New York City’s government paid troubled migrant shelter contractor DocGo almost $1.7 million for the equivalent of nearly 10,000 nights of unused hotel rooms in the first two months of its services contract, according to a new audit from the city comptroller’s office.
The city also overpaid DocGo for security guards – by more than $2 million – during the same period, during May and June 2023, according to the findings.
All told, more than a third of the city’s payments to the contractor in the first two months of the contract — $4.7 million of the $13.8 million spent was “unallowed” and should be recouped, according to city Comptroller Brad Lander. DocGo also failed to provide proper documentation for nearly half of the expenses in that period, totaling more than $6.3 million.
“It really is atrocious mismanagement,” Lander said in a morning press conference. “Their failure to review these invoices seriously just represents a real callous disregard for taxpayer dollars.”
The Adams administration replied that the city had long since addressed the oversight and accountability issues highlighted in the audit. Officials said that the city was responding to an unfolding emergency during the months referenced in the audit and needed to act quickly.
“As mothers needed baby formula and health care workers needed supplies, we put people’s wellbeing before paperwork,” Liz Garcia, a spokesperson for Mayor Eric Adams, said in a statement. “The comptroller can nitpick the first two months of an emergency contract more than a year after the fact and long after new safeguards were put in place, but he cannot claim to have saved a single migrant family from sleeping on the streets.”
The audit findings continue a steady drumbeat of criticism from Lander over the Adams administration’s fiscal management of the migrant crisis. New York City has accommodated some 210,000 migrants during an influx that began in 2022 and more than 64,500 are currently in city shelters. The report also comes a week after Lander, a progressive to the left of Adams, announced he would challenge Adams for the Democratic Party’s nomination for mayor in 2025.
The findings also add to the litany of questions surrounding DocGo, the medical services company the city hired last year in a $432 million no-bid contract to operate migrant shelters. The company’s contract expired for local shelters in May and will end for upstate sites in December.
The report unearthed health and safety issues with some hotel rooms and a lack of caseworkers and supervisors on site. The “real-time” audit was launched in September, in contrast to the usual auditing process, which occurs after a contract ends.
Lander has a series of reports denouncing the administration’s handling of the crisis, including its overspending on no-bid contracts as well as the shelter limits it instituted for migrants.
“It was a big mistake to hire DocGo, and everybody knew it at the time and they did it anyway,” Lander said at a press conference on Tuesday, adding that the city had enough time to release a competitive application.
As of June 12, the Department of Housing Preservation and Development has paid DocGo $181.9 million for services provided under their contract, according to the comptroller’s office.
Garcia, the mayoral spokesperson, said the city has taken “swift, decisive action” to house an influx of newly arrived migrants “at the height of an unprecedented international humanitarian crisis.”
She added that HPD, which is overseeing DocGo’s contract, has already amended its contracting process, including by hiring more staff and using an internal auditor to review invoices.
Lander disputed that the city had put adequate “safeguards” in place and pointed to the review timeframe of just one to four days for the most recently paid invoices for the contract, which he said was too short.
“There’s no way that they had adequate time in that amount of time to carefully scrutinize those invoices,” Lander said. “So there’s just no evidence that new safeguards were put in place.”
Thomas Meara, a DocGo spokesperson, said in a statement that “DocGo is proud” of its work to house, feed and serve 32,000 migrants through its work with HPD.
“We have received assurances from HPD that we will be paid for our work providing contracted services to meet the needs of this vulnerable population,” Meara said in a statement.
“We stand by the quality of our program,” he added.
The comptroller’s audit also found there were nearly 2,500 hours where there was no supervisor present on-site at 14 hotels operated by DocGo. And 80% of the 189 hotel rooms auditors visited had at least one “deficiency,” while a small number had serious health and safety hazards, such as mold and water damage.
In a survey of more than 250 migrant residents at DocGo-run hotels, 74 noted roaches, bedbugs, rats and ants in their rooms. And 80% of those surveyed said they’d never met with a caseworker to discuss work permits, jobs, housing and medical appointments — despite promises for such services from the administration.
In August 2023, New York Attorney General Letitia James opened an investigation into allegations that DocGo mistreated migrants in its care, following a New York Times report. A New York Department of State investigation found more than 50 security guards hired by DocGo’s subcontractors lacked proper authorization.
The company’s CEO Anthony Capone also resigned last year following a report by the Albany Times Union that he falsified his qualifications.