After more than three years in operation, the city’s flagship welfare-to-work program for disabled people is still not helping anywhere near the number of people it’s intended to – possibly because the sizable contracts for delivery of services have not received adequate oversight, a recent review indicates.

An audit by the office of Comptroller William Thompson echoes criticisms heard last fall at a City Council oversight hearing, which preceded the renewal of the contracts in question, and earlier from antipoverty advocates about the perceived flaws of the WeCARE – Wellness, Comprehensive Assessment, Rehabilitation, and Employment – program, run by the city’s Human Resources Administration (HRA).

Implemented in 2005 to help mentally and physically disabled persons and substance abusers find work or receive federal disability benefits, WeCARE has since been criticized for its costs and failure to help needy clients with the depth and breadth intended. The initial price tag on the three-year FEGS and Arbor contracts was $201 million, with the goal of helping a total of 135,000 clients over three years. As of April 2007, eight months before the end of the contracts, only 24,600 clients, or 55 percent of the annual target, were engaged in the WeCARE program and just 15 percent of those clients had obtained jobs. The new FEGS and Arbor contracts were signed into effect in December 2007 and February of this year, respectively, and will cost the city $70 million annually.

The audit, released June 30 and surveying fiscal years 2007 and 2008, found that WeCARE’s oversight approach had a number of weaknesses, including lack of a formal monitoring process to verify accuracy of data submitted by its two contractors, Arbor Education and Training, and Federation Employment and Guidance Service (FEGS), making it possible for the two vendors to submit inaccurate data without HRA knowing. The audit also pointed to several deficiencies in HRA’s supervision over financial components in the WeCARE contracts.

The 14 recommendations in the comptroller’s audit – which was performed as part of a routine risk assessment – are aimed at correcting several of the weaknesses found, including advocating the creation of a central repository to house all contractor data, and standardization of prepayment reviews to ensure that WeCARE clients actually received the services contractors claim to have provided.

In the WeCARE system, Arbor and FEGS submit documentation to prove a client has performed major “milestones” such as completion of an initial medical assessment, obtaining employment, or successful receipt of federally funded disability benefits. WeCARE then disburses funds to the contractors based on the type and amount of milestones achieved. But the Comptroller’s audit found that documents were often submitted without HRA’s verification for data accuracy and that contractors could erroneously be paid twice for the same service.

While HRA generally agreed with 11 of the report’s 14 recommendations for improvement, the agency says it plans to act on just two, and evaluate two others. And despite auditor requests to HRA to reconsider, the agency maintains it is already “substantially performing” the remaining recommendations.

Dr. Frank Lipton, who supervises WeCARE as executive deputy commissioner of HRA’s Customized Assistance Services, said there were discrepancies between the audit’s findings and HRA’s actual performance because monitoring WeCARE involves many divisions of HRA. “It was difficult for the Comptroller’s staff to gain a full understanding of all operational details given the time constraints and broad scope of the audit,” Lipton wrote in an e-mail to City Limits. While comptroller staffers were “highly professional in their audit of HRA’s oversight of the WeCARE program,” he wrote that “some findings were based on a lack of a working knowledge of the program’s details and nuances.”

Frustrated advocates, however, say HRA’s response to the audit findings are reminiscent of its past reluctance to follow up on similar recommendations from previous reports and hearings.

“It seems like this is one more variant on the general theme, which is HRA has contracted out this program and it isn’t doing the kind of monitoring it needs to be doing,” said Cary LaCheen, a senior staff attorney at the National Center for Law and Economic Justice, who testified at a WeCARE hearing called by City Council’s General Welfare Committee last October. “The sense I got was not that HRA was going to make marked changes to their services. I don’t think they’ve made any commitment to do things differently than they have in the past.”

Councilman Bill de Blasio, the Brooklyn Democrat who chairs the Committee, also said the comptroller’s audit causes him to “worry anew” about the current status of the WeCARE program. In May, before deciding on the fiscal year 2009 budget, de Blasio says he was provided with statistics by HRA Commissioner Robert Doar that led him to believe the program had undergone substantial change since the October hearing, which fed his serious doubts about whether the Arbor and FEGS contracts should be renewed. De Blasio says he felt the comptroller’s audit was quite “objective” and that he now expects “real specific outcomes” that match recommendations in the report, and is prepared to call more hearings until he sees results.

“I give HRA credit for instituting WeCARE to begin with and I’m glad it exists. And I give Commissioner Doar credit for admitting to problems [in October 2007]. But the central critique – that the program is very expensive and not showing the outcomes we’d expect, and the vendors are taking advantage of a lucrative opportunity – those issues are not resolved,” he said.

The new FEGS contract will last until December 2010 and totals $113 million. Through an independent assessment review by Arbor’s parent company, ResCare, HRA discovered that Arbor had a number of performance problems and offered to renew its contract at $49 million for an abbreviated 18 months, with the option to renew for an additional 18 months, contingent upon its progress in implementing a quality improvement plan. Although the ResCare assessment was performed in June 2007 and the improvement plan finalized in October, the comptroller’s report says it found that as of this January, HRA still had yet to comply with two important recommendations: “developing standard operating procedures, [and] upgrading computer systems to better capture client information.” HRA says it continues to meet monthly with Arbor to implement the plan and that there has been substantial progress since January.

Paul Dunn, president of Arbor, echoed HRA’s sentiment that completion of the quality improvement plan was “on track,” and expressed satisfaction with HRA’s overall monitoring of and communication with Arbor, citing HRA’s unannounced visits to Arbor hospital and vocational rehabilitation sites several times a month and the daily presence of HRA staff in Arbor operations as evidence of the agency’s commitment to oversee its contractors. Dunn also said that since January, all recommendations from the quality improvement plan had been implemented and will be completed before the end of this year. “We’re working hard to make sure the contract is renewed for the additional 18 months and we’re optimistic that we will have earned the faith of the city by delivering its measurable terms,” he said. A representative from FEGS could not be reached for comment.

Alexa Kasdan, policy and research coordinator at the antipoverty advocacy group Community Voices Heard, co-authored a 2007 report that was also used in the comptroller’s audit. The organization’s report, like Thompson’s, found that implementation problems in the WeCARE system had stalled progress and prevented clients from receiving the support and services they needed. Kasdan says that while she has seen little change since the release of her report last year, that perhaps the problem lies not only with HRA’s monitoring strategies, but with the actual contracts themselves.

There is a “fundamental flaw in the umbrella contracts and in making the model of privatization even more complex” with several small subcontractors, she said. “There needs to be more accessibility and transparency.”

Kasdan says that it is difficult to expect large contractors like Arbor and FEGS to properly monitor their many subcontractors. Because they are not required to testify at hearings or submit public documentation, it is hard to hold contractors accountable – and even harder with subcontractors, she said. But until the contracts can be changed, Kasdan says the general public, not just advocates and public officials, must hold HRA and WeCARE accountable.

“There needs to be a more rigorous process with public input. WeCARE is spending public money. The public needs to see what’s going on,” she said.

– Kalyn Belsha