Comptroller Thompson's Blog by ComptrollerNYC
Jul 28, 2009 | 10133 views | 0 0 comments | 95 95 recommendations | email to a friend | print | permalink

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New Audit Finds Finance Department Not Doing its Job
by ComptrollerNYC
Oct 06, 2009 | 7127 views | 0 0 comments | 105 105 recommendations | email to a friend | print | permalink

 

The Department of Finance is costing New York City millions of dollars. It’s as simple as that. An audit by my office has found that the Department has failed to accurately calculate tax benefits under the Section 421(a) housing program, which provides tax exemption benefits to owners of residential real estate property who construct new multiple dwellings or convert, alter, or improve existing buildings for residential use.

The program was created in 1971 as a means of encouraging housing development in the City. In Fiscal Year 2009 alone, close to 38,000 properties did not have to pay approximately 600 million dollars in taxes because of the 421(a) program. The Department of Housing Preservation and Development is responsible for administering the program and issuing a certificate-of-eligibility to property owners who meet program requirements. The city’s Department of Finance then calculates the tax benefits granted under the program. My audit report clearly shows that the Finance Department routinely bungled its math and miscalculated the taxable assessed values of nearly 100 percent of the Manhattan properties we looked at that are currently receiving 421(a) tax exemption benefits.

If the Finance Department fails to rectify this problem, the City will not only lose revenue but face potential lawsuits in instances where properties have been overcharged. Under-billing could result in a loss of over $130 million for the duration of tax benefits for affected properties. Clearly, in these tough fiscal times, when every dollar counts, we cannot afford to shortchange ourselves of these vital resources.

First, the Department incorrectly calculated the taxable value of 48 of 50 properties we looked at using their own methodology. As a result, the City did not collect close to 10 million dollars in real estate taxes for 37 sampled properties. The Department could under-bill close to 116 million dollars in additional taxes in the years remaining for the exemption benefits.

For 11 properties, the Department collected excess taxes totaling more than $1.2 million. Second, more than 5 million dollars in additional real estate taxes were lost due to improper exemptions. In total, if the Department continues to under-bill and over-assess these properties, the City will lose nearly $130 million dollars in additional taxes throughout the remaining terms of the exemption benefits.

Additionally, we found that the Department has significant problems with regard to the administration of the 421(a) program, with poor record-keeping and procedures for calculating tax information going unwritten. To receive a tax exemption, a property owner must submit a certificate-of-eligibility to the Department. Information about a property’s tax status is contained in FAIRTAX, which is the Department’s computer system. In our audit, we discovered that certain program information recorded in FAIRTAX was inconsistent with the information manually-reported on property cards. As a result, we have reason to doubt the accuracy of FAIRTAX as a source for recording base-year assessed values.

This problem further highlights the Department’s inability to properly calculate and monitor taxable assessed values, exemptions, and taxes due the City. Unbelievably, seventy percent of the properties we looked at lacked certain required documentation, such as preliminary and final certificates-of-eligibility. Maintaining these documents in the appropriate files is necessary for the Department to substantiate that a property is eligible to obtain benefits under the program.

As a result of our findings, my staff scheduled a meeting with Department officials to resolve these discrepancies. However, the Department cancelled that meeting and at a subsequent audit exit conference continued to fail to explain what they believe happened with their calculations and why. Their refusal to provide substantive evidence to resolve these discrepancies is simply inexcusable. Going forward, the City must ensure that this program is administered correctly in order to minimize the fiscal impact of the Department’s mistakes.

 

As a result of our audit, my staff made 10 recommendations for review of assessed values, the recouping of real estate taxes, and the creation of formal written policies and procedures to calculate proper values and exemptions in the future. It is my hope that these recommendations will be followed to address the errors we found. Sadly, the errors we uncovered may be just the tip of the iceberg. Because this problem is so rampant among Manhattan properties, we must assume that it is a systemic problem that may ultimately result in the loss of hundreds of millions of dollars in real estate tax revenues citywide.

 

Such losses are not only unconscionable as we struggle to cope with an economic downturn that has deprived the city of critical revenue, but would be a grave disservice to the many New Yorkers who work hard to pay their taxes in these tough financial times.

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NYC Transit is Off Track
by ComptrollerNYC
Sep 23, 2009 | 7140 views | 0 0 comments | 111 111 recommendations | email to a friend | print | permalink

In the past week, I have addressed some serious concerns regarding our transit system.

 

I wrote Chairman Walder on Monday urging him to reverse his decision to eliminate station agents from 99 subway stations across the City, and today I released audit findings that show the MTA must do a better job of maintaining stations. 

 

NYC Transit spends close to $144 million dollars a year and has roughly 1,000 employees who are responsible for maintaining the stations – and that does not include Capital improvements.

 

Of the $144 million dollars, the City kicks in approximately $81 million.

 

Amazingly — despite all that money — we found that the agency has consistently failed to identify, report or fix many hazardous conditions located in the commuter areas of subway stations; failed to keep adequate and reliable records that document which repairs have been made; and failed to implement a modern computer system to track the problems or even the workers assigned to fix them.

 

 

After observing 50 randomly selected stations over the last year, my auditors found:

 

·         That about two-thirds of the hazardous defects they observed were not reported to maintenance shops for follow-up by supervisors who are supposed to regularly inspect their assigned stations and report problematic conditions;

 

·         That about 15 percent of the reported defects were not repaired after well over two months;

 

·         And of real concern, that NYC Transit’s database showed that some hazardous conditions had been listed as being fixed – but were actually not. 

 

All of this puts riders at risk. 

 

Some examples we found include:

 

·         Flaking paint, and loose and cracked concrete on the platform ceiling at the Q line at the Cortelyou Road station in Brooklyn. Conditions which — at the time of our review — had not even been reported as in need of repair.  Remarkably, NYC Transit’s rationale for not fixing the problem quickly is that they assume that the paint that is falling onto our heads contains lead. 

·         A hole on the elevated platform through which the street was visible at the Elder Avenue station in The Bronx,

·         dangerously uneven expansion plates on the platforms at the 111th Street station in Queens,

 

It’s unconscionable that commuters must be exposed to these unsafe conditions and potential hazards — for possibly many years — until NYC Transit decides to take action and make the necessary repairs.

 

I have made 16 recommendations to both protect the public and bring down the costs associated with maintenance and repairs.

 

The MTA and New York City Transit need to get back on track with a renewed commitment to keeping its riders safe – both at stations and by keeping station agents.

 

Riders deserve better.  

 

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DEP SOAKS NEW YORKERS WITH CROTON DELAYS
by ComptrollerNYC
Sep 03, 2009 | 7835 views | 0 0 comments | 105 105 recommendations | email to a friend | print | permalink

The construction of the Croton Water Treatment Plant is yet another example of a City project that has been subject to delays and ballooning costs. 

 

My office recently conducted two audits of The New York City Department of Environmental Protection’s management of the project.  One looked at the pace of construction, while the other examined the agency’s controls over costs.  What was uncovered was an embarrassment.

  

In 2003, the DEP told the public that the estimated cost of the Plant was roughly $992 million dollars.  Now, it’s expected that construction costs will exceed $2 billion.  That is more than double the original estimate.  And all of this involves your money – taxpayer dollars.

 

The DEP has hung the taxpayers out to dry on this one. 

 

We cannot tolerate the games the City is playing with our taxpayer dollars.  It is time to end the mismanagement surrounding the Croton Water Treatment Project.  My office issued a total of 16 recommendations to ensure that the Plant is completed in a reasonable time frame and at a reasonable cost.  These measures are necessary to protect the health of the people of New York, your hard earned dollars and the financial health of our City.

 

Read all about my findings at www.comptroller.nyc.gov

 

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Rest In Peace Eunice Kennedy Shriver
by ComptrollerNYC
Aug 12, 2009 | 6731 views | 0 0 comments | 117 117 recommendations | email to a friend | print | permalink

I join with millions of Americans in mourning the loss of Eunice Kennedy Shriver, a truly selfless individual who has left an indelible mark on this country. As the founder of the Special Olympics four decades ago, she forever changed the lives of countless individuals living with disabilities.

 

Through her tireless advocacy and encouragement, Eunice Kennedy Shriver showed that disabilities should not be a barrier to success and achievement. Her legacy will surely be one of hope and service.

 

 I offer my condolences to her family and friends and to all of those whose lives she enriched.

 

 

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ACCESS-A-RIDE STRANDING NEW YORKERS WITH DISABILITIES AT THE CURB
by ComptrollerNYC
Jul 28, 2009 | 6812 views | 0 0 comments | 110 110 recommendations | email to a friend | print | permalink

Nearly two decades ago, the landmark Americans with Disabilities Act was signed into law to protect and enhance the rights of people with disabilities. 

In the years that have passed, we have made great strides.  We see the symbols of this progress every day in the forms of accessible subway stations, assistive listening devices at movie and Broadway theaters and curb cuts on corners just to name a few.   

However, we all know that there is still a long way to go — that in recent years especially, the issues facing New Yorkers with mobility, sensory, cognitive and other types of disabilities have too often been overlooked and ignored. 

We must once and for all confront the policies and practices that create unacceptable barriers for members of the disability community as they interact with our built environment, our transportation system and our housing stock.   

Despite all of our efforts, the transportation system remains unreliable and too inaccessible. This is nothing short of an injustice because transportation is the lifeblood of this city, especially mass transit.   

Unfortunately, one program that serves as mass transit for people with disabilities is falling far short of its promise. No-shows and unanswered complaints are just some of the many criticisms that I have heard about the Access-A-Ride program over the years. 

My office undertook an audit to determine whether the Metropolitan Transportation Authority’s New York City Transit adequately monitored the Access-A-Ride vendors with which it contracted. My auditors found a number of procedures and practices which have contributed to the frustrations that the disability community has voiced for years.  

For example, we found that the MTA had no systematic method to evaluate how accurate its contractors were in classifying who was responsible for a no show — the contractor, the passenger or neither. Instead, the agency’s reviews of completed routes were sporadic, and there was no protocol for deciding how many or which routes to review, or what no-show trips on a route to further investigate. 

Moreover, we discovered that for vehicles without a GPS navigation system, the MTA cannot determine whether the contractor’s vehicle was at the right location at the right time. For those vehicles in our review that did have GPS, nearly one-quarter either did not have the system turned on or said it wasn’t working, making it difficult to corroborate the records for those vehicles as well.   

What we have here is a clear absence of accountability, one that significantly increases the risk of a contractor understating their no-shows to enhance their performance and receive incentive payments for which they are not entitled, or avoid penalties for which they are liable.   

Predictably, reviews of sample cases conducted by the MTA’s own analysts from January 2008 to February 2009 revealed that the majority of no-show classifications that had to be changed — an incredible 73 percent — were originally reported as customer no-shows.  Of those, nearly 75 percent were changed to contractor no-shows and 25 percent were changed to no-fault no-shows.   

Such carelessness on the part of Access-A-Ride vendors can have enormous consequences because if riders are wrongfully blamed for not showing up, it could possibly lead to an unfair service suspension, leaving eligible registrants unable to travel. 

Additionally, we found that there is virtually no evidence that the MTA takes any meaningful steps to discuss complaint patterns with individual carriers, or require corrective action plans from carriers to improve the quality of the service. This shows a stunning indifference to the challenges you face and it is simply unacceptable. 

NYCT must develop written guidelines to ensure that each carrier’s no-shows are reviewed on a continual basis and in a systematic and consistent manner, and the agency must ensure that contract managers utilize the complaint-tracking data to identify negative trends and ensure that the carriers take the steps necessary to correct the problem.   

It is time that those responsible for the Access-A-Ride program — the MTA and the City — recognize that the current design of the program contributes to the oversight and service quality problems identified in our audit.   

One solution? Reduce the reliance on Access-A-Ride vehicles by substituting rides in accessible taxicabs and livery service, which, per-ride, is at least two-thirds cheaper. These reduced costs would in turn benefit the City, which pays a portion of Access-A-Ride.  And passengers could get a ride when they need one rather than waiting 30 minutes or more — if the vehicle comes at all.  

As a member of the Taxis for All campaign steering committee, my office is working with advocates to pressure the Taxi and Limousine Commission to end its shameful disregard for people with disabilities. 

We recently wrote the Mayor, calling on him to require that all taxicabs are accessible to people with physical and sensory impairments, and that livery services provide meaningful access as required by law, as well. 

The reason we’re pushing him and the TLC so hard is because we know that accessible transportation is a fundamental requirement for living independently and taxis and livery service are important components of our City’s transportation system. However, the ultimate solution to lowering the cost of Access-A-Ride and improving the transportation experience for people with disabilities is to increase the accessibility of mass transit.   

While there will always be a group of people for whom Access-A-Ride or accessible taxis would be the only viable option, there are others who, if the right policies were put into place, could use mass transit.   

These policies include ensuring that elevators and escalators in subway stations are in service at all times, and that repairs are made quickly and thoroughly; that signs in subway stations and on trains are accurate and widely available to assist people with hearing impairments, and announcements are intelligible for people with vision impairments; and that every bus driver announces major stops, pulls the bus over to the curb for boarding and disembarking, and knows how to properly secure a wheelchair. 

Another key to make New York a more accessible city is to address the housing crisis. There are simply far too few accessible housing units in the city, and many of the units that are accessible are not affordable.  Private developers and the Department of Housing Preservation and Development should provide both accessible and affordable housing units for people with disabilities in New York City.  

We must create revolving low-interest/no-interest loan funds to help people make their homes accessible so that they can remain living independently in the community.  Once we have these accessible apartments and homes, we need a centralized, comprehensive, up-to-date database to help match people with the housing they need. And, finally, the City needs to support legislation to create parity between SCRIE and DRIE.   

Even if people with disabilities have a place to live and a way to get around, the absence of a job and a decent income leaves people, as one advocate put it, “… all dressed up with no place to go.”  And in today’s highly competitive world, our city cannot afford to overlook or waste anyone’s talents and abilities. 

It is simply unacceptable that as a group, people with disabilities are among the poorest in the nation. Mostly to blame are the powerful disincentives built into benefits programs like Medicaid, SSI, and SSD. These disincentives — combined with the low wages many employed individuals with disabilities receive — force many individuals with disabilities to choose to forego paid work, and have led to a chronically high unemployment rate of over 70%. 

Government officials must ask tough questions about how to help people with disabilities receive the education and work experience needed to obtain jobs to become economically self-sufficient. 

Together, we have a lot of work to do. Disability issues must be a high priority for City government. People with disabilities should serve in top level positions and as agency staffers. The disability community must be at the table when policies affecting them are designed and implemented. 

The agencies charged with protecting the rights of people with disabilities — such as the City Human Rights Commissions — should be given the resources and the encouragement to carry out their mission, and government and the private sector must forge effective partnerships to achieve these goals. 

Let us continue to move New York from a city of exclusion to a city of inclusion by remaking it into a place accessible for all.

 

 

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