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Stringer Says EDC Isn't Doing Enough to Monitor Conflicts of Interest

 Comptroller Scott Stringer discussing Mayor Bill de Blasio's preliminary budget on February 19, 2014, and warning that labor contracts continue to represent the biggest threat to the city's fiscal health.
Comptroller Scott Stringer discussing Mayor Bill de Blasio's preliminary budget on February 19, 2014, and warning that labor contracts continue to represent the biggest threat to the city's fiscal health.
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DNAinfo/Colby Hamilton

CIVIC CENTER — The city’s Economic Development Corporation, which helps spur economic growth through city funds and tax breaks, hasn’t been doing enough to avoid conflicts of interest when it awards contracts, according to a report released Friday by Comptroller Scott Stringer’s office.

After a review of agency records from July 2007 to April 2013, the EDC failed to ensure contractors’ affidavits about conflicts of interest were completed on time during project bids, didn’t document follow-ups on contractors who had potential conflicts, and allowed contracts to begin without getting contractors cleared by the city’s Department of Investigation, among other things, the report said.

“EDC must make every effort to ensure that City dollars are spent properly,” Stringer said in a statement. “Our audit found payments were made without proper documentation because EDC failed to enforce contract requirements. As the City’s economic development engine, EDC should be more diligent in ensuring the City does not receive substandard services from its contractors.”

The Comptroller’s office focused on environmental and engineering contracts, amounting to nearly $19 million in development projects as of June 2013.

The report depicted an EDC that lacked basic office filing procedures: it failed to mark when proposals came in for time-sensitive projects; and failed to make sure conflicts on city-funded jobs were rooted out.

The audit also found the EDC failed to properly track who was actually working on contracted jobs, resulting in nearly $467,000 going to unapproved staff on a contracted job.

Additionally, the report’s review of timesheets submitted to EDC for contract work contained numerous problems. In a review of $2.8 million worth of invoices, timesheets were absent for $1.3 million worth of work billed. More than a half-million dollars worth had no approval date on timesheets, and $50,000 worth of timesheets were approved before the end of the work week.

In December 2013, the Comptroller’s office presented EDC with the audit findings and 11 recommendations. Of the 11, EDC disagreed with all but three.

“NYCEDC carefully reviewed the Comptroller’s findings and responded appropriately, proposing some modifications as a result of the recommendations,” an agency spokeswoman said in a statement. “We will continue to work with the Comptroller’s office as appropriate going forward.”