Nearly $7 million sent to homeless housing providers was misspent, according to an audit by Suffolk Comptroller John Kennedy, who is looking to claw back the funds.
Going over the books from 2016-2018, Kennedy attributed the losses to financial mismanagement among emergency shelter providers. Instead of supporting homeless services, county payments were diverted toward excessive salaries, improper expenditures, and other violations of contractual agreements, the Comptroller reported.
"The findings are more than troubling. They are absolutely, outright, totally unacceptable," Kennedy said alongside County Executive Ed Romaine at a Hauppauge press conference. He detailed $6.85 million in misappropriated funds, money that represents about 6.37% of the $107.5 million in program revenue received by 14 different contractors during the audit period.
According to Kennedy, the county has reclaimed about $3 million of the lost funds under repayment agreements with the nonprofit providers and through withholding of payments by the Department of Social Services, which runs the homeless shelter program.
Romaine, who took over from former Suffolk Executive Steve Bellone last year, said the county has strengthened oversight of the program to prevent future mismanagement. "This money should be spent on what it was intended for—providing shelter and support for those in need," Romaine said.
“The audits revealed numerous inaccurate and non-program related costs, personal costs, and excessive less-than-arm’s-length costs, as well as ineffective program monitoring and oversight,” Kennedy noted. For example, he found that $1.7 million in raises for homeless shelter employees were categorized as capital improvements. "There’s a difference between an innocent mistake and an active attempt to conceal and misappropriate,” Kennedy said. “More often than not, that’s what we found." As are all of the Comptroller audits, the findings were forwarded to the district attorney.
“While some of the emergency shelter providers expend public funds justly and in accordance with governing contracts, laws, rules, and regulations, many have found ways to abuse the system by diverting emergency housing funding from its intended use,” Kennedy concluded. “As a result, this vulnerable segment of the population is not sufficiently receiving the vital services that it needs, and the taxpayers are paying more for the services than they should.”