An audit released today by State Comptroller Thomas P. DiNapoli of New York City's largest housing voucher program found that weak oversight and administrative lapses are contributing to rising costs and placing some vulnerable families in unsafe housing. The program, known as the City Fighting Homelessness and Eviction Prevention Supplement (CityFHEPS) is overseen by the New York City Department of Social Services (DSS), and it is designed to help low-income New Yorkers avoid homelessness. It's projected to cost the city $1.2 billion in city Fiscal Year (FY) 2025, up from $176 million in 2019.

"Stronger oversight of the CityFHEPS program is critical to helping individuals and families access safe housing and stay in their communities," DiNapoli said. "Improving how the program operates will better protect tenants and taxpayer dollars."

Oversight of Homebase Providers

DSS contracts with seven nonprofit homebase providers to help those at risk of homelessness avoid entering shelters and apply for rent subsidies, enabling them to remain in the community. Auditors reviewed 75 CityFHEPS cases from a pool of approximately 8,000 from January 2022 to May 2024 and examined $671 million in contracts across the seven providers.

Key audit findings included:

• Unsafe Apartments: Families were placed in apartments with serious housing-code violations, including mold, infestations and missing window guards. In some cases, DSS failed to conduct required safety checks, known as pre-clearance inspections, before move-in, including an instance where a family was placed into a unit that had just been vacated by another tenant for habitability issues that had not been fixed. The audit also found landlords who continued to receive rent payments for uninhabitable apartments, increasing costs and forcing families to relocate.
• Missing Documentation: Nearly half of the case files reviewed were missing required proof of income or eligibility, undermining the integrity of the program's qualification process.
• Weak Landlord Oversight: DSS has not implemented a system to disqualify landlords with repeated building code violations or poor performance. The audit found landlords in the program on the city's Public Advocate's Worst Landlord Watchlist who continued to receive rent payments through the program.
• Improper Payments: DSS paid broker's fees in direct violation of program rules, in one case $6,800 to a company affiliated with the landlord. Broker fees are permitted only when the broker is an independent party, not the landlord or anyone affiliated with the landlord. In multiple cases, DSS approved rents above market rates by an average of $525 per month without documentation of required rent-reasonableness assessments.

DiNapoli's audit recommends DSS:

• Strengthen oversight of Homebase providers to ensure required documentation is complete and accurate.
• Expand pre-clearance inspections for all apartments before approving subsidies.
• Create a landlord disqualification list to bar participation by building owners with unresolved safety or habitability issues.
• Verify household income for all adults and ensure rent payments are reported correctly.
• Improve data tracking so all cases and services are fully documented.

DSS said it has updated its case management systems to better track cases and plans to launch new teams focused on monitoring landlords and improving oversight of housing safety and conditions by mid-2026.

This audit builds on DiNapoli's October 2024 audit of CityFHEPS, which found systemic weaknesses in data reliability and rent payment oversight. Together, these audits highlight the need for stronger management and accountability to make housing assistance more efficient and to ensure it reaches New Yorkers who need it most.

Audit
Administration of the CityFHEPS Program for Department of Social Services Homebase Clients

Related Work
New York City Department of Social Services: Administration of the CityFHEPS Program for the Department of Homeless Services Shelter Residents