Audit Uncovers Major Flaws in NYC’s $432M DocGo Contract

August 06, 2024   1030

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The New York City Comptroller, Brad Lander, recently released an audit uncovering significant mismanagement and inadequate service provision in a $432 million contract between the Department of Housing Preservation and Development (HPD) and DocGo, a medical services company. This contract was intended to provide temporary housing and support services to asylum seekers, but the audit's findings raise serious concerns about the city's handling of this critical initiative.

Background of the DocGo Contract

In May 2023, HPD entered into a one-year, no-bid emergency contract with DocGo to provide temporary housing and support services for asylum seekers both inside and outside New York City. This decision was made amid a growing migrant crisis, with the city providing shelter and care to over 199,900 asylum seekers by May 2024​ (NYC Comptroller)​​ (NYC Comptroller)​.

Key Findings of the Audit

Unsupported Payments and Overbilling

The audit found that 80% of payments to DocGo were either unsupported or not allowed by contract terms. Over $4.7 million in expenses were deemed unallowable, and $6.3 million in claimed costs were inadequately documented. This includes payments for services that were either not provided or inadequately documented, such as meals and vacant hotel rooms​ (NYC Comptroller)​​ (NYC Comptroller)​.

Poor Oversight and Non-compliance

HPD failed to ensure DocGo complied with contract terms, particularly regarding the vetting of subcontractors. Only 29% of subcontractors were reviewed as required, and many were not properly documented or approved. Caseworker staffing levels were not met, resulting in inadequate support for asylum seekers​ (NYC Comptroller)​.

Health and Safety Violations

The audit reported serious health and safety hazards in the housing provided by DocGo. Issues included mold, pests, and inadequate living conditions. Many rooms lacked basic amenities like microwaves and refrigerators, and numerous asylum seekers reported dissatisfaction with the provided meals​ (NYC Comptroller)​​ (NYC Comptroller)​.

Political and Legal Implications

The contract was awarded without competitive bidding, raising concerns about the selection process and the appropriateness of DocGo as a service provider. Comptroller Lander's audit also highlighted the political tension between his office and Mayor Eric Adams' administration, as Adams defended the contract despite Lander's objections​ (amNewYork)​​ (Total News)​. The audit's release coincides with Lander's mayoral candidacy, adding a political dimension to the findings​ (Total News)​.

Recommendations from the Audit

The Comptroller's office recommended several corrective actions, including:

1. Recouping unallowable expenses from DocGo.
2. Obtaining proper documentation for inadequately claimed costs.
3. Improving oversight mechanisms to prevent future issues​​.

Detailed Findings

Unsupported Payments

The audit found that payments to DocGo for services such as meals and vacant hotel rooms were often unsupported by proper documentation. For example, the city paid $971,967 for 259,961 meals, but the actual need based on the migrant population was significantly lower​.

Staffing and Service Provision

HPD's failure to ensure adequate staffing levels resulted in asylum seekers receiving inadequate support. The required ratio of caseworkers to rooms was not maintained, leading to significant understaffing and failure to provide essential services such as medical appointments and school enrollments for children​​.

Health and Safety Concerns

The audit highlighted serious health and safety concerns in the housing provided by DocGo. Issues such as mold, pests, and lack of basic amenities were prevalent, with many asylum seekers expressing dissatisfaction with their living conditions​ ​.

Political Context and Implications

The awarding of the contract without competitive bidding has sparked significant political debate. Mayor Eric Adams defended the contract, emphasizing the urgent need to address the migrant crisis. However, Comptroller Lander's audit underscores the importance of transparency and proper vetting in such high-stakes contracts​.

Historical and Comparative Context

This situation is part of a broader context of how emergency contracts are handled in crisis situations. Comparing this case to similar contracts in other cities or contexts could provide valuable insights into best practices and areas for improvement​.

Conclusion

The audit of the DocGo contract has revealed substantial fiscal mismanagement and inadequate service provision, raising serious concerns about the city's handling of contracts meant to support vulnerable populations. The findings emphasize the need for stringent oversight and transparent procurement processes to safeguard public resources and ensure effective service delivery.
 

1. What did the NYC Comptroller’s audit reveal about the DocGo contract? The audit revealed significant mismanagement in the $432 million contract between the Department of Housing Preservation and Development (HPD) and DocGo. Key issues included unsupported payments, overbilling, inadequate service provision, and failure to properly vet subcontractors​.

2. How much of the DocGo payments were unsupported or unallowable? The audit found that 80% of payments to DocGo were either unsupported or not allowed by contract terms. This included over $4.7 million in unallowable expenses and $6.3 million in inadequately claimed costs​.

3. What were the major oversight failures by HPD regarding the DocGo contract? HPD failed to ensure that DocGo complied with contract terms, particularly in the vetting of subcontractors and maintaining required staffing levels. Many subcontractors were not reviewed or approved properly, and there were significant understaffing issues that led to inadequate support for asylum seekers​.

4. What health and safety violations were found in the housing provided by DocGo? The audit reported serious health and safety hazards in the housing provided by DocGo, including mold, pests, and inadequate living conditions. Many rooms lacked basic amenities like microwaves and refrigerators, and numerous asylum seekers were dissatisfied with the meals provided​ ​.

5. Why was the contract with DocGo awarded without competitive bidding? The contract was awarded as a no-bid emergency contract due to the urgent need to address the migrant crisis. This decision has been controversial, with concerns raised about the selection process and the appropriateness of DocGo as a service provider​​.

6. What are the political implications of the DocGo audit? The audit has highlighted political tensions between Comptroller Brad Lander and Mayor Eric Adams. The contract's awarding and subsequent audit coincide with Lander's mayoral candidacy, adding a political dimension to the findings. Adams has defended the contract, emphasizing the urgency of the migrant crisis​.

7. What recommendations did the Comptroller’s office make following the audit? The Comptroller's office recommended several corrective actions, including recouping unallowable expenses, obtaining proper documentation for inadequately claimed costs, and improving oversight mechanisms to prevent future issues​​.

8. How did DocGo respond to the audit's findings? DocGo defended its performance, highlighting its role in helping the city navigate the migrant crisis and providing services to 32,000 asylum seekers. The company acknowledged the challenging political environment but maintained confidence in the quality of its programs​.

9. What were some specific examples of overbilling found in the audit? Specific examples included payments for meals and vacant hotel rooms that were either unsupported or unnecessary. For instance, the city paid $971,967 for 259,961 meals, but the actual need based on the migrant population was significantly lower​​.

10. What impact did the audit findings have on the DocGo contract? As a result of the audit, the city decided not to renew the contract with DocGo beyond May 2024. However, a zero-dollar extension was granted to transition asylum seekers out of DocGo's care through December 2024​​.