Suffolk County has replaced homeless shelter provider Project ReDirect Inc. after comptroller audits found the Babylon-based non-profit had overcharged the county by nearly $1.3 million.
The organization, which at its high point ran a 14 individual and family county shelters bringing in $5 million a year, has decided not to pursue renewal of its expiring contract and ended shelter work for the county as of July 31. The other shelter operators have taken over housing 89 homeless at the same sites. The comptroller’s office also said they expect to recover most of the funds by withholding still pending payments to the agency.
Project ReDirect is the second major homeless provider that the county has had to replace in a little more than a year. In March, 2016, the Department of Social Services removed Long Island Women’s Empowerment Network from running the county’s largest shelter in a former Brentwood hotel for 300 adults and children after another audit found it owed the county more than $3 million.
“It’s disturbingly predictable,” said Comptroller John M. Kennedy. “Every homeless audit since I took office in 2015 has had problems — everything from an inability to read to massive fraud.” He added Suffolk needs to overhaul its shelter system: “The homeless model is unworkable as it exists.”
Vincent Berger, the non-profit’s attorney, said the Project ReDirect was started 17 years ago by Mildred Floyd, wife of Suffolk’s first black state Supreme Court judge, to aid the homeless. The audit problems arose later under managers who were changed two years ago, Berger added. The current executive director, Victor Seltzer, he added “did everything he could to salvage the organization, but it didn’t work and it was dissolved.”
Traci Barnes, Social Services spokeswoman, said the group changed managers after the original audit and new staff was “successful in running shelters,” and many were retained by the five non-profits that have taken over.
The comptroller’s latest review, issued last month, said the agency received $439,000 in overpayments for the year ending June 30, 2010. That limited-scope audit came after an earlier 2015 comptroller review, which found $860,000 in overpayments for the year ending June 30, 2009.
In the new audit, the comptroller office disallowed agency claims for $140,378 in salary and fringe benefits, for among other things, failing to submit to Social Services officials the names of four workers so they could be screened for criminal record. Auditors say one was a level two sex offender.
Auditors also disallowed $23,269 because the agency hired as its controller an individual whose resume did not meet job qualifications because his only experience was that of a graphic designer. Auditors also determined the individual did not live in New York State during the period of the audit and was president of an active business in Louisiana.
The audit also determined the non-profit improperly overcharged $153,089 for building expenses which involved “less than arm’s length or inappropriate transactions.” In one case, Project Redirect improperly charged $101,053 for security expenses from an independent consultant, who turned out to be an employee of the agency.