New York City’s costly emergency shelter system is beset by nepotism, a lack of competitive bidding, and excessive salaries, which are driving up costs for the city’s taxpayers, according to a scathing new report.
The report by the city’s Department of Investigation said a probe of the shelter system dating back to 2021 uncovered instances of nepotism in city contracts for shelters, a failure to follow competitive bidding rules when procuring goods and services with public money and poor controls over the use of taxpayer dollars for executive compensation, among other problems.
The report also criticized excessive salaries paid to some nonprofit executives with city money.
Investigators found that shelter providers have hired immediate family members of senior executives and board members in violation of their city contracts.
In one case, a shelter provider employed several of its CEO’s children, the report’s authors said.
“New York City is currently making an unprecedented financial commitment to address homelessness,” the report’s authors said.
“For that reason, it is more important than ever that it implement stronger risk management and compliance controls around this spending.” A 2021 report by the city agency highlighted similar concerns about fraud and waste in the shelter system under then-Mayor Bill DeBlasio, and made several recommendations that officials say weren’t fully implemented.
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