Audit of the Executive Office of Housing and Livable Communities - Emergency Shelter (May 20, 2025)
May 20, 2025 · Executive Office of Housing and Livable Communities—Emergency Shelter · Read the full official report on mass.gov ↗
Published May 20, 2025 Audit covers July 1, 2021 – December 31, 2023 Under Diana DiZoglio · 2023–present
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“EOHLC failed to adequately assess and act upon the increased demand for service, resulting in improper and unlawful emergency procurements for food and transportation services.”
Read the plain-English breakdown
This is a state performance audit of the Executive Office of Housing and Livable Communities’ emergency shelter work during July 1, 2021 through December 31, 2023, with some food and transportation spending reviewed through June 30, 2024.
“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted the first in a series of performance audits of the Executive Office of Housing and Livable Communities (EOHLC) for the period of July 1, 2021 through December 31, 2023.”
Auditors checked whether shelter providers were paid according to contract terms and whether emergency food and transportation contracts followed state emergency procurement rules.
“The purpose of our audit was to determine EOHLC the following:”
The report says weak procurement and oversight can waste public money, reduce transparency, and damage trust in government.
“This noncompliance with procurement guidelines undermines the integrity of the procurement process and resulted in an inefficient use of public funds.”
For ordinary taxpayers and residents, the key point is whether public money for shelter, meals, and rides was spent carefully and whether families in crisis were supported through properly managed contracts.
“Without a complete procurement file, the public cannot examine the processes used, which erodes public trust and undermines faith in EOHLC, its procurement process, and the government in general.”
The auditor concluded EOHLC did not meet either audit objective: payments to shelter providers did not always match contracts, and emergency food and transportation contracts did not comply with the cited rule.
“Based on the results of our testing, we determined that EOHLC did not ensure compliance with 801 CMR 21.05(3) when contracting emergency services under the EA Family Shelter Program.”
The auditor recommended stronger procurement practices, better documentation, invoice checks, clearer contract controls, and follow-up in about six months.
“As part of our post-audit review process, we will follow up on this matter in approximately six months.”
The report is significant because the shelter system served thousands of families and involved large public spending, including hundreds of millions in shelter payments and millions more for emergency food and transportation contracts.
“We obtained and examined a spreadsheet of 3,379 payments, totaling $700,020,208, made to shelter providers, including hotels and motels, during the audit period from the Massachusetts Management Accounting and Reporting System (MMARS).”
A no-bid emergency contract means the state can skip normal competition only for an urgent, unforeseen need, but the report says agencies should still follow procurement rules as much as possible and keep records explaining the decision.
“Even under emergency circumstances, however, you must comply with Chapter 30B to the extent possible.”
15 figure(s) pending source verification - not shown
What the Auditor checked
- Did not comply Did EOHLC pay the traditional shelters and hotels/motels—which provided housing to individuals who sought emergency assistance (EA)—according to their contracts with EOHLC?
- Did not comply Did EOHLC ensure that the emergency food and transportation services provided under the Emergency Assistance Family Shelter program were contracted in accordance with section 21.05(3) of Title 801 of the Code of Massachusetts Regulations (CMR)?
What the Auditor found
Why it matters: EOHLC bypassed competitive procurement procedures, reducing transparency and accountability and causing inefficient use of public funds.
Standard: Section 22 of Chapter 7 of the Massachusetts General Laws; Section 21.05(3) of Title 801 of the Code of Massachusetts Regulations; Chapter 639 of the Acts of 1950 ( Section 22 of Chapter 7 of the Massachusetts General Laws; Section 21.05 of Title 801 of the Code of Massachusetts Regulations; Section 8 of Chapter 639 of the Acts of 1950 )
4 recommendations
- In cases where increasing demand or foreseeable circumstances are identified, EOHLC should use appropriate procurement processes, such as competitive bidding, to ensure transparency, fairness, and cost-effectiveness.agency: disagreed
- EOHLC should review and adjust its procurement practices to ensure that it complies with Section 22 of Chapter 7 of the General Laws and regulations for emergency contracts, ensuring that all emergency contracts are justified based on unforeseeable events.agency: disagreed
- EOHLC should limit emergency contracts to no longer than a period of time required to conduct the appropriate procurement processes, including competitive bidding, to ensure transparency, fairness, and cost-effectiveness.agency: disagreed
- EOHLC should ensure that, before not complying with Section 22 of Chapter 7 of the General Laws, the orders to do so are legal and valid under Chapter 639 of the Acts of 1950.agency: disagreed
Agency response & Auditor reply
Agency: "EOHLC cannot concur with and rejects Audit Finding 1 as fundamentally wrong and unfounded."
Auditor: "We stand by the work performed and the information presented in the finding."
Why it matters: EOHLC may have missed an opportunity to reduce delivery charges, and the incomplete procurement file prevents verification that Spinelli was the best option.
Standard: Section 21.05(3) and Section 21.06(1) of Title 801 of the Code of Massachusetts Regulations; Part 15.4 of the Federal Acquisition Regulation ( Part 15.4 of the Federal Acquisition Regulation; 801 CMR 21.06(1); 801 CMR 21.05(3) )
3 recommendations
- During an emergency, EOHLC may be forced to use no-bid procurement, but it has an obligation to use the normal procurement processes as quickly as possible to address longer-term procurement needs.agency: partially agreed
- EOHLC should follow state regulations by creating and maintaining a procurement file with sufficient evidence and should establish a formal process for documenting and considering cost-saving opportunities to avoid wasting taxpayer resources.agency: agreed
- EOHLC should ensure that all vendor proposals, including alternate pricing structures like flat rates, are thoroughly evaluated in all contracts, including no-bid or emergency contracts, and are documented in a procurement file.agency: partially agreed
Agency response & Auditor reply
Agency: "EOHLC agrees that maintaining a complete procurement file ensures the retention of sufficient documentation supporting decisions to enter into emergency contracts."
Auditor: "Our finding is that EOHLC’s procurement file did not contain sufficient evidence and documentation to support the agency’s decision to contract with Spinelli; we examined the evidence provided by EOHLC and determined it to be insufficient."
Why it matters: EOHLC paid more than contracted rates for some delivery services, creating financial integrity and contract compliance risk.
Standard: Attachment A of the Executive Office of Housing and Livable Communities Emergency Assistance Shelter Meal Service Scope of Services contract ( Attachment A of the Executive Office of Housing and Livable Communities Emergency Assistance Shelter Meal Service Scope of Services contract )
2 recommendations
- EOHLC should implement a formal process for verifying that vendor invoices, specifically delivery charges, align with contracted rate sheets.agency: partially agreed
- EOHLC should address these discrepancies with Spinelli and seek clarification or adjustments for the incorrect charges.
Agency response & Auditor reply
Agency: "EOHLC disagrees that the overpayment of 0.02% of costs under the contract supports a finding of insufficient oversight, but acknowledges that improvements made since the audit period have increased oversight efforts."
Auditor: "While EOHLC may not consider the preventable loss of taxpayer dollars, in any amount, to be worth pointing to as an area for needed improvement, we do."
Why it matters: The lack of documentation reduced transparency and accountability and increased risk that services and payments were not consistent with contract terms.
Standard: Subsection K of Section III of Attachment A of the Executive Office of Housing and Livable Communities Division of Housing Stabilization Emergency Assistance Family Shelter contract ( Subsection K of Section III of Attachment A of the Executive Office of Housing and Livable Communities Division of Housing Stabilization Emergency Assistance (EA) Family Shelter contract )
2 recommendations
- EOHLC should review and approve all subcontractors in accordance with the terms and conditions of its contracts.agency: agreed
- Because of the violation of the contracts’ terms and conditions by SKS, regarding the use of unapproved subcontractors, EOHLC should pursue repayment from SKS for unapproved expenses charged to EOHLC.agency: disagreed
Agency response & Auditor reply
Agency: "EOHLC did properly supervise SKS Management Corporation’s use of subcontractors, limiting use to approved subcontractors only."
Auditor: "EOHLC stated that it will update its internal policies and procedures regarding documenting the approval of subcontractors."
Why it matters: High fees and weak oversight increased the risk of excessive transportation costs, inflated pricing, inappropriate charges, and reduced public trust.
Standard: Section 21.05(3) and Section 21.06(1) of Title 801 of the Code of Massachusetts Regulations; Attachment A of the Executive Office of Housing and Livable Communities Emergency Assistance Shelter Transportation Service Scope of Services contract ( Subsection 1 of Section II of Attachment A of the Executive Office of Housing and Livable Communities Emergency Assistance Shelter Transportation Service Scope of Services contract; 801 CMR 21.06(1) )
10 recommendations
- EOHLC should initiate a competitive bidding process whenever possible to ensure the best value for taxpayers, including more cost-effective contracts based on regional demands for transportation services.agency: partially agreed
- EOHLC should create and maintain a sufficient procurement file and should establish a formal process for documenting and considering cost-saving opportunities to avoid wasting taxpayer resources.agency: agreed
- EOHLC should evaluate the reasonableness of the fare structure in comparison to industry standards and adjust as necessary to ensure that transportation costs do not exceed reasonable limits.agency: disagreed
- EOHLC should review the specific circumstances surrounding the charge for the 223-foot trip with Mercedes Cab Company / Pilgrim Transit to ensure that such charges are reasonable and consistent with the contractual terms.
- EOHLC should review the ride to a healthcare facility that 55 individuals took in one trip, costing $4,651.30.
- EOHLC should first consider using public transportation options to reinvest in the MBTA and regional transit authorities (RTAs) before entering into a no-bid contract with a more costly, private transportation company.agency: disagreed
- EOHLC should establish clear guidelines to increase accountability regarding the minimum acceptable distance for rides and review the process for approving and billing transportation requests to prevent similar issues from arising in the future.
- EOHLC should implement enhanced oversight procedures to verify that charges are justified and in line with the stated objectives of the EA Family Shelter program.agency: already implemented
- EOHLC should implement stronger controls and monitoring mechanisms (a) to minimize the occurrence of no-shows and cancelations and (b) for when a ride can be requested, canceled, or classified as a no-show.agency: already implemented
- EOHLC should regularly review cancelation and no-show patterns and work with Mercedes Cab Company / Pilgrim Transit to address any underlying issues contributing to the high volume of cancelations.agency: already implemented
Agency response & Auditor reply
Agency: "EOHLC did maintain a procurement file documenting its basis for entering into an emergency contract with MCC, but EOHLC agrees on the importance of properly documenting procurement decisions."
Auditor: "We agree that EOHLC did work to justify the decision to award an emergency no-bid contract to Mercedes Cab Company / Pilgrim Transit."
Why it matters: Payment inaccuracies and unsupported charges risk financial mismanagement, reduce accountability, and can harm shelter providers and program recipients.
Standard: Subsection I of Section III of Attachment A of the Executive Office of Housing and Livable Communities Division of Housing Stabilization Emergency Assistance Family Shelter contract ( Subsection I of Section III of Attachment A of the Executive Office of Housing and Livable Communities Division of Housing Stabilization Emergency Assistance (EA) Family Shelter contract )
3 recommendations
- EOHLC should implement stronger monitoring procedures to verify that all payments to shelter providers align with the negotiated terms in their contracts.agency: agreed
- EOHLC should ensure that all charges are pre-approved, contractually authorized, and properly documented before processing payments.agency: agreed
- EOHLC should limit the use of gift cards, and in instances where it does allow them, EOHLC should implement stronger control mechanisms like those required for other public benefit programs within the Department of Transitional Assistance to prevent potential abuse or misspending of taxpayer-funded benefits.agency: agreed
Agency response & Auditor reply
Agency: "EOHLC properly managed its shelter providers and adhered to the terms of its contract, but is committed to continue improving its monitoring and invoice review processes."
Auditor: "In its response, EOHLC stated that it is standard practice to charge hotel guests for the use of meeting rooms or conference rooms."