Philadelphia Wasted $500k on a Computer System That Doesn't Work

by | June 18, 2015

By Wendy Ruderman

City officials blew more than $500,000 on a failed computer technology upgrade that was supposed to track how the city used a $30.8 million grant from the U.S. Housing and Urban Development to combat homelessness. Now, officials with the city's Office of Supportive Housing are scrambling to find -- and pay -- a new vendor to quickly fix the mess, or potentially risk losing millions of dollars in HUD money needed to fund critical homeless-assistance programs in Philadelphia.

"I think it's premature to talk about losing funding on any level," HUD spokesman Brian Sullivan said this week. "Our local office . . . our folks here in headquarters in Washington are deeply engaged in the situation. I'm told that we are working very closely with [Philadelphia] to get this system operating as it ought to be. I don't think we are there yet, but we are working toward it."

HUD has awarded the city more than $740,000, or $247,196 a year, for the past three fiscal years, specifically for the maintenance and expansion of the city's so-called Homeless Management Information System, federal records show.

Some of that money went for a system upgrade that failed.

"We want to make sure that any federal taxpayer dollars that were used to improve upon their data-collection system actually do that," Sullivan said.

He said HUD officials are currently providing technical assistance to try to fix the problem, but not additional money.

"I think federal taxpayers would probably agree that we will pay for things once but won't pay for things twice," he said.

Joye Presson, chief of staff at the Office of Supportive Housing, referred the Daily News to Mayor Nutter's office. Nutter spokesman Mark McDonald declined to answer questions, including why the city would pay a vendor for a computer program before determining if it worked and whether the city is doing anything to recoup the money.

"We are working to resolve all open issues," McDonald wrote in an email late last week.

Dainette Mintz, the city's supportive housing director when the software contract was awarded, retired in January. Reached at her home last week, she said she had confidence in the vendor and the contract was awarded through a "competitive process." She declined to comment further. Marie Nahikian, who succeeded Mintz, did not return a phone call from the Daily News.

City hits a wall

In early 2013, Mintz put out a request for proposals to completely overhaul the city's existing Homeless Management Information System, and a committee reviewed the proposals.

A $659,900 contract was awarded in fall 2013 to Social Solutions Global, a Baltimore-based company that provides performance-management software, called "Efforts to Outcomes," according to city records.

Social Solutions partnered with four out-of-state subcontractors to help with the project. About a year later, before city officials knew whether the new system would work properly, the city paid off $533,256 of the $659,900 contract, records show.

By spring of this year, city officials, finally frustrated that Social Solutions and subcontractors couldn't get the computer system to work, cut their losses, according to staffers who work at nonprofit homeless-prevention programs throughout the city. Brandon Trombetta, director of social services at the Bethesda Project, which operates 14 drop-in shelters and housing sites in Philadelphia, said he received an email from the Office of Supportive Housing in early May. The email essentially stated that the city had hit a wall with the computer system and was "moving on to select a new vendor," Trombetta recalled.

Greg Johnson, chief operating officer for Social Solutions, said he could not discuss any aspect of its contract with Philadelphia. "We have a confidentiality agreement with our customers," Johnson said last week. "There is nothing else we can say at this time."

Subcontractors also remained mum, directing calls back to Social Solutions.

Clock is ticking

The Bethesda Project, which serves more than 2,500 homeless or formerly homeless men and women each year, is one of dozens of nonprofits that annually receives HUD grant money through the city. For example, roughly 60 percent of Bethesda's $5.7 million budget comes from the government, according to its website.

For fiscal year 2014, HUD awarded Philadelphia $30.8 million for 115 projects that qualified for federal homeless-assistance grant money, known as a "Continuum of Care" grant. The grant is dispersed among local projects that provide critical housing and support services to individuals and families facing homelessness.

Philadelphia, like other counties across the country, must reapply each year for the competitive grant, and data collection plays a key role in determining which projects get grant money and how much. The grant application also requires that providers show how they spent the HUD money from the prior fiscal year.

Local providers collect their own data on the homeless population they serve and then either enter the data directly into the city's computer system or submit data files that can be uploaded into the system. The city pulls the information together to create an annual HUD-mandated report, to measure the effectiveness of individual homeless programs and identify trends that need attention. HUD requires all agencies that get federal funds to have a working computer data-collection system.

HUD "is asking communities to measure how many people come into the homeless system, how long they stay homeless, where they end up once they leave homelessness," said Steve Berg, vice president for programs and policy at the National Alliance to End Homelessness.

"It's really about holding the individual programs accountable for results and letting them know when they are getting better."

HUD is expected to release its available grants sometime this summer. Once announced, local agencies typically have 60 days to submit applications, Berg said.

"I would imagine [Philadelphia officials] are under a tremendous amount of pressure if they don't yet have their system up and running," Berg said.

Laura Weinbaum, vice president for public affairs and strategic initiatives at Project HOME in Philadelphia, said she thinks the city did "the right thing" in cutting ties with Social Solutions and moving to get a new vendor, especially with the application deadline looming.

"They are right to be nervous about it because they are going to need to show data and they are going to need to do this reporting to HUD,"

Weinbaum said. "But, do I have confidence that in the end, they will resolve it? Yes. It's just a sort of question of when and how."