New York City’s $4B shelter system rife with mismanagement, nepotism, investigators say
NEW YORK– A yearlong investigation into New York City’s $4 billion homeless shelter system revealed widespread mismanagement, self-dealing and cronyism.
The review of dozens of nonprofits that contract with the city to provide shelter to unhoused individuals and families began in 2021, before the arrival of tens of thousands of migrants put additional strain on New York’s shelter system. It was released Thursday by the city’s Department of Investigations.
Among the problems uncovered was that some shelters employed immediate family members of senior executives and board members, in apparent violation of their contracts with the city, the 100-page report said. In other cases, investigators found that some executives at city-funded shelters were also employed by security companies hired to provide services at the shelters.
Some shelter providers did not follow competitive bidding rules when purchasing goods and services, the researchers said. And some awarded multimillion-dollar maintenance contracts to companies tied to the buildings’ landlords, rather than bidding out the contracts.
Executives at some nonprofits funded largely by city taxpayers earned $700,000 or more a year, the report said, adding that the city has no rules governing how much they can earn.
“When it comes to protecting the massive tax dollars that city-funded nonprofits receive, prevention is critical,” Jocelyn Strauber, commissioner of the Department of Investigation, said in a statement. supervision is the best way to stop corruption, fraud and waste before it starts.”
Neha Sharma, a spokesperson for the city Department of Social Services, which oversees homeless services, said the department “takes any instance of noncompliance very seriously. That is why DSS has completely stopped doing business with a number of providers highlighted in the report. , improved invoice audit policies and practices, and strengthened our robust audit and accountability mechanisms.”
Sharma said the report “does not reflect our current contracting and oversight processes,” noting that the review began before the current mayor, Democrat Eric Adams, took office in 2022.
New York City has long provided shelter to more unhoused people than any other city in the U.S., in part because of a 1981 court ruling that requires the city to provide shelter to anyone who requests it.
According to the Department of Investigation report, the overnight population in city-funded shelters ranged from 45,000 to 55,000 from 2020 to mid-2022 and has since grown to more than 87,000, largely due to the large numbers of migrants arriving over the course of the time has arrived. past two years.
The city spent $4 billion on homeless shelters in fiscal year 2024, up from $2.7 billion in 2022, according to the report.