Prime executives of taxpayer-funded teams working town’s homeless shelters gave themselves large salaries — and among the nonprofits nonetheless haven’t reported their pay, a stunning new report revealed.
Metropolis Corridor is scrambling to make modifications to its supplier compliance processes after an embarrassing report from the Division of Investigations uncovered inflated salaries, nepotism and a scarcity of aggressive bidding within the metropolis’s shelter contracting course of.
At the least 13 of DHS’s 87 contracted shelter suppliers nonetheless haven’t disclosed their govt compensation ranges to the Division of Homeless Companies — a violation of their agreements.
The damning report induced Metropolis Council Finance Chair Justin Brannan to comment that “clean checks to outdoors distributors and no-bid emergency contracts appear to move like a freshwater stream all through Metropolis Corridor.”
Brannan made his assertion at a Metropolis Council joint oversight listening to Tuesday the place council members grilled the Division of Social Companies Commissioner Molly Wasow Park over the findings of the October report, which recommends the company set up a chief compliance officer, extra carefully monitor shelter expenditures and set a cap for city-funded govt compensation.
“The administration has the responsibility and duty to handle metropolis funds with prudence to make sure metropolis funds, approved for public companies, are in reality serving the general public — not associates, household or personal pursuits,” Brannan mentioned.
The DOI recognized a number of shelter executives who paid themselves large bucks after securing city-funded contracts.
In a single occasion, the chief govt of a shelter supplier paid himself greater than $1 million in a single yr. That supplier, CORE, was nearly completely funded by town, in keeping with the report. Park mentioned DHS not works with CORE.
The president and CEO of supplier Camba obtained greater than $700,000 throughout a number of years, in keeping with the report.
The president and chief govt officer of Acacia Community Housing remodeled $916,000 in 2021.
A few of the nonprofits enhanced senior executives’ pay by contracting to different firms they personal.
For instance, nonprofit shelter supplier SEBCO Improvement Inc. used metropolis funds to pay for greater than $11.6 million in safety companies from a safety firm owned by SEBCO, in keeping with the report.
Senior executives at SEBCO then paid themselves almost $400,000 in salaries from the safety firm, in keeping with the report.
“The homeowners of the corporate have been listed publicly on the web site of each the nonprofit and the subcontractor for the safety firm,” Council member Julie Received mentioned.
“There are methods which can be automated to clean the online or scrape it for you so that you simply don’t run into issues like this,” Received mentioned.
The report additionally mentioned SEBCO employed 4 firms affiliated with the husband of a prime firm govt to supply extermination, upkeep and cleansing companies on the DHS-funded shelters.
Charles Diamond, particular counsel on the Mayor’s workplace of Contract Companies, testified on the listening to that he’s engaged on new guidelines round third-party contracts that might be out in 2025.
“These have been long run processes which can be coming to a conclusion,” Diamond mentioned of town’s effort to assessment its contracting processes.
The report additionally recommends that DHS “conduct extra sturdy opinions of bills” of suppliers, which Park pushed again on.
“Organizations want some stage of flexibility,” Park mentioned.
“If we’re signing off on each little greenback {that a} nonprofit spends, then we are literally harming their capacity to function,” Park mentioned. “We’re perpetually in search of that stability.”
Park additionally mentioned DSS follows the identical nepotism coverage as the remainder of town and insisted the company has been bettering in compliance.
“We’ve strengthened our disclosures throughout the board,” Park mentioned.
When Brannan requested Park about current corruption allegations at Metropolis Corridor, Park insisted that the DSS contracting course of has remained impartial.
“DSS follows procurement insurance policies very carefully,” Park mentioned. “We persist with the letter of these guidelines and Metropolis Corridor personnel are usually not straight concerned in any of our contracting actions.”
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