According to a recent audit by City Comptroller Scott Stringer’s office, minority- and women-owned business enterprises aren’t getting their fair share of contract opportunities in the Department of Housing Preservation.

The audit indicates that HPD failed to keep track of all of its contracts and subcontracts awarded to M/WBEs, which is not in line with citywide efforts to ensure that its spending is done fairly

“When city agencies don’t track whether the money they spend on M/WBEs actually goes to those vendors, it opens the door to potentially fraudulent activity,” Stringer said. “The M/WBE program is essential to ensuring that all businesses have an equal chance to compete for city contracts, but HPD’s failure to adequately track and report contracts puts that opportunity at risk.”

Auditors examined HPD contracts for fiscal years 2014 and 2015. In 2013, Local Law 1 modified the city’s M/WBE program, which the comptroller says HPD failed to comply with.

“This audit makes clear that we still have work to do before we can be sure that city agencies are truly following through with expanding opportunity for MWBEs,” Stringer said. “There needs to be a paradigm shift so that agencies hold their prime contractors responsible for their work with subcontractors.”

Failures include HPD not tracking or maintaining a centralized list of all contracts and subcontracts subject to Local Law 1 that were awarded to M/WBEs, not recording all required contract information in the city’s Financial Management System for contracts subject to Local Law 1 and not presenting evidence that it effectively monitored prime contractors’ use of M/WBEs as subcontractors.

“The goals of Local Law 1 are laudable, but if we want to ensure that everyone has a fair and fighting chance to make it in this city, agencies need to be doing more,” said Stringer.

Although HPD received an “A” in the comptroller’s “2015 Making the Grade” report, the grade was based exclusively on self-reported agency spending on M/WBEs and did not examine HPD’s compliance with reporting and monitoring requirements outlined in Local Law 1.

The comptroller’s report also noted that HPD did not use the Payee Information Portal to ensure that prime contractors uploaded subcontractor information, making it impossible to hold the agency accountable for its M/WBE utilization reporting.

In response to the audit, a spokesperson for HPD said the agency is in compliance with the requirements of Local Law 1 and that HPD awarded $16 billion in M/WBE contracts over 10 years.

HPD disagrees with the findings of the audit and said the agency has an established Local Law 1 program. HPD added that it uses several ways disseminate relevant M/WBE information, including periodic meetings with personnel and trainings, the distribution of updated forms, procedures and guidance related to Local Law 1 and through their own Local Law 1 manual.

“These contracts are important to our city because they strengthen the diversity of our affordable housing workforce and add to our ability to provide safe and affordable housing for all New Yorkers,” a spokesperson said.