Is New York State Wasting Money on Private Contractors?

July 20, 2011 at 11:11 am

New York State Comptroller Thomas DiNapoli says the Port Authority can’t justify more than $1 billion the agency pays to outside contractors for services each year – and he’s setting his sights on similar contracts at 20 other agencies.

On Tuesday, New York State Comptroller Thomas DiNapoli released an audit of the Port Authority that claims the agency outsourced its security, janitorial and landscaping work to contractors for three decades. AP Photo/Mike Groll.

An audit he released yesterday, vigorously disputed by the Port Authority, claims the bi-state agency has outsourced its security, janitorial and landscaping work to contractors for three decades without assessing whether it really saves money.

“Part of it, I think, comes from a desire to keep headcount down, but what’s the cost?” DiNapoli said. “It begs the question, do you really have a parallel workforce?”

His auditors said they sampled 75 service contracts and agreements worth $13 billion, and found 57 of them worth $1.18 billion had no written justification on file.

The comptroller said his office is performing similar audits at 20 other agencies, looking for inefficiencies and indications of wasted money.

In doing so, DiNapoli is riding a wave of complaints first generated by New York City municipal unions like DC 37 about the high cost of city contracts, which labor leaders said could have been performed better at lower cost by city workers.

Those objections have picked up traction among city politicians after revelations of waste and fraud by some city contractors on delayed, over-budget projects like New York City’s new 911 center in the Bronx or the scandal-scarred CityTime payroll system.

City Comptroller John Liu’s auditors have cast a skeptical eye on some contracts that they contend are costing the city money, and his office has the power to reject contracts that are supported by Mayor Michael Bloomberg’s administration.

Now DiNapoli sees the potential for similar revelations among contracts issued by other city and state agencies as well as public authorities like the Port Authority, which is jointly controlled by New York and New Jersey.

Read the full post at the The Capitol.