An extensive report from the city’s Department of Investigation (DOI) has uncovered troubling practices among nonprofit shelter providers in New York City, including exorbitant executive salaries and nepotism. The findings raise serious concerns about the management of taxpayer resources allocated to support the city’s homeless population.
Key Takeaways
- High Executive Salaries: Several executives earn over $700,000 annually, with some exceeding $900,000.
- Nepotism Issues: Nonprofits have been found hiring family members without proper approval.
- Double-Dipping Practices: Executives are profiting from subcontractors linked to their organizations.
Overview of Findings
The DOI’s 94-page report scrutinized the finances of 51 of the city’s largest nonprofit shelter providers, revealing that all had at least one significant issue. The report highlights the need for better oversight to prevent corruption and misuse of funds.
DOI Commissioner Jocelyn E. Strauber emphasized the importance of protecting taxpayer resources, stating, "City-funded nonprofit service providers pose unique compliance and governance risks, and comprehensive City oversight is the best way to stop corruption, fraud, and waste before it starts."
Executive Compensation
The report indicates that current city regulations lack specific thresholds for what constitutes "reasonable" executive compensation. Notably, five nonprofits reported executive salaries exceeding $700,000, with two organizations—CAMBA Inc. and Acacia Network—reporting salaries of $750,000 and $935,391, respectively.
The DOI recommends that the city establish clear guidelines for executive pay to ensure accountability and transparency.
Nepotism Concerns
Despite city rules designed to prevent nepotism, the DOI found multiple instances where nonprofit executives hired family members without the required written permission. For example:
- Black Veterans for Social Justice: Initially claimed no family members were employed, but two adult children of the CEO were found to have worked there since 2007.
- South Bronx Overall Economic Development Corporation: At least five relatives of senior staff were hired without approval, leading to the termination of contracts with the organization.
Double-Dipping Practices
The report also uncovered instances of double-dipping, where executives collected additional income by hiring subcontractors in which they had a financial interest. Examples include:
- SEBCO Development Inc.: Hired a security company it owned, allowing executives to receive substantial salary payments funded through city contracts.
- Affiliated Companies: Four companies linked to the husband of a SEBCO executive were contracted for various services at city-funded shelters.
Conclusion
The DOI report sheds light on significant governance issues within New York City’s nonprofit shelter system, calling for immediate reforms to ensure that taxpayer dollars are used effectively and ethically. As the city grapples with a growing homeless population, the need for accountability in shelter management has never been more critical.
Sources
- Homeless Shelter Execs Make Huge Salaries and Hire Family Members, DOI Report Finds | THE CITY — NYC News, THE CITY – NYC News.
