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Changes to subcontract approval process and related party transaction reviews

1:27:27

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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.

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