization that operates a homeless shelter in downtown Brooklyn couldn’t explain how it spent the nearly $2.4 million in funding it received from the city’s Department of Homeless Services over three years, according to a new review by the State Comptroller’s Office.

Comptroller Tom Dinapoli’s audit determined that the city’s Department of Homeless Services “also did not complete the required expense reviews” and that the service provider it funds, the Institute for Community Life, may have wasted more than 155,000 meals worth nearly half a million dollars from 2016 to 2019.

Di Napoli said the review showed the city’s homeless services agency should “do a better job of ensuring the city’s homeless shelters are properly managed”.

“Our audit found that a shelter charged the city with little or no explanation, unreasonably and regularly tossing mountains of food in the trash,” he told the Daily News. “New York City is experiencing a homelessness crisis and must demand more accountability from shelter providers, who charge millions of dollars.”

The waste mentioned in DiNapoli’s report occurred between July 1, 2016 to June 30, 2019. During that period, the contract with ICL cost the city approximately $51 million with reimbursable expenses associated with the contract amounting to approximately $25 million.

These expenses occurred directly in the administration of former Mayor Bill de Blasio. But the current mayor, Eric Adams, will be responsible for rectifying the situation — particularly given that the nonprofit is still under contract with the city to provide services, according to public records.

When asked what the city plans to tackle the waste and unaccounted for expenses, Adams’ press team did not immediately respond.

The Dinapoli revelation comes at an inopportune moment for Mayor Adams.

The influx of thousands of migrants from South and Central America seeking asylum has strained the city’s homeless infrastructure and led to dozens of cases in the city violating state law on the right to shelter. On Monday, Adams announced that an asylum seeker had committed suicide.

For Adams, the situation was a major political headache — and a political victory for Texas Governor Greg Abbott, a Republican who had been shipping immigrant buses to the Big Apple in protest of President Biden’s immigration policy.

For weeks, Adams said he was committed to helping asylum seekers, but he also indicated this weekend that the city could sue Texas over its policy.

The new controller’s scrutiny is another problem for Adams, who took the reins at City Hall in January.

Beginning in 2014, the Institute for Community Life was contracted by the Homeless Services Administration through December 2021 to provide shelter and medical care for mentally ill and drug addicted women at the Tillary Street Women’s Shelter. From 2016 to 2019 — the period the DiNapoli audit focused on — the nonprofit claimed $24.5 million in contract recoverable expenses. Of these expenses, DiNapoli found that $1.2 million in personal service costs were ineligible for reimbursement and $1.1 million in indirect and other expenses were also ineligible.

The comptroller found that among the waste were thousands of meals that had been discarded by the nonprofit.

According to the audit, the controller requested 36 months’ worth of “food use records,” but only received 21 months.

“These records show that over the 21-month period, ICL purchased 267,883 meals at a total cost of $763,538. Of these, we determined that 89,154 meals (33%) were disposed of, valued at approximately $255,717,” As the audit indicates. Projecting our calculations for the remaining 15 months of the review period, we estimate that ICL probably disposed of approximately 155,760 meals (valued at $444,690) over the full 36-month review period.

The audit reported that DHS officials “disagree” with those findings, but the Comptroller’s Office said it stood by its findings.

While conducting the audit, the controller requested employee time records to verify claims made by the nonprofit. But the Institute for Community Life was unable to provide a full account of these records, claiming to the DiNapoli team that they were lost in a 2019 computer hack attack.

The nonprofit’s president and CEO, Jodi Rudin, said that while she did not agree with all of DiNapoli’s findings, she acknowledged that “we have some challenges with documentation and oversight” and have implemented “processes to strengthen oversight.”

“We have rolled out an automated document management system. We now track food consumption across our shelters and calibrate the number of meals we buy to meet meal demand. We have always followed the spirit of the law, and the new systems we have put in place will better ensure that we follow the letter of the law,” Rudin said. All in all, we strive to be good partners for our government funders and provide care and support to thousands of clients who depend on us.”

Aside from food waste and personnel costs, the review also found scant records of other expenses incurred by the Community Life Institute, which “did not provide invoices and/or proof of payment” for more than $71,000 in utility expenses, $61,000 in insurance costs and nearly 52,000 dollars in utility repairs.

DiNapoli found a bug in managing homeless services, too.

“We have determined that DHS has not adequately monitored ICL’s financial activities,” the review states. “Department of Homeland Security’s internal controls were insufficient to detect unauthorized and unsubsidized expenses claimed by ICL and to prevent payment of such expenses.”

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