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February 5, 2009


New York City Housing Development Corporation
Improperly Paid Health Benefits for Board Member

The New York City Housing Development Corporation paid for health benefits for a board member who should not have received them, according to an audit released today by State Comptroller Thomas P. DiNapoli.

The audit, which covered a two-year period, found that the corporation improperly paid $56,646 in premiums for a current board member from September 2001 to March 2007. By law, board members are not entitled to receive a salary or any type of compensation.

“The rules are clear,” DiNapoli said. “But the rules were overlooked. This board member was given special treatment. The New York City Housing Development Corporation is no longer paying this board member’s health insurance but action must be taken to ensure this doesn’t happen again.”

According to corporation staff, the former president arranged for the board member to be enrolled into the corporation’s health insurance plan as a “favor.” The former president left the corporation in early 2002 after it was discovered that he misused corporation funds. Auditors found no evidence the other board members were involved in the decision to give this board member health benefits nor were they even aware of the arrangement. The board member’s coverage has been terminated.

Auditors found the seven board members generally carried out most of their required responsibilities but found some areas that needed improvement, such as:

  • Some board members did not file annual disclosure forms with the New York City Conflicts of Interest Board within the required time frame. One board member was 10 months late in filing the required information. The board also did not keep track of when or if board members filed their disclosure forms.
  • The board’s audit committee did not adhere to all necessary laws and directives. For instance, it did not require its independent auditor to rotate audit senior staff and prepare an annual report.
  • Corporation documentation showed that only two of the seven board members had received required training.
  • Auditors were told that the board performed annual evaluations of the president, but the board could not provide any documentation of the evaluations and nothing was mentioned in the minutes during the two-year audit period about these evaluations.

In its response to the audit, the corporation indicated that it has taken action to fix many of the problems identified by auditors.

Click here for a copy of the audit.


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