Build It Back Bungle

Posted on April 2, 2015 by Katie McFadden in News // 0 Comments

It’s no news that Build it Back screwed up. Almost anyone who tried to go through the process in its early days will tell you his or her nightmare ordeal with the program. On Tuesday, March 31, City Comptroller Scott Stringer came to Arverne to provide some answers to why the organization that was set up to help Sandy victims, failed so many.

Stringer stood with members of various community civic groups, and gave residents the answers they’ve been waiting for as the result of a Build it Back audit. “New York City’s response to Sandy was a case study in dysfunction,” Stringer said. Residents who applied for the program told their tales of added hardship after the storm, with having to fill out large packages of paperwork, multiple times, and sometimes being told it was lost. During the audit, Stringer met with Sandy-impacted residents on six different occasions in different parts of the city. “I will never forget the rage of residents who came to our hearings with bags full of documents which they had been forced to submit several times,” Stringer said.

The audit, which focused on a period from July 1, 2013 to August 1, 2014, revealed that the City’s Office of Housing Recovery Operations (HRO) failed to properly monitor contractors that handled the application process, and paid them $6.8 million for work that was flawed or incomplete, leading to delays in relief to the more than 20,000 people who originally applied to Build it Back.

Why were there so many delays? The subcontractors handling the paperwork had no incentive to get it done in a timely manner, or to even get it done right. They were paid regardless. Following the storm, HRO contracted Public Financial Management, a “firm that had no prior experience with disaster recovery, to be primary contractor and oversee subcontractors,” Stringer said. Among the subcontractors were URS Group, which was suppose to “provide on the ground service to storm victims, ensuring they had all the information necessary to complete applications for benefits,” and Solix Inc, which was “responsible for reviewing these applications and determining if the applicants were eligible for benefits,” Stringer explained.

The City made the mistake of paying these subcontractors before the work was done properly. The audit revealed that between July and December 2013, URS sent 9,126 applications to Solix, of which 5,432 or 59 percent were incomplete. URS and Solix were paid $3.3 million for submitting and reviewing 4,409 incomplete applications. HRO paid URS another $3.5 million for conducting 14,095 initial application meetings, without requiring the company to prove that it followed its contractual obligations. “Many of the cases bounced back and forth between the two subcontractors and applications languished,” Stringer said. “There was no motivation to clean this up because every step of the way, the contractors were getting paid no matter what happened, so there was no check on the contractors and there was no standard by which you get paid.”

The audit also revealed double billing by consultants and payments for undocumented costs. “We found double billing that was inexcusable. HRO paid PFM almost a quarter of a million dollars for services which they had already been reimbursed for. HRO paid subcontractors $1.2 million for hours that could not be supported by hourly reports and $74,000 of which was paid for travel expenses that had not documentation. We had no idea where they were going or what they were traveling for,” Stringer revealed.

The audit also shows that the employees being paid were unqualified. URS was supposed to hire Housing Recovery Specialists who had two years of experience in case management or similar work and a bachelors degree in social work or a related field. Out of 154 resumes that were reviewed, none had a degree in social work and only 29 percent had any sort of bachelor’s degree. “In a survey, 43 percent of storm victims said employees couldn’t give them basic information about how the program operated, including how to seek benefits or the information needed to complete applications,” Stringer said. “The recovery effort was a field day for contractors making money. It was a nightmare for victims.” The audit also showed that more than 100 changes were made to the program over 11 months, which led to even more delays and confusion.

After revealing the findings, Stringer said, “most unbelievably, the same contractors who bungled the job so badly are still on the job today and are still unaccountable to the public.” PFM was terminated by the city in December 2013, but three contractors, including URS and Solix, are still working for Build it Back. “These subcontractors don’t have direct contracts with the city. Without registered contracts in place, the city has limited leverage over these firms, meaning applicants remain vulnerable to failures and the City’s potential liability has increased,” Stringer said.

Despite the surprising news that URS and Solix continue to work with Build it Back, Stringer said the program has made improvements under the new administration. The audit showed that applications are being processed faster and progress is being made, but the program is still not at a level that it should be, more than two years after Sandy. “We shouldn’t be celebrating where we are at this point. So few homes have been built. There’s so much more to do. We estimate thousands of people have been lost to this process. They’ve actually pulled out of any kind of rebuild. That is something that strikes at the heart of what went wrong here,” Stringer said.

In response to its findings, the comptroller’s office made several recommendations to HRO and the Mayor’s office. “The single most important is that HRO cannot delegate responsibility for running the Build it Back program to private companies,” Stringer said. Other recommendations including dedicating sufficient staff to contract management and invoice appraisals, ensuring the accuracy of data in the Case Management System, registering valid contracts for subcontractors, reviewing invoices to ensure duplicate payments are not made and more. “What happened with Build it Back was a disgrace and the message we’re sending today is that is must not happen again,” Stringer said.

Arverne resident Darrell Mitchell spoke of his ordeal with Build it Back and expressed his hope that the audit will lead to some changes in the program. “We’ve had quite a turbulent time with Build it Back. If this day can produce even one solution for a resident or even 10, that would be great. Our fear is that after today, it will all disappear again, but with the comptroller’s office, we already feel a little resolve because we had no idea what was going on with Build it Back.”

Mayor’s office spokesperson, Amy Spitalnick said the changes have already been made. She responded to the audit, calling it skewed, since much of it focused on the first seven months of the program, before the de Blasio administration overhauled Build it Back in April 2014.

“This audit simply reiterates what the administration already outlined in its Build it Back report nearly one year ago – and every recommendation is already implemented or being implemented as part of the Mayor’s overhaul,” Spitalnick said. “Last year, the City took over direct management of all Build it Back case management, while renegotiating contracts to secure significant savings that were put back into relief efforts. To be clear – no vendor has received payments in excess of the total amount they are owed to date. As a result of Mayor de Blasio’s overhaul, thousands of homeowners who had previously been stalled in intake have now seen direct relief.”