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Changes to subcontract approval process and related party transaction reviews
1:27:27
ยท
115 sec
Commissioner Molly Wasow Park elaborates on changes made to the subcontract approval process and related party transaction reviews within the Department of Social Services (DSS).
- DSS now conducts thorough reviews of subcontracts during contract approvals and annual budget reviews
- The agency requires evidence of three bids for subcontracts and will not approve payments without proper documentation
- A more stringent '65a approval process' has been implemented, which involves detailed scrutiny of subcontractor procurement
- The new system built into the latest iteration of Passport is expected to improve accountability and efficiency in the approval process
Molly Wasow Park
1:27:27
So any let me talk specifically about subcontracts because I think that is the the, what it is that we're really getting at of
Julie Won
1:27:36
this contract.
1:27:36
Related party transactions.
Molly Wasow Park
1:27:38
Yeah.
1:27:38
So subcontracts and particularly related party subcontracts.
1:27:42
So, for the last several years, what we have been doing is that anytime we are approving a contract, Right?
1:27:48
Any contract that we are looking at and any, frankly, any budget that we are looking at.
1:27:53
So even if the contract is is up and running, but we do an annual budget approval, we are looking at those subs.
1:28:00
This is a process that has been known as the 65 a approval after the form that that providers have to fill out.
1:28:08
We have really it's citywide, but, I think DHS, DSS have taken a very aggressive approach to that over the last several years, really digging into, how were those subcontracts procured and is there any indication of related party transaction there.
1:28:26
So even if there's no indication of related party transaction, but if we are not seeing 3 bids, we will not approve that subcontract.
1:28:34
So what that means from a payment perspective, is that we will hold on that subcontractor payment, pay the rest of the invoice.
1:28:43
So, for example, provider invoices for for the month of November, it includes a security subcontract.
1:28:52
If they don't have that 65 a, that that subcontractor approval, we will pay on the rest of the contract.
1:28:58
We will hold on that on the security portion of the invoice.
1:29:02
I actually suspect, probably, many of you have heard from providers complaining about our 65 a approval process because it does take time to do that level of review.
1:29:12
One of the things that I'm really encouraged about for going forward is that that has been built into the latest iteration of passport.
1:29:19
So I think that is gonna allow us to be both more accountable and quicker.