Waste of the Day: NYC Paid $1.7 Million For Empty Hotel Rooms

Topline: New York City paid $1.7 million for nearly 10,000 nights at empty hotel rooms to maintain a “state of readiness” in case migrants eventually needed the rooms, according to a new NYC Comptroller’s Office audit.

New York City as a sanctuary city

Key facts: The city’s Department of Housing Preservation and Development (HPD) authorized the payment, even though its contract with healthcare distributors DocGo Inc. did not say it was allowed, auditors said.

DocGo’s contract — awarded through a no-bid process to give housing and support services to asylum seekers — allowed it to charge $170 per night for lodging, regardless of the actual hotel room price. This allowed DocGo to collect a $409,000 profit on the empty hotel rooms, auditors said.

It’s part of $4.7 million that auditors claim the city was overcharged. DocGo billed New York for extra security guards and social workers above the amount specified in their contract and for nearly 260,000 meals — which would amount to roughly five meals per day for each asylum seeker, the audit said.

Auditors asked city officials on Feb. 23 if they had given DocGo permission to hire extra security guards. They said they hadn’t — but on Feb. 24, the HPD chief of staff sent out a memo to “retroactively authorize” DocGo’s security guard spending from last year.

The audit claimed that another $6.3 million spent by the city should never have been paid because DocGo did not have invoices or other documentation to support the costs.

Money that should not have been paid

Overall, the audit said $11 million of the $13.8 million (80%) the city sent to DocGo in May and June 2023 should not have been paid. The city will not try and recoup the money, a spokesperson for DocGo told Bloomberg.

New York has spent another $168 million on the contract since then. Auditors speculated $134.5 million of that may have been spent improperly, assuming the 80% error rate remained.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Background: HPD officials are among the highest-paid employees in New York City.

Commissioner Adolfo Carrión Jr. earned $242,000 last year, and Chief Diversity Officer Ahmed Tigani earned $213,000, according to records at OpenTheBooks.com.

Supporting quote: Liz Garcia, a spokeswoman for Mayor Eric Adams, told Bloomberg that the audit “fails to acknowledge key facts that do not reinforce a predetermined, politically convenient narrative.”

She said Adams “put people’s wellbeing before paperwork” and that the city “will continue to pay our partners for the work they do on behalf of the city, particularly amidst a humanitarian crisis.”

Summary: Perhaps New York City taxpayers should be able to leave their money in their own bank accounts to have a “state of readiness” to spend it on their own families.

The #WasteOfTheDay is brought to you by CEO & founder, Adam Andrzejewski, with Jeremy Portnoy. Learn more at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.