FY 2027 Executive Budget Hearing

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Okay, we are ready to begin. Sorry. Well, that is all. Constituents, this is the Executive Budget Hearing. This is the Oversight and Investigations portion. Are we ready to begin? I do not need to gavel again, do I?

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Okay, fine. All right. Okay.

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Good afternoon and welcome. Sorry, one second. My bad. Okay. Welcome to the FY 2027 Executive Budget Hearing for the day on the New York City Department of Investigations. I am CM Linda Lee and I am pleased to be joined by my colleague CM Shekar Krishnan, Chair of the Committee on Oversight and Investigations. We have been joined by Council Members Brewer and Riley. Is there anyone on Zoom? I do not think so. Okay, perfect.

So welcome, Commissioner Nadia Shehata, and thank you all for joining us today to answer our questions. On May 12, 2026, the administration released the Executive Financial Plan for FY 2026-2030 with a proposed Fiscal Year 2027 budget of $124.7 billion. The New York City Department of Investigations' proposed Fiscal Year 2027 budget represents 0.04% of the administration's proposed FY 2027 budget in the Executive Plan. This is a decrease of $385,066 or 0.7% from what was originally budgeted in the FY 2027 Preliminary Plan. This decrease results from several actions, primarily the reduction of vacant positions and unspent salaries. As of April 2026, head count was one less than their levy. This is levied onto a department that has lost substantial head count and resources over the last few fiscal years. Today we look forward to discussing the impact that will have on the department's operations and how we can work together to explore ways to restore the resources the department needs to carry out its responsibilities. I now want to turn it over to my co-chair for this hearing, CM and Chair Krishnan, for his opening statement.

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Thank you so much, Chair. Good afternoon and welcome to the FY 2027 Executive Budget Hearing for the Committee on Oversight and Investigations. I am CM Shekar Krishnan, Chair of the Committee on Oversight and Investigations. I want to thank Finance Chair CM Linda Lee for joining me today, along with all my colleagues who are here, in reviewing the Department of Investigations' FY 2027 Executive Budget to understand the needs of this crucial department and the role the staff play in oversight of New York City. Commissioner, thank you so much for your testimony today and for the whole team that is here as well, and for your work every single day to ensure that we root out corruption and fraud in our City government and ensure that it is performing to a high standard.

I see this Committee and its partnership with the Department of Investigation to be a powerful tool in rooting out corruption and a way to hold anyone or anything accountable that takes advantage of New Yorkers. That is vital to this effort. It is vital to ensuring we can protect New Yorkers from greedy corporations and bad landlords and to root out corruption in City government. Together we are fighting to restore trust in our government and prove to New Yorkers that our government fights for you and serves you without fear and without favor.

Over the years of the Eric Adams administration, we saw troubling amounts of corruption and misuse of City resources, and while there were a range of accusations of bribery, conspiracy and fraud, and while the work leading to the federal indictment that we saw was a crucial part of that effort, former Mayor Adams slashed the budget. I am going to be very honest about that. At a time when an agency was investigating corruption at the highest levels of City Hall, City Hall was depriving that very agency of the resources it needed to do its job. Yet it did it anyway, and it did it very effectively. With the limited resources it was saddled with, they continued and still continue to uphold their duty to hold government accountable. But make no mistake, Adams severely cut the workforce and tried to impair their ability to properly and comprehensively oversee City agencies and root out corruption. 28% of the workforce was slashed, 28%, and millions of dollars were taken away from the agency.

I deeply believe that this agency needs the funding to be able to do its job and to be the important independent arm of government that they are. I remain concerned that the Executive Budget continues to require workforce reductions for vital positions and an over-reliance on asset forfeiture funds from a years-old City Time case that will run dry, most likely in two years. It is crucial that this City budget brings in more funding and resources to correct for the years in which this agency saw a reduction in its workforce and its funding. Point blank, it needs more resources and funding to operate, to do its job and to fulfill its sacred independent mission in City government.

Additionally, this morning I joined Speaker Menin and CM Brewer in calling for an additional $4.5 million for the 9/11 investigation, so that they have the resources they need to bring accountability and answers to what the Giuliani administration knew about the air quality and the presence of toxins following the horrific attack on the World Trade Center on September 11, 2001. Having this funding in place will enable them to complete their investigation as to the knowledge of City government when it came to toxins in the air, and will allow the resources to release all the documents in regards to this investigation. We need to restore the department's head count and funding so they can continue to provide comprehensive oversight without triaging, without pulling from other staff, without scrambling for resources. An agency with the critical mission that this one has needs the tools to do its job.

I look forward to hearing about realized budget requests and working together to ensure a fully funded agency. I know the Mamdani administration and City Hall share this goal and I look forward to our Council and City Hall working together to make sure our final budget delivers on increased resources for this agency.

I want to thank our Oversight and Investigations Committee staff for their hard work: our financial analyst Owen Kukowski, policy analyst Erica Cohen and Alexi Blonde, committee counsel, and the incredible Oversight and Investigations division. I also want to thank my staff. I would like to welcome, of course, Commissioner Shehata and the leadership team here today. I am now going to pass it back to Chair Lee.

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Great. Thank you, Chair. So just a couple of housekeeping items before we start. Because of the shortened timeline for our budget hearings, we are going to have public testimony on one day, all day, so please feel free to join us. It should be fun. We will try to make it as lively as possible. So Wednesday, June 10, starting at 9:30 a.m. Wednesday, June 10, starting at 9:30 a.m. If you know anyone in the public that would like to sign up to testify, please make sure they do so ahead of time. With that, I will pass it off to our amazing committee counsel to administer the oath.

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Is the light on? Does it turn red? Thank you. Good afternoon, Chair Lee and the Committee on Finance and Chair Krishnan and the Committee on Oversight and Investigations. My name is Nadia Shehata and I am the Commissioner of the New York City Department of Investigation.

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I am honored to present. This marks my six weeks as Commissioner. It has been an exhilarating and informative time for me as I meet the impressive staff, connect with the agency's prosecutorial partners and delve into the important work that is ongoing at the agency.

As an investigative fact-finding agency, our mission is to prevent and expose corruption, fraud and other wrongdoing that undermines the City, depletes precious public resources and compromises the faith and trust of New Yorkers in their municipal government. The agency is a powerhouse, conducting both civil and criminal investigations, working with prosecutors to hold wrongdoers accountable and issuing recommendations for reforms that strengthen City government operations. The heart of the agency is its extremely dedicated staff: its administrative and operational personnel, investigators, attorneys, auditors, IT and so many more. In my brief time here so far, I have been inspired by their dedication and extremely hard work to uphold integrity and protect the City from the corrosive impact of corruption.

When I arrived, it was immediately clear that my priority needed to be digging into the agency's dire budget situation. My assessment is that the funding proposed in the Fiscal Year 2027 Executive Plan is not enough to sustain its current operations. The proposed $53.7 million budget is $2.1 million less than the Fiscal Year 2026 adopted budget and approximately $12.8 million less in baseline funding compared to Fiscal Year 2020, reflecting over $8.3 million in baseline reductions. Due to years of successive budget cuts, virtually all investigative and operational units across the agency remain severely understaffed. DOI's budgeted head count, including City tax levy and inter-city funded staff as well as employees on loan from other agencies, has dropped from 588 staff in Fiscal Year 2020 to 444 in Fiscal Year 2027, resulting in 144 fewer positions available to fight corruption, waste and inefficiency in New York City.

I have met with the Mayor's Chief Counsel and the Director of the Office of Management and Budget to outline these stark realities, and I am grateful that they took the time to listen and understand how the budget deficiencies are impacting the agency. It is not an overstatement to describe this current moment as pivotal for the agency. I am pleased to report that these discussions have been very constructive and encouraging. I am confident that City Hall shares our view on the vital importance of DOI's mandate and understands our current budget situation, including our need for additional funding to stabilize and ensure the agency can continue to fulfill its crucial oversight mandate. I hope and expect that City Hall and the City Council will properly address our need for additional funding in the adopted budget.

As City officials continue to analyze budgetary concerns and decide how best to address them, I want to be transparent with the Council and the public on the budgetary landscape. Based on the current cuts set forth in the Executive Plan, as I have been with the Mayor's Office, DOI will need approximately $6 million to stabilize its budget for the next fiscal year. This includes approximately $4.53 million to restore other than personnel services, or OTPS, funds that have been cut in prior years, approximately $1.14 million to reverse the recent 50% based vacancy reduction that was imposed across the board for all City agencies regardless of size or need in the Executive Plan, and $290,520 to fund five new entry-level investigator positions to sustain its core operations.

In addition, DOI requires an additional $4 million to conduct the investigation mandated by the City Council regarding what prior mayoral administrations knew about environmental toxins produced by the September 11, 2001 terrorist attacks on the World Trade Center. This funding will pay for a third-party vendor with specialized expertise to assist with this records-intensive investigation. The vendor would report to and be managed by DOI. To be clear, if DOI does not receive additional funding, I will need to move forward with some very difficult decisions that will have a tangible impact on our operations and ability to meet our anti-corruption mandate.

Without the additional funding, we will need to eliminate defunded lines and keep vacancies across critical areas that include executive leadership, legal oversight, frontline investigative squads and vital technical support staff. We will also need to decrease incoming salary levels for certain remaining vacancies, which also has an impact on the experience level and skill that we will be able to recruit and hire. Recognizing the challenging budgetary landscape faced by the City, the funds I am requesting are strictly limited to providing stabilization funding for DOI to ensure it can fulfill its essential operations and conduct the Council-mandated World Trade Center investigation.

At this time I am not requesting further investments in the agency to meaningfully enhance its anti-corruption capabilities. This limited funding request reflects my deep concern that further cuts as contemplated in the Executive Budget will impact DOI's core functions. This concern is not new. Under its prior leadership, DOI rang the alarm bell on its budget needs for years without avail. Citywide budget reductions have stretched this small agency, which is already running a lean operation, to its limit. Bluntly, the Fiscal Year 2027 Executive Budget does not provide the funding that DOI needs to adequately and fully meet its mission. Given recent positive discussions, I am hopeful this will be rectified in the adopted budget.

My testimony today will walk you through the proposed Fiscal Year 2027 Executive Budget, the tangible impact of the proposed budget cuts, and the roles that forfeiture and integrity monitorships play in our budget and the associated challenges with each. The $53.7 million Fiscal Year 2027 Executive Budget includes $29.3 million in personal services funds, which primarily fund staff salaries, and $21.4 million in City-funded OTPS. DOI's integrity monitorships OTPS funding will be supplemented with $3 million from forfeiture funds for a total OTPS spend of $24.4 million.

We have been supplementing our budget significantly with forfeiture funding, particularly for OTPS items such as computers, laptops, vehicles, trainings and office equipment. I will describe our forfeiture funding in more detail shortly. The current budget head count for funded employees in Fiscal Year 2027 is only 282 positions. Seven of those positions are staff for an entirely separate entity, the Commission to Combat Police Corruption, that is not part of DOI but is funded through DOI. This brings down the budget head count for funded employees working on DOI matters to just 275 positions. An additional 162 inter-city and on-loan staff report to DOI for a total of 437 employees who work on DOI matters.

The Fiscal Year 2027 Executive Budget also contains nearly $3.4 million for which DOI simply acts as a pass-through entity. In other words, these funds do not support DOI's internal staff or operations in any way. Specifically, $855,000 is allocated for the separate entity CCPC, while the remaining $2.6 million funds an integrity monitor that reports to me and is monitoring the construction of the borough-based jails. Despite these budget constraints, DOI has still sought savings as mandated by the Mayor's Office. In collaboration with the City Department of Citywide Administrative Services, we assessed our space footprint as part of a citywide...

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Space Savings Initiative and relocated CC PC from leased space at 17 Battery Place to headquarters at 180 Maiden Lane. This saved the City approximately $157,700 annually. Separately, DOI rented one of its floors at 100 Maiden Lane to the New York State Office of Court Administration, which generates approximately $1.8 million annually in lease expense reimbursement to the City. However, OMB does not credit these lease savings towards the cuts it has mandated in the agency's budget.

More importantly, so far in fiscal year 2026, DOI investigations have resulted in financial recoveries of more than $6 million that have been collected by the City. These recoveries are case dependent and DOI cannot predict from year to year how much those financial recoveries will be. But in fiscal year 2026 so far, those dollars have gone to the City's general fund.

Those financial recoveries are on top of the public funds that have been protected as a result of our investigations and integrity monitorships, such as the $5.07 million in public funds saved as part of the asylum seeker monitorship. That monitorship found an array of vendor invoicing errors that included mistaken double billing and overpayment of advanced deposits and other anomalies. We have looked for opportunities to develop new avenues to fight fraud and save the City money. Last week, Corporation Counsel Steve Banks and I engaged in preliminary discussions on ways the department can work collaboratively to recoup City funds lost in non-criminal cases, including through civil fraud cases under the False Claims Act. It is this sort of innovative thinking that sends a strong and unified message that the City as a whole is standing up to address corruption and fraud on all available fronts.

In the Executive Budget, OMB has imposed $1.06 million in one-time cuts in fiscal year 2026 and $1.14 million in baseline cuts starting in 2027. In fiscal year 2026, the Executive Budget cuts $500,000 in funding for the vacancy reduction mandate, reducing DOI's budgeted headcount by 11 in the baseline. It also cuts $550,000 in a one-time cut as projected by OMB, as well as $15,691 in a one-time savings for heat, light and power. In fiscal year 2027, the Executive Budget cuts $1.14 million in baseline funding for the vacancy mandate.

To meet these cuts, DOI will have to defund and defer hiring for nine positions to satisfy the 50% vacancy reduction mandate, including critical senior-level investigatory and legal positions. This action will further deplete investigative and operational squads across the agency. DOI will also have to forgo essential staffing made as part of our prior new needs request to OMB, specifically the restoration of 14 vacant positions at $1.4 million. DOI previously utilized the funds for these positions to offset serious recruitment, hiring and retention challenges caused by prior budget reductions and the City's 2-to-1 hiring limitation.

We will also need to forgo a request for 17 baseline positions for investigative and operational staff that include data analysts, confidential and background investigators and auditors, among others. In fact, DOI has already reduced this request to five entry-level investigators in our most recent new needs request for the adopted budget.

In addition, DOI requested funding for the mandated World Trade Center toxins investigation, which OMB deferred to the incoming administration's review. A request for $4 million for this investigation has been resubmitted for consideration in the adopted budget. Until necessary funding is secured...

With respect to forfeiture funds, federal and state law allow the profits of criminal activity to be forfeited to the government and shared with the investigating agencies that worked on the case, with the general guideline that these funds must support law enforcement activities. The majority of DOI's forfeiture funds are the result of partnering with federal prosecutors on criminal investigations, and there are specific Department of Justice rules that dictate how forfeiture funds may not be spent. For instance, forfeiture funds may not be used to fund salaries for permanent staff positions but may be used for training or law enforcement technology. Specifically, the guidelines require that forfeiture funds supplement, not supplant, DOI's budget. Importantly, the City is prohibited from making budgetary decisions based on the availability of federal forfeiture funds. In other words, the City cannot decide to cut DOI's budget based on the amount of forfeiture funds DOI receives with the expectation that forfeiture will cover the budgetary gap. Most importantly, if the City were to consider federal forfeiture funds in determining DOI's budget, DOI per the guidelines would lose its access to the funding.

Over the last several years, DOI has reprogrammed federal forfeiture funds, all in accordance with OMB-mandated budget cuts from the City, specifically related to OTP items such as updating the agency's computer systems including our case management system as well as purchasing computers and laptops for agency staff. Since fiscal year 2023, DOI has spent nearly $19 million by reprogramming its forfeiture dollars to supplement its budget and support the agency's essential law enforcement operations.

In fiscal year 2026, DOI plans to spend an additional $11 million by reprogramming its forfeiture funds in accordance with the guidelines. But this type of reprogramming is not sustainable in the long term because forfeiture funds are finite and there is no way to predict how much forfeiture funding will come in in the future from our investigations. Again, it is not permissible for the City to make budgeting decisions based on the availability of forfeiture funds. Put simply, the City must start to properly fund DOI before these funds run out.

To reduce reliance on forfeiture funds, DOI has requested approximately $4.5 million in OTP restoration in the adopted budget to pay for core critical needs such as computer software maintenance and subscriptions and maintenance of DOI's cybersecurity and data storage networks, which are technology items that should not be deferred.

DOI's integrity monitorship program is a cornerstone of the agency's anti-corruption work. Integrity monitorships allow the City to have real-time oversight of vendors with integrity issues and of large-scale, high-dollar City projects. The oversight is provided by outside integrity monitors that report to and are managed by DOI. Rehabilitative monitorships permit the City to enter into or to continue contracts with companies that might otherwise be precluded from doing business with the City due to identified integrity issues, but that City agencies have determined are necessary for continuity or provision of City services. In these cases, vendors pay for the monitorships.

Programmatic monitorships proactively help the City to oversee large-scale City projects such as the asylum seeker initiative and the borough-based jail construction, with the goal of ensuring compliance with City regulations and realizing cost savings. In these cases, the City pays for the integrity monitors. The funds for these monitors are included as part of DOI's budget, but all of the money goes directly to the integrity monitors. None of it supports staffing or resources. Significantly, this funding artificially inflates DOI's budget, lending the false impression that it supports operations and staffing.

Today's testimony underscores the significance that budgetary independence would have on DOI. In fact, reform, among others, before the City Commission...

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...to strengthen local democracy, which compiled a host of prospective Charter revisions including budgetary independence for DOI. DOI plans to submit the same proposal to the Mayor's Committee on Government Efficiency, which was just announced last week. Funding DOI by an appropriate percentage of the City budget and giving DOI control over its hiring, for example, would safeguard DOI's independence and reinforce the City's commitment to prevent fraud, waste and abuse. Budget independence would reduce the risk of politically motivated retaliation against DOI, or the appearance of such retaliation, by reducing our funding. It would finally provide DOI with the financial resources to fully oversee a City with a $124.7 billion budget, more than 300,000 employees and billions of dollars in capital construction.

In the meantime, DOI requests the City restore $6 million to its budget in order to maintain the agency's core operations and $4 million spread over two fiscal years to fund the World Trade Center investigation.

I want to thank the Mayor's chief counsel and the budget director for hearing and understanding my concerns. I am very thankful as well as hopeful that additional funding to stabilize DOI's ability to conduct its vital oversight mandate is under active discussion and consideration at City Hall. I also want to thank Council members for your focus on the budget and for providing me the opportunity to walk you through the numbers. I am happy to answer any questions.

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Thank you so much. We have also been joined by CM Avilés and CM Carr. Let me just ask — out of curiosity, and I know this is something that CM Brewer had worked on also — why did you try applying through the waiver? Why did you not get the waiver if you applied for it?

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The waiver from the savings? Yeah.

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We did, we did, we did. I mean, you did? Yes.

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Okay. What was the reason that they said no?

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I believe some of that happened before I joined DOI, so I am not sure what reasoning was provided, but we were not exempted from it.

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Interesting. Okay. Yeah, I mean, just given the cuts that have happened to the department and looking into the future, just wondering how we can prevent this from happening, because it is a City agency that does generate revenue for the City as well. So this is why I am just wondering if there are any ways that you are looking at...

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...to protect staffing from this sort of budget cut in the future. Not budget cut, but yeah.

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That is why we would welcome changes to the City Charter that made our budget truly independent, because this concern happens every year. Given the important oversight mandate that we have, we believe budget independence is the best way to ensure that we are funded properly.

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And just going to the savings portion — looking back at previous investigations the department has done, can you provide an example of how DOI's investigations have saved money for the City? Sure.

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As I mentioned, in fiscal year 2026 to date we have collected $6 million in restitution for the City. As an example, in October 2025 a defendant was ordered to pay $1.6 million in restitution after he inflated invoices and overbilled the City in contracts relating to repairing and maintaining fire alarm systems. That is just one specific example of how we bring back money to the City, and that goes into the City's general fund.

In other non-quantifiable ways, I think we also save the City money by deterring corruption through our oversight. The asylum seeker monitorship is one way where we are actually able to quantify it, and there we identified about $5 million in mistaken overbilling that the City was able to recoup.

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So $5 million in the asylum seeker contracts? Interesting. I am sure there are a lot of others. If you can also provide other examples, that would be great in terms of...

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Yes, we can certainly get back to you on that. Okay, good.

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I think it is important to note because this is exactly why these positions are important. So I am just trying to understand some of the headcount reductions. Can you also produce a list of titles you believe work to accomplish savings for the City and work with the administration on exemptions as well?

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Yes. In response to that I would say I believe the entire investigative division of DOI is revenue-generating in the sense that these are the people conducting the investigations where we get restitution and forfeiture for the City, and also working to prevent corruption through our policy and procedure recommendations. That includes confidential investigators, auditors, financial analysts and so forth. Okay, great.

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And then moving into headcount reduction — the Executive Plan included a headcount reduction of 11 positions. What vacant positions are being removed in this plan?

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If nothing changes and we are required to move forward with cutting 11 vacancies, a few of those will be vacancies that are already defunded. But it will require us to cut nine funded vacancies, or currently or previously funded vacancies. This presents some very difficult decisions on my part because we currently have, for example, three important vacancies at the executive level. We are currently operating with an acting general counsel and an acting chief of investigations, and we have also recently had the person who was filling the role of deputy commissioner for compliance — who also served as our ethics officer — recently leave. So that is also a vacant position.

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Can I just ask a clarifying question? So when you said nine funded vacancies, those are not positions that are currently staffed. Those are vacant but were previously, before the Executive Budget came out, funded positions. Got it. And so we will not be able to hire for those nine positions.

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Right. We are currently trying to maneuver and we have various scenarios of how we would do that. But if we were required to go forward, that may, for example, include simply not having a deputy commissioner for compliance and putting all of that person's responsibilities in other areas, as is currently being done temporarily now. But that is obviously not a decision that I would like to have to make, and I am hopeful that we can avoid that through the budget.

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And how — I mean, I know the answer, but if you could give more details in terms of what kind of impact this is going to have on the investigations that you are conducting. And then I have a follow-up question after that.

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I will start by saying that since I have been here the past six weeks, I have been incredibly impressed by the hard work and dedication of every single staff member I have met with. That being said, for years they have been asked to do more with less, and that takes a toll on morale and frankly on the ability to make sure you are properly staffing every investigation you are working on. They have done an amazing job, but at a certain point you get to a point where triaging is no longer sufficient and you have to make decisions about what investigations you can and cannot open.

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To that point, I mean, obviously we would want to see a restoration of a lot of the positions in the budget. But let us just say that does not end up happening unfortunately. What is the plan B that you have? Are you leveraging staff from other agencies to assist with the investigations and have those conversations started?

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Yeah, so we are. We always, as...

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...a general practice in our investigations, one of the things we do is present cases to prosecutors' offices for our criminal cases early so that we are maximizing the resources we have available. Generally those prosecutors' offices also have investigators and we are working with law enforcement partners at the state and federal level, so that is something we are doing now and will continue to do. We do have loan staff from other agencies. The number of those is generally governed by a memorandum of understanding with those agencies and we have those in place. But if we are required to make these cuts, then we are going to be required to make some very difficult decisions that I am concerned will affect core...

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...operations. Yeah. And obviously, on the Council side, when we have been talking about savings, we want to make very clear that this is not something that we want to see as a negative when it comes to actually doing the work and providing services. So this is helpful to know. And the $6 million to stabilize the budget for the next fiscal year — is that sufficient? What is the ideal number?

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That is the stabilization number. We are cognizant of the financial and budgetary conditions that the City as a whole is facing, and so we have really tried to focus on what is necessary to keep our core operations going and not to ask for more than that at this time. That is where we have come up with the $6 million number — so as to not have to defund nine vacancies and also to start to get on a path where we are not over-relying on forfeiture funds for our basic operations, as well as a minimal request for five entry-level confidential investigators to start helping stabilize our investigative squads. And just lastly...

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...before I yield to the chair, in terms of the lease — I know that you said the move saved approximately $157,700 annually, but what is the total portion of the department's budget for the lease? Can...

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...you update us on that cost? Yeah, I do not know the exact percentage because I am not very good at math, but it is about $18.5 million for the lease. So the vast majority of our City tax levy OTP is spent on the lease and one integrity monitorship for the next year.

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After that, we have about just a few hundred thousand dollars left to operate the agency, which is why we have had to repurpose forfeiture funds to allow us to fulfill our mission. Okay. And then are there areas like with technology and all of those things in the OTP lines that you would be able to centralize with the admin in terms of leveraging with other agencies to save costs there for your department, sharing of resources?

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I would have to get back to you on some specifics on that. I know that because of our independent oversight mandate, there are some aspects of our work that we need to make sure are not accessible to other agencies. But certainly where there is an ability to do that, we are happy to look into that.

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Okay. And lastly, are the costs for the lease separated out when coming up with the dollar value of expected savings? I am sorry, could you rephrase the

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question? So let me... basically, how has the lease been included in your budget and what impact does it have on the other areas that you would potentially be able to use it for?

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Well, the lease is part of the PEG, and so that actually

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makes the PEG much more difficult for us, because the lease is not excluded from it, and that is the largest part of our own... interesting. Okay.

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Okay, I am going to pass it to CM Krishnan. Thank you.

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Thank you so much, Chair. There were just two points before I start my questions that I wanted to really agree with you on. I think one is it is time that the City properly fund DOI so that funds do not run out and you can walk into your mission. I agree with that completely. I also know that there is a fundamental conflict between an agency tasked with a very independent mission being dependent on a City budget and budget process that changes year to year with the Mayor. So I fully support looking at ways that we can, going forward, reform the Charter to make sure you all as an independent agency have an independent funding process.

Charlie hit a number of the points and questions, but I wanted to clarify a few things. There is a lot of information and I want to really just underscore the critical need for funding that you all have. So it is my understanding, Commissioner, that

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you all need $6 million in funding in this year's budget just to stabilize. That is not new needs, that is not new programs. That $6 million is to stabilize current operations and current staff on payroll. It is just under $6 million. Included within that is five new investigators — entry level investigators — but that is really to stabilize things currently. That is right.

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Okay. And currently the Executive Budget, I think you mentioned, has less than last year's budget. Is that correct? Yes, I believe so. And less than baseline funding going back several years at this point, taking into account the PEGs from the Adams years and everything. Yes, that makes sense. Okay. And then in total, really what we are talking about is that you all have a staff of 275 positions at this point, which is down from about 365 four years ago. Is that right?

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Yes. Down from 365 four years ago to 275 over the course of the last administration as a result of the PEGs over those years. Yes. Got it.

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And is it your testimony that after all funds are accounted for, including this lease that we have as well, how much exactly are you all left over with if you do not include asset forfeiture funds?

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Historically I think it has been about $175,000 to $200,000. I think for fiscal year 26 it is a little bit more than that. I believe it is $400,000 because we did get some additional money for police obligations and I think moving CCAH to our headquarters.

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So just a few hundred thousand dollars. So just to be clear, after all the fundamental basic needs are taken care of, the agency only has between $175,000, give or take, to at most $400,000 to run operations. Yes. And how much are you all planning to draw down from asset forfeiture funding for fiscal year 26 and fiscal year 27 to supplement but also support core operations, given the very little funding you will have left over?

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So we anticipate for fiscal year 26 it will be approximately $11 million. We have $3 million currently dedicated as a forfeiture spend for fiscal year 27. But if we do not... we expect that to go up, and particularly if we do not receive additional City tax levy OTP funds.

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And if that is the case, at what point do you foresee the asset forfeiture funding running out completely? Because as I understand it, it is coming from one specific case from many years ago.

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If we continue at the current rate of spend, it is approximately two to three years at the very outside — in the two to three year range, so two years.

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I would not have expected the forfeiture funding to supplement and support core operations based on the current amount of forfeiture funds we have. And all you have left at that point is several hundred thousand. Assuming nothing changes, all you have left to run the entire agency in two years would be the several hundred thousand dollars in funding that you have left after fundamental payments like rent and things like that. Am

(00:45:49)

I right? That is correct. So another point — you testified as well about the current cost savings mandates, and you

(00:46:05)

spoke about the vacancy positions and other business. Can you just give a total amount of — with the cost saving mandates in place and the PEGs over the years that have happened and the cuts that have occurred — in total, how many positions are going to be affected by the efforts to meet the cost saving mandates in place?

(00:46:30)

And I can tell you that you are looking at over nine positions, coming to a total

(00:46:33)

number of how many positions would be affected in one way or another. Well, we would have to

(00:46:38)

cut nine. So currently, before the Executive Budget came out, there were nine positions that we would have been able to fill that we will now have to cut. And as I mentioned, this is particularly challenging right now because of the vacant positions. We have some critical positions in executive leadership and very important positions, including for the NYPD unit, that we are trying to figure out how we will manage if we do not receive additional funds.

(00:47:17)

Nine positions affected. And then if you all do not get the $6 million to stabilize, how many positions overall would be affected? Is it just the nine or are there others? I think you mentioned as well there would be potential cuts to salaries and executive positions. How many? What are we talking about overall in terms of the impact of not getting the funding?

(00:47:41)

Well, I think what we would do is the idea of lowering the salaries for certain positions is in order to try to minimize the number of vacant positions we have to cut and yet still meet the target number. I do not have a precise number for you of how many positions we would have to address. We were going through different scenarios. But I will say we are hopeful, based on our discussions with City Hall, that we will not have to make some of these decisions, because we are hopeful that additional funding will be provided in the adopted budget.

I want to go to the second point, but the point I am trying to make is it seems to me that it is beyond the nine positions that would be affected. It seems to me that in order to avoid cuts to those in those positions, a number of other positions and those salary lines could potentially be affected too. Am I right? Potentially, yes, and I would say the whole agency would be affected

(00:48:36)

because we would be asking our dedicated and talented staff to again be doing more with less and working on higher caseloads and just being required to conduct more investigations with fewer staff. Thank you. That is kind of what I was getting at. It seems to me the whole agency in one form or another would be affected.

So now at this point, how have the conversations been? I think you indicated there have been some positive conversations. But how have they been with OMB and the Mayor so far? I think as much as you can share, give us a sense of what trajectory we might be looking at from the Executive Budget.

(00:49:21)

So I do not have any specific numbers to share with you. What I can say is that the Mayor's Office understands the situation we are in. I have spoken plainly about it here at the Council and I have spoken about it in the same way with the Mayor's Office. I believe they understand the importance of DOI's mandate and mission and the challenges we are facing. I am confident that they will address it in the adopted budget, but I do not have any specifics

(00:50:01)

to share. And so we are looking at right now roughly 275, down from 365 before. What do you believe would be the appropriate headcount and budget needed for your organization to run seamlessly?

(00:50:18)

Well, to run seamlessly... look, I am happy to talk a little bit about a process that the agency underwent under the prior Commissioner, where as part of the work to provide a proposal to the Commission to Strengthen Local Democracy on the Charter revision proposals — which included a minimum budget — and as part of that process, a planning exercise to estimate optimal staffing levels for the Department, going unit by unit to project an ideal staffing number. The projected ideal for investigative staff was 412 positions, for operations staff 98 positions, and for executive and training staff 48 positions, which would bring the total funded headcount to 585.

I am not expecting in this budget landscape that that is something we could realistically expect. If our new needs request is approved for the adopted budget, our core headcount on funded lines would be 318 funded positions. If we factor in 142 on-loan personnel paid for by other City agencies, our total budget headcount would be 460, if our needs request is

(00:51:51)

accepted. And it seems to me — would you not agree — that right now the current headcount, give or take, is about half of where you all would want to be ideally? 275 versus the 585 that you indicated. It seems like, given all these cuts over the years, we are about halfway from what you would fully need at an ideal level to fully fund the agency. Yes. Would you agree?

I think you touched on this before too, but when we talk about your agreements with City agencies as you do work and share resources, when MOUs are up for renewal, how do you make sure that shared resources are stable and not reduced by agency savings exercises?

(00:52:38)

Well, there is no mechanism to force agencies to provide us with a certain level of resources or to not cut the resources they share with DOI as part of their savings exercise. We rely on explaining the importance of DOI's achievements and the productive relationships we have fostered with the relevant agencies to make our case. I would suggest that a more stable way to manage DOI's resources would be to provide the staffing and resources directly to DOI's budget and not have to rely on discretionary MOUs.

(00:53:14)

Right. And are there a certain number of positions — a minimum number — that other departments are obligated to fund? Have there been reductions in the MOUs for the allowable staff that other departments are obligated to fund? And is there no way at all to protect that? There is no minimum number, no sort of requirements on other agencies to obligate them to fund certain positions or work with you all to make sure they are funding in some capacity?

(00:53:40)

So there has been one MOU where we had a reduction in headcount. That is the MOU for staff who monitor the two water projects upstate. There was a loss of two headcount there, but that was attributable to workflow and not a budget consideration. In other MOUs, for example with DOHMH, we have thankfully not seen reduced headcount. But it is worth noting that the intra-city funding they give us has not kept pace with the actual salaries paid to the employees. Therefore, in certain cases DOI has had to supplement the intra-city funding with our own dollars to meet the required salaries. To give you an example, one staffer funded through the HHH MOU makes $223,000, but we only receive $95,000 in intra-city funds. Another staffer is at $85,000, so DOI has to make up that difference out of our own dollars.

(00:54:53)

And a few other questions before I hand over to our colleagues. We touched on this a bit before, but when positions are affected — whether it is vacant lines or existing positions — it does not seem to me, and as you testified, the impacts are much broader than the specific number of positions on the table. It could actually affect staff retention more broadly speaking. Does the Department have the funding to promote staff? Are there opportunities for promotions and increases in salaries? If not, are these requests you are working on to explore how to achieve that goal? How do you think about staff retention more

(00:55:40)

broadly? I agree with you that promotion and growth opportunities are essential for hiring and retention. At this point we do not have the funding to promote staff, and it is my understanding that OMB does not approve merit-based promotions and raises.

We have 25 vacancies as of May 27, 2026. However, we only have funding to support 16 of those vacancies. In the past we have made requests to OMB for additional funding. The past administration made such requests for promotions and staff retention and we did not receive any funding from OMB. All of our retention efforts that have been made have been self-funded by reallocating resources from vacancies. In the last administration, even though we did not receive funding for these efforts, the approval to be able to use our existing funding still took over a year to receive.

We identified several years ago that significant attrition in our investigative ranks was largely due to an absence of a path to promotion and salaries that are not competitive with other public sector opportunities or the private sector. As a result, we implemented a plan that gave raises and promotions to individual confidential investigators based on merit to appropriately reflect each of their levels of experience, responsibility and performance, and to address pay disparity among our Deputy Inspector Generals, all of whom generally did the same type of work, had similar expertise and performed at comparable levels, but were paid at different salaries. We created a clear promotional path for investigators. But again, in order to do that we had to repurpose funds from vacancies, so we did not receive additional funding for that. Clearly it is an issue and we have tried to address it, but it is going to continue to be a serious issue and we do not have additional funding to continue to be able to address it.

(00:57:57)

It is very concerning and I think, for lack of a better word, it seems like the agency is robbing Peter to pay Paul — in other words, pulling from one area to keep staff and pay for increased salary needs in another. That is not an inaccurate characterization. I think that is a good way of putting it. So what does OMB approve or not approve regarding merit-based promotions or pay increases? It sounds like just the transfer of money from one part of the agency to another to fund some initiatives?

(00:58:28)

That is, I believe, what happened in the past administration. Approval for promotions and raises was not provided, and then approval was sought to use funding from existing vacancies to repurpose that for promotions and raises. And I think the point is well made that it does not allow the agency to remain competitive. These are positions where you are competing with many other parts of the legal sector and the investigative sector. It really raises serious questions about how you remain competitive if you cannot pay well and cannot promote your staff.

(00:59:08)

Just on that note, I would add that in an effort to provide

(00:59:12)

training opportunities for our investigative staff, we developed an in-house investigative officer training program known as IOTA. It allows investigators to become certified peace officers and trains them on investigative tools. It has been a very successful program that has resulted in highly trained entry level investigators once they have gone through that program. Because we are not able to fund raises and promotions, what we often find is that these investigators that we have spent time and effort training are then, after a short amount of time, being hired by other federal and state agencies. That is also a challenge where we are investing appropriately in ensuring we have staff capable of conducting the important investigations that we work on, but because of the funding issues we are often not able to keep that staff long term.

(01:00:26)

Right. My last two questions: DOI publishes excellent reports that uncover a lot of issues when it comes to corruption, accountability or compliance with the laws that we have. As we heard at an earlier hearing earlier this year, your sanctuary report on the compliance of city agencies with sanctuary laws and NYPD was very helpful. I imagine that you, coming in as new Commissioner, will want to continue publishing reports, perhaps publish more reports. Do you see that being affected by the lack of funding if funding continues at this level and you do not receive an increase? Do you see an ability to continue, or even increase, the amount of reporting you all are doing?

(01:01:07)

Well, first, I agree that public reports are incredibly important and I think overall transparency is incredibly important. I think it is integral for us to be letting the public know what it is we are working on, what our investigations have found, and to make policy and procedure recommendations to improve the functioning of City government. I do intend to prioritize the publication of public reports. But as with everything else, it is affected by the budget and the funding we receive. Public reports in particular are time-intensive efforts and when our staff is cut, that provides less staff to work on everything, including issuing public reports.

(01:02:04)

And my final question, and I am sure CM Brewer will ask more about this too. We have got a budget request for about four and a half million dollars for the 9/11 investigation. If that money is not in the budget, do you see your ability... will you be able to complete the report? Will you be able to finish the investigation or even hire the outside vendor you had in mind? What will happen if that money is out of the budget for this critical investigation?

(01:02:32)

So first of all, the good news is I think we can do it for a little bit less. We can do it for $4 million. That is the best and final offer we received from the vendor. So that is what we have requested in our new needs for the adopted budget. It is $4 million. But without that funding... to try to get to the four and a half anyway using the money for other things, okay, we will take it. But without that money, we will not be able to conduct that investigation and we would like to receive that money so we can get to work. Thank you, Commissioner.

(01:03:03)

Thank you, Jeff.

(01:03:03)

Sorry, just really quickly following up on that. Is there a way to... I do not know what the legal parameters are around this, but is there a way to do public-private partnerships, either with other law firms, or have MOUs in place to be creative when thinking through the cost?

(01:03:19)

I will have to get back to you on that. I do not have the answer off the top of my head.

(01:03:24)

CM Brewer, followed by CM Joining. Now you do not trust the other law firms. I will just...

(01:03:29)

Tell you, first of all, thank you and thank you for your testimony, because most people do not say they need more money and we appreciate your honesty. I feel very strongly, as I think my colleagues do, that it is important. I want to thank the Speaker and everybody who made today's hearing possible. Before we get to the many questions about the funding, what I would call the resolution for 9/11, but also, you know, things like FIFA are coming up now.

(01:03:58)

That is going to be fast money out the door. That would be something. Will you be looking at that as an example of something where you need more staff to pay attention?

(01:04:08)

You know, we are always looking at any time the City is spending money on an expedited basis or an emergency basis. Those are always areas where the risk of corruption and waste is often the highest and so those are areas we do look at.

(01:04:24)

OK. FIFA, and then also, are you still working on NYPD monitors? Is that something you are still looking for a new head on, or has that been secured?

(01:04:35)

We are in the process of hiring for the NYPD. The position has been posted. We have been reviewing resumes that we have received and we will begin the interviewing process shortly on that.

(01:04:43)

Reviewing resumes that we have received and we will begin the interview...

(01:04:48)

Interviewing process shortly on that. Great. Congratulations.

(01:04:51)

So I obviously passed a resolution at the City Council to have 9/11 information available to the public and we could not find any other way except this wonderful opportunity for DOI to do the work. I said from the very beginning, no matter what we do, we need you and your team — the people you are going to hire, hopefully with this $4 million or $4.5 million — to do the work, because the only agency that came through, as you know, was the Department of Environmental Protection, and those boxes... I went through some of them. I appreciate that that happened and I happen to know that those boxes only came about because the Commissioner at the time said, "Find them." They were lost, they could not put them together, and originally people said they could not find them.

Well, this Article 78 is very interesting. To the credit of the 9/11 Health Watch, they went to court and they won on Article 78, because — and I have great respect for the head of the Law Department — his FOIL people said they had no boxes. Well, we know that there are boxes. We know, for instance, that in the archives of a very special reporter who was a friend of all of ours in Texas, we found a letter, a memo that was sent to Bob Harding. So we know there are boxes. We know this information exists. For whatever reason, the folks at the Law Department cannot find anything, which I do not believe.

So my understanding is that the City of New York rarely loses an Article 78 proceeding. In fact, I do not even know if there is a prior example of losing one, at least recently. An Article 78 with an order of discovery against the City of New York, in addition, regarding an Article 78, is very, very unusual. So I would love you to comment to see if I am correct that perhaps the only way to get this information is to do the kind of work that I hope you would be able to do if you get the funding. I just was wondering if you could comment on the Article 78 and the discovery and the fact that this is the only way to get this information.

(01:07:04)

So I am not prepared to comment on the Article 78 proceeding, but I will say that as part of its efforts to be prepared to conduct the 9/11 toxins investigation once the funding is secured, one would expect to have the type of records that would be relevant to the investigation. We have received responses from those agencies and so we are aware of where the relevant records should be located. Once we have the funding to begin the investigation, the process of fully accessing those records — some of which may be in systems that require technological issues to be addressed because they are old systems — to compile that information and start to go through it and to investigate the matter that you all have asked us to, we are ready to get that started. All we are waiting for is the funding.

(01:08:03)

The matter that you all have asked us to... we are ready to get that started and all we are waiting for is the funding. Do you have any sense from the company or from past experience how long it might take to do this work?

(01:08:21)

I think the initial plan, had we been funded initially when the Council mandated that we conduct this investigation, was to complete it within two years. I think that is the timeline we are looking at. Since almost a year of that has gone by now without getting the funding, I think we will need two years from when we get the funding. But that is the goal and I think it is achievable.

(01:08:46)

Okay. And also, just on a sort of additional issue, I am concerned about the fact that the FOIL staff stated that they had no records. Do you have any sense, maybe from past experience, why or how we could improve the FOIL system? Now there is, at the Department of Records, a dashboard and there is more information about FOIL in general, but it does seem to me that there needs to be a better system for FOIL. Do you have any sense of how that...

(01:09:19)

...should work? I do not have any recommendations right now about FOIL. I can tell you that when I was in private practice I filed some FOIL requests, so I understand the frustration there and I think that would be an area that can be looked into.

(01:09:39)

It is a very important area, of course. That is what I was trying to hint at, so I appreciate that you have that interest. In addition, I also think that there are... you know, this would be a wonderful example, if we get the funding — which I hope we will — to state that the Department of Investigation has full capability of doing what would probably be challenging and complicated investigations. This would be an example and this is the way that we should be looked at for the future, because if there is not only waste and fraud, there is also better government.

I have a feeling — I could be wrong — that there are a whole bunch of boxes and records around the City that are in different warehouses that need to have some kind of organizational improvements, shall we say. So I am hoping that in addition to this, that also comes about. There have been several warehouses recently and, oh my goodness, nobody knows exactly what is there. So I think this would be a good example to try to use for others.

And then just finally, I just want to agree with my colleagues: you need the funding to be able to do the work that you have been assigned. Without the funding, you cannot do it. I have to say that we did, some years ago, take some of your staff who came to the City Council as investigators and they are fabulous attorneys and they are fabulous. You trained them very well. Your agency trained them very well. You do need to retain staff. That is a complicated job, to be an investigator and to do it well, so it is very important.

So I am just here to say we are all going to fight for the money for this particular 9/11 investigation. I think that the fact that the Article 78 was won is the perfect example of why we need to do it, because obviously the City has not done their job in terms of responding to the FOIL. That is a huge win for the 9/11 Health Watch. Thank you very much and I look forward to making sure that this information is available to the public. Thank you.

(01:11:46)

Thank you, CM Joining. Thank you, Chair, and very nice to meet you, Commissioner, for the first time. I think your role is very important and also the money the City spends on efforts to root out corruption for New York City... I have seen the reports before. New York City is spending roughly $81,000 per person on homeless services last year. Are you doing any investigation on this issue? Is there really a need for that money? I do see some developers in the community — a developer or lobbyist personally came to me and said, "We give this much money." I see there is corruption there and a lot of people in New York City have a question mark in their head: why, how is so much money spent on every single homeless person? We want to help a homeless person, but why is it such $81,000 a...

(01:13:07)

...year? It is a median family income a year. So it does not make sense to most people how much the City is spending the money, how they spend the money, is there any corruption there, are those homeless people really getting helped? I just want to draw attention to this issue because it is a lot of people's concern.

(01:13:32)

Thank you for raising that. It is certainly an area where historically we have investigated and put resources toward and issued public reports, including on some of the issues surrounding shelters, and issued recommendations on how to improve in those areas. It is certainly something we have looked at and we will continue to look at.

(01:13:56)

Thank you. And then the public really does trust your work because it is not your appointment only from the Mayor. It is also...

(01:14:06)

...public trust. Absolutely.

(01:14:10)

Thank you. Okay, great. I think with that it concludes our budget hearing with DOI, and for the day actually. So I want to thank you so much, Commissioner, for coming out to testify and for your team being here. Thank you so much. That concludes our hearing for today. Thank you.

(01:14:35)

Thank you. Thank you.