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Public Housing Spotlight

Issue 81
Published on April 12, 2001

For a printable (PDF) version of any Spotlight articles, please specify the issue and email us at nychaspotlight@netscape.net

(Click Here for NYCHA "preliminary" Audit
by NYC Comptroller Alan Hevesi)

(Click Here for Directory of Issues)

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NYCHA's Audit

(It's your money
they're playing with!)

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Okay, it's only close to a smoking gun.
But it's near enough for me.

In the Spotlight Special Corruption Issue, I relate a tail of corruption, cover-up, retaliation and fraud in William Russo's Director-dom at NYCHA's Contract Administration Department. The items enumerated in the Corruption Issue SHOULD have caused a major investigation into the highest levels of NYCHA.

But it didn't! Why?

Well one of the main reasons was, according to the IG's office, I was wrong about there being "large discrepancies in the data contained in the various Contract Administration Department's computer records."

This was told to me by the IG/DOI investigator, John Kilpatrick, to whom I had reported the problem. An investigator who would not know the difference between a database and second base.

Now, the Audit Division of the New York City Comptroller's Office reached the very same conclusion. Only the Comptroller's Audit came 4 years after I had first reported the problem.

To give this report its due, I've posted the entire thing on this website (Click Here to view the entire 7 month-old Preliminary Draft of the audit. "Findings and Recommendations" begin on page 6.)

In short, Comptroller Hevesi's staff
found the NYCHA system a mess!

(There are 3 different computer systems used by the Contract Administration Department. Various data about the same contracts are stored in one or more of these systems. CTS is the Contract Tracking System. FMS is NYCHA's Financial Management System. The third system is actually just a shared application that tracks both CAD and Tech Services items. In the Comptroller's Audit, the acronym CAD stands for that Application.)

Let's pull a few quotes from the Preliminary Draft of the Audit that Spotty found laying by the welcome mat:

"CTS information has become increasingly inaccurate over the years . . ."


"To compensate for the lack of reliable data within all three systems, Disbursement Contracts performs a manual review of all source documentation before authorizing payments to contractors."

Hmm. Inspectors first go through hoops getting all the paperwork into shape before putting in for a payment to a contractor. The Execs then go over the paperwork with a fine tooth comb. Secretaries have to enter all the data into the 3 different computer systems.


Because NYCHA is so screwed-up that a "manual review of all source documentation" must be done before authorizing payments to contractors! Heads should roll!

" . . . we found that 50% of CAD and CTS records did not match."

" . . . we found that 50% of FMS and CTS records did not match."

"There is No Management Oversight of Policies, Practices, and Internal Controls"

"Generic user authorization in the CTS area obscures the audit trail."

When changes are made to data in CTS, there is no way to identify who altered the files. The only thing the computer can tell you is that "Staff" did it. Of course, a convicted extortionist was then Manager of Data security for NYCHA.

While there is MUCH more in the document, we'll hope you'll give it a quick read yourselves. This attempt at an audit should make it clear to everyone that an investigation into the charges of corruption is more than necessary.

After reading this document, I'm surprised that there's any money left in HUD/NYCHA's accounts!

By the way, when I was reporting the computer problems and the possibility that anyone with minimal computer skills could see that financial misdeeds would be easy to cover-up, Bruce Gatewood ran Computer Services. And wouldn't you know, Gatewood's family and Kalman Finkel's family were friends prior to his being hired at NYCHA.

Ruben Schron, another Finkel family friend, is one of the owners of the $8,000,000 L.I. City warehouse that NYCHA leases for 20 years at $100,000,000.

And Finkel's family now has friends at Interboro, as they hired his daughter. (Of course, he was fined by the Conflicts of Interest Board for this family affair.)

What a coincidence that Kalman (who recently ordered that his name stay on all NYCHA stationary, no matter what Rudy wants) has friends involved in so many NYCHA horrors!

© 2001 Public Housing Spotlight and John Ballinger. All rights reserved.
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Contact Jack Ballinger at nychaspotlight@netscape.net
for a Real Audio sound clip containing a
conversation wherein DOI Investigator
John Kilpatrick discusses how he learned
that 2 NYCHA execs attended
a Mafia connected contractor's funeral .

Contact Jack Ballinger at nychaspotlight@netscape.net
for a Real Audio sound clip containing
the (3 Meg) confession of Tony DiAlto.
Tony was a member of a group of
corrupt Contract Inspectors working at NYCHA.
Neither Tony nor the person he confessed to
sharing his bribes with (Richard Penesi)
were ever charged, let alone prosecuted, by DOI.

For a great source of general tenant information,
visit the Tenant Net Home Page |

And for a great source of New York City news and
policy information, visit our friends at the Gotham Gazette

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NYC Housing Authority's
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