NYC Comptroller Finds $6.8M Misspent for Superstorm Sandy Relief

New York misspent $6.8 million after Hurricane Sandy in payments to independent consultants for flawed and incomplete work that delayed help to at least 20,000 people with damaged homes, city Comptroller Scott Stringer said.

The Office of Housing Recovery Operations failed to properly monitor contractors in its Build It Back program from June 1, 2013, to Aug. 1, 2014, Stringer said, citing findings of an audit released Tuesday.

“New York City’s response to Sandy was a case study in dysfunction,” Stringer, a Democrat, said in a statement. “The city allowed consultants to run amok.”

Sandy, the biggest Atlantic storm in history, pounded New York in October 2012 with winds as strong as 100 miles (160 kilometers) an hour. The storm killed more than 40 people in the city’s five boroughs, left 10,000 homeless and flooded transit tunnels and underground utilities.

After the storm, the city hired Boston Consulting Group for $6.1 million to design a relief program. It then engaged Philadelphia-based Public Financial Management to provide oversight of San Francisco-based URS Group Inc. and Solix Inc. of Parsippany, New Jersey, which were to help homeowners navigate through the system of federal and state aid applications, according to the audit.

Confusion, Duplication

Duplicative paperwork, confusing referrals from one employee to another, inaccurate information and changed procedures plagued the process, Stringer’s audit found.

Most of the problems that Stringer’s audit cites surfaced during six public hearings his office held in areas of Queens, Brooklyn and Staten Island that were hit hardest by the storm. Many of the issues arose during the last months of the administration of Mayor Michael Bloomberg, an independent, Stringer said.

Bloomberg’s former spokesman, Stu Loeser, said the administration spent $650 million after the storm returning 20,000 families into damaged homes within four months, “a faster and larger rebuilding than after any disaster anywhere in the U.S.” Contractors who failed to do good work were fired, he said.

The former mayor is founder and majority owner of Bloomberg News parent Bloomberg News.

Stringer said that while operations improved after Mayor Bill de Blasio assumed office in 2014 as the first Democrat to run City Hall in 20 years, “remnants of the flawed system continue to frustrate applicants while increasing costs to taxpayers.”

Spokeswomen Alexandra Corriveau at Boston Consulting Group, Felicia Beach of Solix and Sandra Sosinski at PFM each had no immediate comment. URS spokesman Paul Dickard referred inquiries to City Hall.

Amy Spitalnick, a de Blasio spokeswoman, said the city has either adopted or is in the process of completing all of the audit’s recommendations.