One of the largest suppliers in the city, Acacia Network, was discovered in 2019 for directing millions of dollars to a security company linked to senior nonprofits and is under a corrective action plan for its financial tangles, the records show. The city said the matter was referred to investigators, but the group continues to receive millions in municipal funding.
Another shelter provider, Childrens Community Services, was first investigated in 2017, when the city noticed irregularities and installed a tax monitor to oversee its operations, the records show. But the city continued to provide money to the group until last year, when, in a lawsuit, it accused the provider of fraud, bid rigging and other financial offenses. The group is expected to lose its remaining contracts later this year and is under criminal investigation.
The city first warned the Bronx Parent Housing Network in 2017 that Rivera had a troubled conflict: he ran a for-profit housing company alongside his non-profit organization. Later that year, a whistleblower from the Bronx Parent Housing Network informed city officials that his nepotism and financial complications continued.
In response, the Department of Social Services placed the group on a special watch list, called a corrective action plan, which should ensure compliance with the rules. But the Times investigation found that Rivera continued to circumvent orders to benefit himself and his associates.
The Department of Social Services defended its track record of providing shelter providers for homeless people. A department spokesman said he ended his relationship with three providers after discovering the illegality.
In New York, a city with some of the highest real estate values in the country, officials say there are a limited number of nonprofits willing and able to manage shelters.
“When a problem is identified that a provider must address, we use all the tools at our disposal, including corrective action plans, to ensure compliance, since we have a legal and moral obligation to provide shelter to all who need it, not matter what, ”Isaac McGinn, a spokesman for the Department of Social Services, said last week. “Our first objective, therefore, is to solve problems collaboratively.”