DOI FOLLOW-UP INVESTIGATION FINDS INSUFFICIENT INVENTORY CONTROLS OVER LARGE APPLIANCES AT NYCHA FACILITIES

  Mark G. Peters, Commissioner of the New York City Department of Investigation (“DOI”), announced that an investigation into the New York City Housing Authority’s (“NYCHA”) inventory tracking and controls of large appliances is insufficient and places inventory at risk for theft. DOI undercover investigators entered six NYCHA facilities and removed new and used refrigerators and stoves without being stopped or detected. In each of these instances, subsequent interviews with NYCHA employees revealed that managerial staff was unaware the items had been removed and did not report any appliances as missing. This investigation was a follow-up to DOI’s investigation in 2016 that exposed the problem of large appliance theft from NYCHA facilities, resulting in the arrest of a NYCHA caretaker and the recommendation for NYCHA to perform an inventory review and strengthen controls in tracking and safeguarding large appliances to prevent further theft. A copy of DOI’s Report follows this release and can also be found at the following link: http://www1.nyc.gov/site/doi/newsroom/public-reports.page/

  Commissioner Mark G. Peters said, “At a time when NYCHA faces a severe budget crisis, its failure to safeguard property simply compounds this problem. DOI undercover investigators were able to enter into NYCHA facilities and cart away large appliances, without challenge or notice.”

  DOI first informed NYCHA of breakdowns in its inventory management in July 2016, when it arrested a NYCHA caretaker for stealing three refrigerators from a NYCHA facility, and subsequently discovered that same employee had stolen additional appliances on multiple occasions, including stoves and washing machines, and sold them to an appliance store for cash. That employee pleaded guilty to Petit Larceny and resigned from NYCHA after his arrest. A copy of the press release from the July 2016 arrest can be found at the following link: http://www1.nyc.gov/assets/doi/press-releases/2016/jul/23KenyonAllen07- 22-16.pdf

  In July 2017, DOI began its follow-up investigation and surveyed 19 NYCHA developments, focusing its undercover investigations on six that readily presented security vulnerabilities. Dressed as either NYCHA employees or in plainclothes, DOI undercover investigators went to these six sites to determine whether NYCHA had strengthened its safeguards against large appliance theft, as DOI recommended a year earlier. Investigators easily removed large appliances, including refrigerators and stoves, at these six sites: Pelham Parkway Houses in the Bronx, Wald Houses and Smith Houses in Lower Manhattan, Sheepshead Bay Houses in Brooklyn, Hammel Houses in Queens and Mariner’s Harbor in Staten Island. During follow-up visits to these same sites, storeroom and managerial staff were unaware that any appliances were missing, telling DOI investigators that no appliances were missing from the storerooms, no thefts had occurred, or all appliance stock was accounted for. In one of these developments – the Sheepshead Bay Houses – a week after investigators removed a new stove from the premises, investigators observed that the storeroom remained open and unsecured, and the Assistant Superintendent reported that no appliances were missing or stolen.

  DOI also identified several other vulnerabilities at these NYCHA properties that need to be addressed to further secure appliances at developments, including the inadequate use of CCTV cameras to monitor employee areas like development storerooms, and a lack of routine physical inventory counts by managers to aid in the detection of theft or other losses.

  As a result of this follow up investigation, DOI determined that NYCHA failed to address the vulnerabilities identified in DOI’s 2016 theft investigation. As a result, DOI has made the following recommendations to NYCHA:

 Survey and improve security as needed at development storerooms and supply rooms, including installing self-closing and self-locking doors, alarm systems, electronic-layered access control systems, roll-down gates, and CCTV cameras. 

 Ensure that Housing Managers and Superintendents are practicing appropriate controls over storeroom and supply room keys such that only authorized NYCHA personnel – Housing Managers, Superintendents, Assistant Superintendents, Storeroom Keeper, Supervisor of Housing Caretakers, and Supervising Housing Groundskeeper – have key access. Development staff should be instructed to question unauthorized individuals found in development storerooms and to promptly report any suspicious activity to NYCHA’s Office of the Inspector General.

 Install signage at each storeroom indicating that access is restricted to authorized personnel. 

 Implement policy to track large appliances and other valuable items by manufacturer’s serial numbers via computerized systems, beginning at receipt from the supplier, through storage in storerooms/supply rooms, and following through to installation in individual resident’s apartments.  Enforce NYCHA policies requiring development managers to personally count 100% of all high-value (“Closed Kit”) inventory items each year, and to document and investigate any inventory imbalances.

DOI Commissioner Mark Peters thanks NYCHA Chair and Chief Executive Officer Shola Olatoye and her staff for their cooperation in this investigation.

  The investigation was conducted by DOI’s Office of the Inspector General for NYCHA, specifically Deputy Inspector General Osa Omoigui and Confidential Investigator Alfred Carletta, under the supervision of First Deputy Inspector General Pamela Sah, Inspector General Ralph Iannuzzi, Associate Commissioner James Flaherty, Deputy Commissioner/Chief of Investigations Michael Carroll and First Deputy Commissioner Lesley Brovner.