In a scathing critique of the Bloomberg administration's oversight practices, John C. Liu, the city's comptroller and the city's top fiscal watchdog has accused the city's main agency for economic development of allowing a contract with a construction company to balloon by tenfold in three years to nearly $74 million, and authorizing over $3 million in dubious payments, according to an article by David W. Chen in today's edition of The New York Times.
According to the audit, the agency approved 21 changes between July 2008 and January 2010 to a contract with Turner Construction Company, which was asked to provide facility management and construction management services at the Brooklyn Army Terminal, Essex Street Market building and other sites. As a result, the contract's value jumped to $73.5 million, from $7.5 million.
The audit says the agency authorized $3.3 million in "inappropriate and questionable payments" to Turner. They include improper reimbursements for unsubstantiated expenses and unnecessary costs for loading, storing and transporting contaminated soil from the Brooklyn Army Terminal site.
Referring to an alarming "lack of involvement," the article continued, "the audit says the agency demonstrated a "total reliance" on the construction company and "relinquished far too much control and supervision in reviewing and overseeing the work carried out by Turner."
The audit is the latest in an increasingly hostile battle between the agency, which has become a important vehicle for Mayor Michael R. Bloomberg's aggressive development agenda, and Mr. Liu, whose office must approve the corporation's contract with the city every year.
The article noted the city's "equally scathing and exhaustingly detailed response," adding that "in a 30-page letter, serving up a point-by-point rebuttal, the agency says Mr. Liu is 'displaying an unfortunate misunderstanding' of the contracting process' and that "the agency says '20 of the 21 completed projects included in this audit came in under budget, for a net aggregate savings of $2.7 million.'"
"We are disappointed that after a 16-month review, the comptroller's office has issued an audit report that is flawed, misleading and draws unsupported conclusions," Julie Wood, a spokeswoman for the Economic Development Corporation, said in the statement.
Mr. Liu, a former member of the City Council, has long questioned the agency's transparency. In April, he accused the agency of failing to turn over to the city more than $125 million in payments, taxes and fees through leases on buildings in Times Square and the sale of city properties. The article said that "Bloomberg administration officials strongly took issue with the audit, but agreed in July to hand over more than $120 million in rental payments by 2014."
In another audit, released in February, Mr. Liu said the agency was doing a poor job overseeing the Water Club restaurant on the East River between 30th and 32nd Streets. Auditors had a hard time tracking down cash receipts for the restaurant - something that "shortchanges the city," the audit said.
According to the audit, the agency approved 21 changes between July 2008 and January 2010 to a contract with Turner Construction Company, which was asked to provide facility management and construction management services at the Brooklyn Army Terminal, Essex Street Market building and other sites. As a result, the contract's value jumped to $73.5 million, from $7.5 million.
The audit says the agency authorized $3.3 million in "inappropriate and questionable payments" to Turner. They include improper reimbursements for unsubstantiated expenses and unnecessary costs for loading, storing and transporting contaminated soil from the Brooklyn Army Terminal site.
Referring to an alarming "lack of involvement," the article continued, "the audit says the agency demonstrated a "total reliance" on the construction company and "relinquished far too much control and supervision in reviewing and overseeing the work carried out by Turner."
The audit is the latest in an increasingly hostile battle between the agency, which has become a important vehicle for Mayor Michael R. Bloomberg's aggressive development agenda, and Mr. Liu, whose office must approve the corporation's contract with the city every year.
The article noted the city's "equally scathing and exhaustingly detailed response," adding that "in a 30-page letter, serving up a point-by-point rebuttal, the agency says Mr. Liu is 'displaying an unfortunate misunderstanding' of the contracting process' and that "the agency says '20 of the 21 completed projects included in this audit came in under budget, for a net aggregate savings of $2.7 million.'"
"We are disappointed that after a 16-month review, the comptroller's office has issued an audit report that is flawed, misleading and draws unsupported conclusions," Julie Wood, a spokeswoman for the Economic Development Corporation, said in the statement.
Mr. Liu, a former member of the City Council, has long questioned the agency's transparency. In April, he accused the agency of failing to turn over to the city more than $125 million in payments, taxes and fees through leases on buildings in Times Square and the sale of city properties. The article said that "Bloomberg administration officials strongly took issue with the audit, but agreed in July to hand over more than $120 million in rental payments by 2014."
In another audit, released in February, Mr. Liu said the agency was doing a poor job overseeing the Water Club restaurant on the East River between 30th and 32nd Streets. Auditors had a hard time tracking down cash receipts for the restaurant - something that "shortchanges the city," the audit said.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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