HopeWorks shut out of future city contracts

Contractor’s outstanding debt cited as reason for decision

Unable to resolve an outstanding debt to the city of more than $155,000, HopeWorks, one of the city’s larger contractors providing services to the homeless and poor, will no longer be eligible to receive contracts from the city of Albuquerque.

“Under our procurement rules and administrative requirements, when a debt is owed to the city, that service agency is ineligible to contract with our department,” Carol Pierce, director of the city’s Department of Family and Community Services, said Tuesday. “We are now working with other homeless agencies to provide those services in the community.”

A report issued in December from the city’s Office of the Inspector General said HopeWorks “defrauded” the city of $155,586 by double billing the city and Medicaid with respect to an Assisted Outpatient Treatment program.

The OIG report said the city and HopeWorks were both remiss in having “adequate practices of monitoring” in place. That lack of internal controls, the report said, “makes the city susceptible to fraud, waste and abuse, as indicated by inaccurate reporting of contract revenues and expenditures,” resulting in noncompliance of the contract.

In response to being shut out of contracts with the city, HopeWorks CEO Annam Manthiram said Tuesday, “It is unfortunate that the city has taken this stance with HopeWorks, and has decided to withhold current and future contracts. The city has not provided a legitimate basis for its position that HopeWorks owes the city funds.”

Manthiram said HopeWorks had the OIG’s findings reviewed by an external auditor who determined that the nonprofit had not committed any financial misconduct.

In a letter to the Journal published in January, HopeWorks board president William Miller wrote that the $155,000 discrepancy is a result of the city’s “misunderstanding of the difference between the distinct revenue streams of Medicaid and grant billing.”

Based on applicable billing codes, Miller said, “When we bill city grants, including the Assisted Outpatient Treatment contract in question, we are not billing for services rendered, but for program staff, cellphones and mileage, necessary supplies and other program

costs.”

However, Pierce said in the conversations the city has had with representatives from HopeWorks since the OIG report was issued, an accounting of how those funds were spent was requested repeatedly, “and it hasn’t resulted in any further documentation from HopeWorks to prove that they don’t owe that outstanding debt.”

According to Manthiram, “If the city wanted to provide a waiver so that HopeWorks can continue to partner with the city, it could.” Instead, the city has “chosen to take this punitive stance, which only hurts our unhoused population at a time when the problem is growing in severity and the city is being questioned for its strategies regarding this issue.”

HopeWorks currently has three ongoing contracts with the city that will continue. One, worth about $134,000 and which ends Sept. 30, is for transitional housing. HopeWorks indicated it did not want to continue after its expiration, Pierce said. Another is a $700,000 rental assistance program that has been extended until April 30, 2023, and the third is a rapid rehousing program to provide vouchers worth about $1.4 million, and expires Nov. 30.

In the past, city contracts with HopeWorks have included a displaced tenant relocation program, a meals program, a street sweepers program, an outreach program and various housing programs. Those contracts have been worth in excess of $5 million, Pierce said. They will be transitioned to “other providers that do similar services and who are willing to take on that work, so there won’t be any gaps in the services,” she said.