NYC Comptroller Lander Unveils Four Step Plan to Guard Against Corruption in City Government Contracting

NYC Comptroller Lander Unveils Four Step Plan to Guard Against Corruption in City Government Contracting

New York, NY- With questions swirling around abuse of municipal contracts, New York City Comptroller Lander laid out four steps to root out fraud, minimize corruption risks, and strengthen oversight in a new report, Prevent Corruption in Procurement.

"Public integrity is the linchpin of City government," said Comptroller Brad Lander. "New York City relies on contractors for many of our basic services - from childcare and home-delivered meals for seniors, to school construction and technology - so we must be able to count on City agencies to conduct fair and transparent bidding, without favoritism, and make sure we're getting what we pay for. But right now, we increasingly rely on no-bid contracts, and much of the time we don't even know which subcontractors we're paying. This is an urgent moment for change."

The report recommends that the City:

1. Strengthen oversight and accountability of subcontractors: While City procurement rules specify that each subcontractor must be approved by the contracting agency before starting the work, the reality is that those reviews, approvals and disclosures rarely happen. Across the three fiscal years since FY 2020, 17 agencies recorded no approved subcontractors in the City's Payee Information Portal (PIP), as required. This basic lack of transparency has created significant risks for corruption and nepotism.
2. Reduce over-reliance on emergency procurement and mitigate risks for corruption in non-competitive procurement: In emergency situations in particular, like a building collapse or rapid spread of Mpox, New Yorkers rely on the City to act as quickly as possible to avoid or mitigate an unforeseen circumstance. However, emergency procurements are exempt from certain transparency and accountability procedures that exist for other contracting methods, creating risks for corruption, fraud, and abuse. Similarly, non-competitive procurement processes, which are made available to provide agencies with the flexibility and streamlined processes they need to expedite high-priority projects and comply with M/WBE goals, come with less rigorous oversight measures creating risks for corruption, fraud, waste, and abuse.
3. Close corruption vulnerabilities in the City's oversight of not-for-profit human service contracts (per the 2021 Department of Investigation report): While the vast majority of human service nonprofits are dedicated to providing high-quality services and make best efforts to administer public funds responsibly, the 2021 Department of Investigation report revealed significant gaps in oversight that have increased corruption vulnerabilities. With over 40% of the City's contracting portfolio and $12 billion in public funds dedicated to not-for-profit human services, Comptroller Lander echoes his office's reform proposals that were made to the City in an October 2022 request to convene the City's Procurement Policy Board emphasizing that the City must close corruption vulnerabilities in this sector to protect public integrity and restore trust in the non-profit institutions.
4. Increase transparency to promote accountability, including the un-met promise of ContractStat: As a partner on the Joint Task Force to Get Nonprofits Paid on Time, Comptroller Lander recommended the development of ContractStat, a system of performance management to shed light on where delays are occurring and direct agency and oversight efforts to clear backlogs and delays. This administration's ongoing failure to meaningfully launch ContractStat and share information is extremely concerning. ContractStat alongside the additional disclosures of executive pay and recent history of campaign contributions would significantly strengthen transparency across all contract types to protect public integrity and prevent corruption and abuse.

Comptroller Lander continued, "New Yorkers deserve an honest, trustworthy, well-managed city government that safeguards our taxpayer dollars against waste, fraud, and abuse. We should use this moment of crisis to make real change - so people can wake up every day trusting that their government is working for them."

The City entered into 12,820 new procurement contracts in FY 2023, valued at $38.22 billion - more than budgets of 30 states-and the City should have robust procedures in place to ensure integrity, safeguard City resources, and prevent corruption.

Since 2022, Comptroller Lander has strengthened the Office's role in reviewing and approving City contracts, identifying systemic challenges and proposing common-sense reforms to protect public integrity, while balancing the need for efficiency and flexibility. Comptroller Lander helped create the Joint Task Force to Get Nonprofits Paid on Time, called out the overreliance on emergency procurements, audited service providerswho overly rely on undisclosed subcontracts, and promoted the increased transparency in contracting through dashboards and oversight tools.

Read the full report here: https://comptroller.nyc.gov/reports/preventing-corruption-in-procurement

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