New York City Department of Housing Preservation and Development
Neighborhood Homes Program Compliance with Requirements In the Neighborhood Homes Program, which is administered by the New York City Department of Housing Preservation and Development, not-for-profit housing development companies are to rehabilitate residential buildings that have been repossessed by the City and sell the buildings to owner-occupants. The companies are generally required to remit to the Department a certain portion of any profits from the sales. However, we found the Department had received less than 25 percent of its share of about $1 million in profits owed by four companies. The companies indicated they did not remit the required profits because of cost overruns and taxes owed for buildings under rehabilitation. However, we saw no evidence the terms of their agreements with the Department were modified to reflect the forgiveness of this major obligation and Department officials acknowledged they had not done any audits to verify the companies' reasons for retaining the profits.
We also found an overall lack of Department control over the accounting for, collection, and deposit of profits owed by companies, and are concerned that this lack of control results in a significant risk that other companies may owe profits to the Department. We recommend the Department recover profits owed and institute adequate controls over the collection of this revenue.
For a complete copy of Report 2006-N-13 click here.
For a copy of the 90-day response click here.
For a copy of the associated follow-up report click here.