City probes Jamaica shelter provider’s ‘truly problematic’ dealings
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Hillside Hotel in Jamaica is one of several hotels where Children’s Community Services operates shelter services. Photo via Google Maps.
By David Brand
A Jamaica-based social service provider with a $369 million contract to run family shelter services at more than two dozen commercial hotels is under investigation for what Mayor Bill de Blasio termed “truly problematic” financial dealings.
The Department of Homeless Services is set to ask a judge to put Children’s Community Services, which operates 28 different shelter locations, including 25 hotels, into receivership. The city is searching for a new agency to take over social services at the shelters, which primarily house families with children. The investigation follows a 2018 audit and various news reports raising questions about the company.
DHS reported potential problems with CCS to the city’s Department of Investigation, “which culminated with today’s action,” de Blasio said during an appearance on NY1 Monday night. NY1 was the first to report on the investigation.
“This is not a good situation,” de Blasio said. Investigators found something “truly problematic” during their probe of CCS, prompting the city to ask a judge to put the organization into receivership, he added.
The city first provided CCS with an action plan to correct some of its issues and continued to work with the organization during the probe, de Blasio said.
“While the investigation is ongoing you have ... to keep providing services to homeless folks,” de Blasio said.
Roughly 11,750 New Yorkers experiencing homelessness currently reside in hotel rooms that the city pays for because the traditional shelter system is too overloaded. Nearly 60,000 people — most of whom are families with children — stay in DHS shelters each night, according to daily census reports.
CCS filled a service void at the shelter hotels. Observers have questioned the company’s financial stability after it racked up significant debt shortly after its 2014 founding.Tax filings reported by the Daily News in 2018 showed that CCS listed debts totaling $6 million.
Despite the financial troubles, CCS obtained a massive city contract to operate services at commercial hotels. The city pays for thousands of rooms in 83 hotels across the city in order to meet a legal mandate to provide shelter services to anyone in need. Families with children make up more than two-thirds of occupants in the shelter-hotels, according to DHS population data.
“There are only so many organizations that provide homeless services and some do it better than others,” de Blasio said. “The investigation will tell us whether there were earlier warning signs.”
The person who answered the CCS phone number listed on the company website Monday night said she was “not at liberty to discuss” the investigation.
“I know my job title and it is not to discuss anything with anyone,” she said.
Another person who answered the phone Tuesday morning directed calls to the Department of Homeless Services.
DHS did not respond to multiple requests for comment Monday and Tuesday. A spokesperson for DOI declined to comment.
A person familiar with parts of the investigation told the Eagle that the initial complaint came from an internal whistleblower at the organization. NY1 also reported on the internal complaint.
The job search website Indeed.com lists several negative reviews of the organization by anonymous former employees who describe sketchy activity by CCS.
“This company is a complete scam,” wrote one former case manager. “They treat their employees like slaves, they continue to have shelter sites close down due to poor management. They break laws and I’m so glad I’m no longer there.”
A former assistant program manager wrote that “DHS made a major mistake with giving such a large contract to CCS.”
“The City should investigate the company too much incompetence; terrible COO and CEO,” the former employee wrote.
Queens Assemblymember Stacey Pheffer Amato introduced legislation last week that would compel New York City to clearly post shelter-hotel contract information on its municipal website. She called the investigation into CCS a “perfect coincidence.”
“But we’re not surprised,” she said. “It’s inevitable that something is going to happen because It’s about transparency. It’s not just hotel operators, but anyone that gets a contract.”
She praised whoever tipped the city off about the potential improprieties, and said making contract information more accessible would allow everyday citizens to probe financial dealings.
The average person “at home who looks for information can find discrepancies,” she said. “I want more transparency so we can start clicking and finding this information.”
