Comptroller John Liu is calling on the city to drop Aguila Inc., a management company that serves over 1,400 indigent families and operates dozens of shelters in the Bronx and Manhattan. Liu is also urging the Department of Homeless Services (DHS) to better oversee its homeless shelter operators.

A new audit reveals a murky history with DHS and Aguila. In a November 2011 audit, Liu called on DHS to recoup $1.4 million from Aguila and look into another $9 million in bills to see if taxpayers were entitled to recover more. In light of recurring failures to account for millions of dollars spent, a new report was compiled. It shows that among other questionable practices, Aguila continues to place people in shelters that are unsafe or unclean.

Liu also demands that City Hall drop its lawsuit filed against the comptroller’s office after he rejected two municipal contracts to Aguila, which is run by Robert V. Hess, Mayor Michael Bloomberg’s former commissioner of homeless services.

“Despite their claims to the contrary, Aguila’s appalling record has not improved and DHS continues to turn a blind eye. At this point, DHS should just dump Aguila as a shelter operator, and City Hall should direct its resources toward fixing DHS rather than litigating against my office,” Liu said. “Continued dysfunction is a grave disservice to the homeless in need as well as communities whose concerns and input have been bypassed.”

Liu also added that the agency failed to investigate more than half of the total $10.4 million identified in an earlier audit. To date, DHS has recouped $558,412. The new audit shows that the agency continues to do business with Aguila without written agreements, which is in violation of the city charter. The comptroller had made 18 new recommendations and is querying the DHS for more transparency in the way they do business with homeless shelters.

Representatives from Aguila referred comments to the city. Samantha Levine, a spokeswoman from the mayor’s office, issued the following statement: “The city is, unfortunately, unable to comment on the specifics of the Aguila contracts since, as the controller knows, we are suing him,” Levine said. “But we would caution anyone against placing confidence in this controller when it comes to questions of numbers.”

Additionally, the audit also found that, as of June 2013, Aguila facilities owed the city $605,439 in unpaid water and sewer charges. In light of the multitude of problems, rather than reining in Aguila, DHS rewarded it instead. DHS payments for Aguilar-operated shelters surged from $46.3 million in fiscal year 2011 to $57.1 million in fiscal year 2013.