Objective

To determine if the Office of Temporary Disability Assistance (Office) adequately monitors and appropriately reimburses claims for homeless shelter providers, such as Rescue Mission Alliance of Syracuse. The audit covered the period January 2020 through December 2020.

About the Program

Homeless shelters across the State provide an array of services to families and adults, including assessment and case management, access to health care and child care services, and assistance with finding permanent housing. Local departments of social services (Local Districts) either operate shelters directly or contract with providers to operate them. Toward this end, the Office oversees a network of 612 transitional homeless shelters (as of December 31, 2021) across the State.

According to the U.S. Department of Housing and Urban Development point-in-time count for New York State, for a specific day in January, homeless individuals numbered 92,091 for 2019, 91,271 for 2020, and 76,051 for 2021 (due to the pandemic, the count for 2021 does not include unsheltered individuals).

The Office’s funding of shelter services is administered through the Local Districts, comprising the New York City Department of Homeless Services and 57 county offices throughout the rest of the State. For calendar year (CY) 2020, Local Districts submitted $2.1 billion in gross claims, with claims of $1.6 billion for CY 2017, $2 billion for CY 2018, and $1.9 billion for CY 2019.

The Onondaga County Department of Social Services (OCDSS) has contracted with Rescue Mission Alliance of Syracuse (Rescue Mission) to provide homeless services. Rescue Mission, a not-for-profit organization, is one of the largest providers of homeless services in Onondaga County. In addition to its 183-bed emergency shelter services, Rescue Mission provides education, vocational training, and life skills training, such as money management, to help its clients transition out of homelessness. In 2020, Rescue Mission served nearly 1,100 adults.

For CY 2020, the Office-approved budget for operating Rescue Mission was $2,890,281, while Rescue Mission’s actual expenditures reported provided by OCDSS to the Office totaled $2,906,667. Pursuant to its contract for CY 2020, OCDSS will reimburse Rescue Mission approximately 61% of costs incurred, or $1,775,000.

To guide our assessment of reimbursed expenses, we used the Office-issued Administrative Directive for fiscal budgeting of shelter operations as well as the Office’s Fiscal Reference Manual, New York State regulations, and the contract, which together provide guidance on costs eligible for reimbursement.

Key Findings

• The Office’s oversight processes focus only on the review and approval of shelter budgets. As the Office itself acknowledged, it does not take any action thereafter to ensure that shelters’ actual costs claimed for reimbursement, as submitted by the Local Districts, comply with the approved budget or, for that matter, with State laws and regulations or the Office’s own policies, as required.
• The Office leaves it to Local Districts to perform monitoring, yet the Office does not provide Local Districts with the guidance needed to effectively identify non-allowable and unsupported expenses and prevent improper reimbursements.
• For CY 2020, we identified $26,123 in costs claimed by Rescue Mission that were improperly reimbursed. The ineligible costs include $22,277 in personal services and associated fringe benefits for the one month we audited (December 2020) and $3,846 in other than personal service (OTPS) expenses.

Key Recommendations

• Review and recover, as appropriate, the $22,277 in personal service costs and $3,846 in OTPS costs improperly reimbursed to Rescue Mission.
• Establish a system of monitoring controls to improve oversight of Local Districts’ reimbursement to providers to ensure that expenses are allowable, allocable, reasonable, and consistent with approved budgeted costs and the contract.
• Ensure that the OCDSS is appropriately approving reimbursed expenses submitted by providers.
• Issue guidance and provide support to Local Districts on reimbursable shelter costs to ensure costs are allowable, allocated appropriately, and compliant with relevant regulations and guidelines.