Law Department Takes Over a Month to Review Hundreds of Contracts on Time & Need More Staffing Resources,...

Law Department Takes Over a Month to Review Hundreds of Contracts on Time & Need More Staffing Resources, Comptroller Audit Finds

New York, NY- In an audit of the contracting process, New York City Comptroller Brad Lander's office found that the NYC Law Department took more than four weeks to review nearly 40% of the Mayoral and non-Mayoral City's contracts above $100,000. The Law Department reviewed about $10 billion a year in contracting with nonprofits and private firms to run homeless shelters, senior centers, daycare programs, public infrastructure, IT equipment, and other vital public services.

"Timely contract reviews are essential for ensuring that agencies can provide services to the public without disruptions, vendors are paid on time, and the City can comply with all relevant legal mandates-but without streamlining procedures and more resources, there is a bottleneck in this process," said New York City Comptroller Brad Lander. "Agencies in the process cannot fall further and further behind because our service providers and the public who relies on these services deserve a path forward for timely and adequate contract approvals."

During the audit scope in 2023 and 2024, the Law Department typically reviews and approves contracts with values of more than $100,000, while delegating the authority to approve contracts valued at $100,000 or less to authorized Mayoral and non-Mayoral agency staff. From January 1, 2023through September 30, 2024, the Law Department reviewed 2,893 contracts.

Based on a review of 15 sampled contracts, while City agencies also contributed to or caused delays to a lesser extent, the Law Department caused the delays in contract reviews. For non-Mayoral and Mayoral contracts reviewed outside of PASSPort between January 1, 2024 and September 30, 2024, the Law Department took more than four weeks to review approximately 38% of them. Based on the audit team's review of 50 sampled Mayoral agency contracts processed through PASSPort from January 1, 2023 through October 23, 2024, the Law Department took more than four weeks to review and approve 16% of contracts.

Of the sampled contracts, the Law Department caused or contributed to delays in executing contracts for affordable housing regulatory agreements, voter education campaigns (including one aimed at raising participation within underrepresented communities), public safety communication equipment and security services, and information technology services to support operations and replace outdated infrastructure.

In the Comptroller's latest Annual Contracts Report, the percentage of contracts registered late (i.e. after the start date on which the vendor was expected to begin providing services) stubbornly remains at 80% in Fiscal Year (FY) 2024. These delays cause vendors to wait longer for payment and particularly hurt nonprofits, human service providers, and Minority and Women-owned Business Enterprises (M/WBEs).

Under the New York City Charter, the Comptroller's office has up to 30 days to review and approve contracts to ensure that appropriate funds exist for the City to pay the vendors, confirm that the City agency followed the procurement rules, and to verify that there was no corruption in the decision-making process. The Comptroller's office is currently the only City entity with a time limit proscribed by law in the City's procurement process.

The Law Department attributed delays to resource constraints, a Mayoral initiative to prioritize human services contracts, and lengthy contract negotiations. The audit makes five recommendations:

1. Record key milestones in Law Manager, LegalStratus, or otherwise track them.
2. Request that MOCS create canned aging reports and reports of closed contractsdetailing key milestone dates.
3. Use Law Manager, LegalStratus, and PASSPortto:
   1. Generate bi-weekly aging reports, monitor pending requests, and flag requests approaching or past expected timeframe for review; and
   2. Generate historical reports of closed requests to analyze and determine whether and to what extent contracts were not reviewed in a timely manner, identify the causes of the delays, and take appropriate corrective action, as necessary.
4. Assess staffing levels.
5. Continue to address issues with MOCSincluding, but not limited to, the PASSPort glitch related to the Law Department returning contracts and agencies resubmitting them, and reporting capabilities.

###