NYC shelter operators make big money due to poor oversight, DOI says

NEW YORK -- Nepotism, lack of competitive bidding and exorbitant salaries are inflating New York City's cost to shelter asylum seekers and the homeless, according city investigators.

The Department of Investigation looked into the financial practices at 51 shelters and found some executives were really raking in the dough.

"Eye-popping numbers"

Mayor Eric Adams' $258,000 salary to run the city is peanuts compared to what some shelter operators make for taking care of asylum seekers and the homeless, the investigation found.

The city is not getting the best bang for the buck at some shelters, according to the DOI report, which found:

• The chief executive of a provider called Core received more than $1 million in one year.
• The president and chief executive officer of Acacia Network Housing got over $916,000 in 2021.
• The president and CEO of shelter provider Camba received over $700,000 during multiple years.

"Those are certainly some eye-popping numbers," Department of Investigation Commissioner Jocelyn Strauber said. "I think the problem here is that, although the city requires that any salary, any executive compensation be reasonable, there's no other limitation or restriction and reasonableness is a pretty expansive concept."

Report found nepotism and conflicts of interest

The report is part two of a probe that started in 2021, when Bill de Blasio was mayor, and found a number of other troubling practices affecting the bottom line, like:

• Nepotism; hiring relatives, immediate family members and the children of shelter executives.
• Conflicts of interest, like a shelter executive who was also employed by a security company hired by the shelter.
• Failure to follow competitive bidding practices; DOI found multiple examples of shelter operators awarding multi-million dollar maintenance contracts to companies affiliated with the buildings' landlords.

Since city budget officials expect to spend over $10 billion on sheltering the unhoused over the next three years, DOI officials say their recommended reforms could add up to big savings.

"That is certainly the hope, right. These are all reforms that are intended to reduce, significantly reduce the risk of corruption, fraud and waste," Strauber said.

A spokesperson for the city Department of Social Services told CBS News New York that the agency takes "every instance of noncompliance very seriously" and has stopped doing business with some of the providers in the DOI report.