Press Release: 5/21/2025

Shelter Audit Finds Contract Mismanagement, Improper and Unlawful Use of Emergency Procurements

 

Excessive Costs, Missing Documentation, Lack of Oversight Flagged as Issues

FOR IMMEDIATE RELEASE:

5/20/2025

MEDIA CONTACT

Andrew Carden, Director of Operations

 Phone

Call Andrew Carden, Director of Operations at 617-631-5692

 Online

Email Andrew Carden, Director of Operations at andrew.carden@massauditor.gov

BOSTON — Today, State Auditor Diana DiZoglio’s Office released an audit report of the Executive Office of Housing and Livable Communities (EOHLC), reviewing the period from July 1, 2021, through June 30, 2024. The report specifically focuses on issues pertaining to procurement and contracting with respect to the state’s emergency shelter system.

Among the audit’s findings is that EOHLC failed to adequately assess and act upon the increased demand for shelter services, resulting in improper and unlawful no-bid emergency procurements for food and transportation services. EOHLC bypassed established procurement procedures, resulting in a lack of fairness via competitive bidding and a lack of transparency and accountability in the contracting process.

The no-bid contracts resulted in unnecessarily high costs and inefficiencies. Moreover, the duration of the no-bid contracts was excessive. Non-compliance with proper procurement protocols hinders the integrity of the contracting process and undermines the public’s trust in government.

The audit notes there was missing evidence and insufficient documentation to support EOHLC’s decision to enter into a no-bid contract with Spinelli Ravioli Manufacturing Company, Inc. (Spinelli) and EOHLC did not consider an opportunity to accept a flat rate with Spinelli for food delivery services. EOHLC failed to provide adequate oversight of its delivery contract with Spinelli, resulting in overpayments on 9.6% of deliveries. Overcharges resulted in EOHLC paying more than the contracted rates for delivery services.

Moreover, the audit found EOHLC violated part of its contract with SKS Management, Inc., which contracted with EOHLC to provide emergency shelters, by not approving in writing the use of certain subcontractors. The lack of documentation raises concerns regarding oversight of the subcontracting process and about the legality of the contract because the terms and conditions were being ignored. Without proper records, EOHLC cannot verify whether services were provided according to contractual terms, nor can it ensure that payments were appropriate and aligned with the agreed-upon budgets.

The audit also found there was missing evidence and insufficient documentation to support EOHLC’s decision to enter into a no-bid contract with Mercedes Cab Company / Pilgrim Transit (MCC). This emergency no-bid contract for transportation services resulted in excessive costs. The lack of competitive bidding for this contract raises concerns about fairness and inflated pricing, further limiting the effectiveness of this arrangement in terms of cost-efficiency and transparency.

Furthermore, the audit found EOHLC mismanaged some of its contracts with different types of shelter providers - traditional shelters and hotels/motels. Failure to comply with contractual payment terms constitutes financial mismanagement. Such financial conditions impair EOHLC’s ability to deliver vital services, ultimately jeopardizing the welfare of the people and communities it serves. EOHLC has a fiduciary duty to ensure the accuracy and integrity of invoices for contracted services.

Overall, many of the issues raised in this report point to a lack of administrative oversight at EOHLC during the emergency shelter crisis, creating an avoidable risk for the Commonwealth in responding to this and other emergencies.

“We hope, for the sake of history not repeating itself, especially in areas such as the no-bid contracting process, where taxpayers have grown increasingly frustrated and concerned with the appearance of impropriety regarding how and why no-bid contracts were awarded, that this Administration will move away from its defensive posture and instead embrace recommended reforms,” said Auditor DiZoglio. “This is an opportunity for the Administration to reevaluate how it can and must be a more responsible steward of its significant authorities under states of emergency. The audit shines a light on where efficiencies and improvements should be implemented to help save taxpayer dollars and increase public trust.”