New York migrant service provider wasted millions: Audit
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NEW YORK (NEXSTAR) — New York City Comptroller Brad Lander audited the $432 million contract between DocGo and the Department of Housing Preservation and Development (HPD). In a scathing announcement on Tuesday, his office announced many problems with the department’s oversight of the company, which houses asylum seekers.
Aiming to help asylees who needed housing, HPD looped DocGo into the process in May 2023, despite its position as a medical service company. And as of June 2024, they’d paid DocGo nearly $182 million of the $432 million value of the contract.
Ultimately, Lander’s audit argued that the agreement was poorly managed. Its allegations include unlicensed contractors, overpayments, and subpar housing. Perhaps most galling of its findings, the audit accused DocGo of charging for and being paid nearly $1.7 million to rent empty hotel rooms.
In one example, DocGo rented nearly five thousand vacant rooms at the Armoni Hotel in Orangetown for 61 nights. This after the town got a restraining order from the Rockland County Supreme Court blocking the hotel’s use for asylee housing.
Though the hotel charged $100 per night per room, DocGo got $170 per room from the city. Pocketing the difference meant DocGo made $343,140 in profit off of a $490,200 bill—totaling $833,340 for empty rooms. According to the comptroller, DocGo also got reimbursed $21,820 for other services at hotels that had no asylum seekers.
“I am deeply concerned about the lack of oversight into HPD’s contracting for asylum seeker services revealed in Comptroller Lander’s audit,” said Brooklyn Assemblymember Phara Souffrant Forrest, Chair of the Assembly Task Force on New Americans. “Transparency and accountability are fundamental principles that must guide all government actions, especially when dealing with vulnerable populations such as those seeking refuge in our city. People come to New York seeking safety and a chance at a better life. It is our responsibility to ensure they receive safe shelters, reliable services, and quality support in a fair, efficient, and transparent manner.”
The audit inspected DocGo hotels in Albany, Amherst, Ardsley, Cheektowaga, Liberty, Newburgh, New York City, Orangetown, Poughkeepsie, Rochester, Schenectady, Syracuse, and White Plains. Of the rooms that actually housed asylees, inspectors identified 152 rooms at 23 hotels statewide with serious practical issues.
Auditors counted 21 rooms with health or safety hazards like black mold or excessive water damage. Thirty-three rooms had no cribs. They counted 122 without microwaves and 67 without refrigerators, making it almost impossible to keep food fresh or cook it. Plus, the audit charges DocGo with overcharging HPD for required daily meals.
“Auditors calculate that 44,879 extra meals were delivered for an excess payment of $129,983,” reads the audit. “Such excess reflects an incredible amount of food waste, which has been a widely reported problem for the City.”
According to Lander, HPD didn’t require DocGo’s compliance with the contract, nor proper bookkeeping of the costs of executing the contract’s terms. Millions paid to DocGo are now at issue, with the audit recommending the pursuit of refunds. For example, DocGo invoiced the department more nighttime caseworkers than the specific ratio outlined in the contract.
Check out the audit’s accounting of over $11 million in overpayments:
| Category | Amount |
|---|---|
| Hotel-generated documentation not provided as support | $3,926,660 |
| No time records to support claimed staff hours | $2,146,020 |
| Unauthorized security staff | $2,010,950 |
| Vacant hotel rooms | $1,678,580 |
| Unauthorized on-site medical services | $501,267 |
| Excessive food costs | $229,418 |
| Food invoices without indication of delivery location | $217,104 |
| Unauthorized caseworkers | $180,310 |
| Additional expenses not pre-approved timely | $92,016 |
| Sales tax inappropriately paid | $21,974 |
| Goods/Services for unoccupied hotels | $21,820 |
| Excess food delivered to Crossroads Hotel reportedly delivered to other hotels | $11,202 |
| Grand Total | $11,037,321 |
Furthermore—according to the audit—HPD didn’t verify whether DocGo’s subcontractors followed local laws covering professional licenses. They also didn’t authorize time sheets or approve additional expenses like the contract required. And HPD would also take DocGo’s word that they’d fixed problems without confirming.
“The recent audit from the New York City Comptroller highlights the urgent need for Mayor Adams to move away from an emergency response to the arrival of asylum seekers, to one that makes strategic investments in integration and infrastructure to ensure the success of our newest neighbors and all New Yorkers,” said Murad Awawdeh, the President and CEO of the New York Immigration Coalition. “By putting resources into legal services, language access, and permanent housing—instead of exorbitantly wasteful contracts for emergency shelters—we can give asylum seekers the tools they need to create self-sustaining and thriving lives in New York City. History has shown over and over again that when we invest in our people, our rate of return is exponential.”
The audit calls for better oversight in the form of unannounced inspections. vetting of subcontractors, and investigating invoices before paying them. Lander recommended withholding 15% of the total value of the contract from DocGo until reviews conclude and overpayments are repaid.
A request for comment sent to DocGo did not receive a response.
In August 2023, the New York State Attorney General’s Office announced an investigation into DocGo.
