Contracting Trust in NYC: MOIA, City Council, and Overseeing Pro-Immigrant Services

Introduction

In an era where cities shoulder an increasing responsibility for immigrant service provision, local agency funding and monitoring reveals as much about democratic accountability as congressional oversight patterns. The preliminary hearing for the fiscal year 2026 (FY2026) budget of the Mayor’s Office of Immigrant Affairs (MOIA) in New York City was no different. Despite tough questions and flailing answers from MOIA personnel, the hearing reveals how political offices like MOIA navigate the oversight process amidst a variety of stakeholders like legislatures, nonprofits, and immigrant communities. This budgetary hearing launched a variety of responses from members within city governance and beyond. On the one hand, many people in City Hall disregarded MOIA Commissioner Miguel Castro’s brief remarks and verbal acrobatics that left most questions unresolved. But many others pointed to the glaring evidence—surfaced in the hearing—showing MOIA’s inability to meet its mandate and failure to help immigrant New Yorkers whose livelihoods are under threat. How, then, can the issues in MOIA’s programming and service delivery be resolved? What political theories are available to propose reform? Through the lens of congressional oversight theory—specifically the “fire alarm” and “police patrol” models proposed by McCubbins and Schwartz—, this paper undertakes those questions in detail. It also frames later analysis in two primary segments: oversight theory and government contracting. Studying MOIA’s budgetary allocations and interpersonal interactions during the hearing reveal different patterns of oversight that employ both fire alarm and police patrol frameworks. Oversight for MOIA within city council functions through a hybrid structure that borrows from both McCubbins and Schwartz’s theories.

This, however, seems to depend on what type of work MOIA is budgeting for: contracted or in-house services. MOIA’s budget for contracts with community-based organizations (CBOs) and nonprofits differs in scope from their in-house personnel costs—like salaries, also called “lines.” This facet of MOIA’s oversight relates to Schleifer’s economic theories about privatization as well as Levin and Tadelis’ work on the “make-or-buy” tradeoff in US cities.

This paper argues that MOIA maintains a hybrid oversight model with city council that is greatly disadvantaged by the amount of contracting MOIA allocates in its budget. The inherent inability for city hall to monitor performance of these contracts is precisely because the types of services MOIA wants to contract—for legal services, language access, and community engagement to name a few—are fundamentally noncontractible. Consequently, this paper argues against the privatization of immigrant support services and affirms that the transformation of MOIA into a city agency with more direct potential for oversight would greatly enhance the efficiency, accountability, and delegation of these essential services. This article begins first with the theoretical frameworks used in this analysis followed by a brief background on MOIA and New York City’s immigrant policy landscape. It then shifts to put these theories into practice by examining MOIA’s FY2026 budget before discussing these results in depth. I conclude with recommendations for reform and the implications of this research in a larger context.

Theories of Bureaucratic Oversight and Contractibility

Central to this analysis of the MOIA FY2026 budget and oversight in city hall are the theories of bureaucratic oversight that contextualize the elements—procedural and interpersonal—of the hearing studied in this paper. McCubbins and Schwartz (1984) provide two key models of oversight that are most relevant to this paper. Firstly, police patrol oversight is “comparatively centralized, active, and direct ”(McCubbins and Schwartz 1984, 166). Congress typically examines a “sample set of executive-agency activities, with the aim of detecting and remedying any violations of legislative goals” (McCubbins and Schwartz 1984, 166). Surveilling these actions allows congress to discourage violations in the long-term and can be conducted through a variety of means, including hearings. Secondly, fire alarm oversight relies on third-party actors—constituents or interest groups—to alert legislatures about agency failures. It is less centralized and involves “less active and direct intervention than police-patrol oversight” (McCubbins and Schwartz 1984, 166). Congress instead establishes “a system of rules, procedures, and informal practices that enable individual citizens and organized interest groups” to do a variety of things (McCubbins and Schwartz 1984, 166). These include:

1. Examining administrative decisions;
2. Charging executive agencies with “violating congressional goals;”
3. Seeking “remedies from agencies, courts, and Congress itself.”(McCubbins and Schwartz 1984, 166)

McCubbins and Schwartz are also careful to note that the primary difference between these oversight frameworks is not drawn between paradigms of “formal” and “informal” oversight. These paradigms have more to do with how salient or primary oversight is purported as the main purpose within oversight activities. In that respect, both paradigms can involve elements of formal and informal oversight (McCubbins and Schwartz 1984, 166). McCubbins and Schwartz also make three main assumptions that underly their frameworks of oversight. Their technological assumption allows Congress—when deciding how to structure the oversight mechanisms they implement on non-congressional entities—to pick either police-patrol, fire alarm, or a combination of both oversight approaches that involves making tradeoffs. These tradeoffs—during a mixed approach—happen when Congress is writing legislation or evaluating performance of an agency. The second scenario during which Congress is assessing agency performance will become most relevant to this paper. The other two assumptions in the literature suggest that (1) whenever possible, congresspeople want to take as much credit for the net benefits of their actions and that (2) executive agencies act as agents to Congress (McCubbins and Schwartz 1984, 166).

Writ large, these assumptions cohere well to the functioning of MOIA and the City Council, but the exact alignment of these congressional examples will be explicated in further depth in subsequent sections of this paper. McCubbins and Schwartz provide a solid overview of oversight frameworks, but still more theoretical context is needed to understand MOIA’s pervasive use of CBO contracting. Shleifer (1998) provides an important overview of when and how states should go about contracting services to private entities and frames this discussion around a number of critical contracting criteria. This paper takes interest in five of the central criteria that Shleifer provides to argue when privatization can or cannot happen. Contractibility of service, importance of innovation, market competition, regulatory capacity, and quality measurement are the main variables that affect how MOIA steers its CBO contracting provisions in its budget. While Shleifer talks briefly about political interference risk, this paper relegates this factor largely to the wayside because of its endogeneity. Political interference risk is more prevalent given the divisive nature of politics today. In other words, given that a larger swath of private actions within the US citizenry can be viewed as political—versus apolitical­—, this paper perceives political interference risk as a concern that weighs heavily on both the private and public sectors. It will, in theory, be a concern whether the government takes on service provision itself or contracts them out to CBOs and private entities. It would be hard to say whether interference discretely affects privatization or is correlated with other actions that influence how contracting is done by the city. As such, analyzing political interference risk within the context of oversight is beyond the scope of this paper. But given these five existing factors, Shleifer identifies the ideal conditions under which states—and cities in this case—can effectively privatize and contract services outward (Table 1).

Levin and Tadelis (2010) extend this economic logic to the municipal level by discussing the “make-or-buy” decision in city government. They frame this choice around administrative tradeoffs between contracting costs and the productive efficiency of providing services. They provide evidence that cities are less likely to contract services that are complex, political salient, or hard to monitor.(Levin and Tadelis 2010) A particularly compelling visual generated through their study shows that contracting difficulty is negatively correlated with the frequency of private contracting (Levin and Tadelis 2010, 526). Two outliers in their visuals are worthy of note, especially within the context of this paper. Vehicle towing has—logically so—a very high frequency of private contracting given that its contracting difficulty is relatively low, between -1.5 and -1 (Levin and Tadelis 2010, 526). This likely reflects the fact that the service itself is straightforward, not politically salient, and easy to monitor. However, legal services, which maintains a similarly high frequency of private contracting has contracting difficulty nearly two points higher, around 0.5.(Levin and Tadelis 2010, 526) Legal services are highly political, complex, and difficult to monitor in many cases. Therefore, based on the findings of the authors—that contracting frequency should decrease as difficulty increases—, legal services are often privatized within US cities when they should be provided by the government or state.

This reality is of particular interest in this study where immigrant legal representation is one of the central functions that MOIA undertakes in its mandate. Taken together, these works both offer ways of understanding oversight and illustrate theories to interpret the structure of service provision. They grapple with underlying concerns about accountability, quality, and institutional capacity of cities and states to provide services to their constituents. While the political science literature focuses heavily on who holds agencies accountable, the economic theories from Shleifer and Levin and Tadelis explicates on how services are delivered—in-house or externally—and under what conditions. They converge and point to a broader logic of public administration in the bureaucracy: that effective governance depends on matching oversight and service provision mechanisms to the complexities—political and informational—of the task at hand.

MOIA’s Fiscal Year 2026 Budget Hearing

Before diving into the ways these theories of oversight and contractibility work in practice, it is important to provide a brief overview of the MOIA’s budgeting process and the context behind the hearing on March 3, 2025. The city of New York operates on a fiscal year schedule, beginning on July 1^st and ending on June 30^th of the following annual year (New York City Council, n.d.). Starting in January 2025, City Council began hearing testimony from different Mayoral offices, city boroughs, and districts about parts of the preliminary proposed fiscal year 2026 budget that the mayor presented to the council that month. Councilmember Alexa Avilés, Chair of the Committee on Immigration, took the lead during MOIA’s preliminary budget hearing in March, pitching tough questions from her office and directing other members on the panel to cross examine personnel on the dais. Testifying were the following members of MOIA and the Office of Asylum Seeker Operations (OASO) leadership:

1.     MOIA Commissioner, Miguel Castro;
2.     MOIA Deputy Commissioner of Administration and Strategic Initiatives,  Jasniya Sanchez;
3.     MOIA Deputy Commissioner of Programs and Policy, Lorena Lucero;
4.     Director of OASO, Molly Schaeffer.

Questions spanned several critical issue areas, including budget, staffing, operational capacity, sanctuary city laws, and transparency in the Adams administration (Table 2). Despite the comprehensive nature of these questions, many of the members at the dais appeared visibly unprepared and struggled immensely to provide straightforward answers. Avilés was quick to point out this fact and underscore the widespread uncertainty that Castro and his colleagues would cause for immigrant communities around the city listening to the livestream (“New York City Council Budget and Oversight Hearings on The Preliminary Budget for Fiscal Year 2026, The Preliminary Capital Plan for Fiscal Years 2026-2029 and The Fiscal 2025 Preliminary Mayor’s Management Report” 2025). Beyond this general overview highlighting the uncertainty and opaqueness within city hall and MOIA during the hearing, a few critical flashpoints show the power of oversight and their related frameworks at play. These flashpoints relate to three main domains: internal operations at city hall, the personnel budget, and MOIA’s contracted services.

At the outset of the hearing, Avilés publicly rebuked MOIA’s lack of transparency and severely delayed responses to the committee’s earlier questions from last calendar year. During questioning, she highlighted MOIA’s lack of sufficient answers posed directly by the committee and Castro’s overt inability to publicly criticize the Trump administration’s anti-immigrant policies. Lucero was also unable to provide direct answers to Avilés’ questions about ICE training for city personnel and faced harsh cross-examination by more than one committee member for her responses.

Avilés also criticized MOIA’s allocations internal salaries; MOIA dropped one position and slashed funding by $68,000 down to just $781,000 for five positions. At the same time, Sanchez admitted to the remaining 11 vacancies across various divisions at MOIA that were yet unfilled and unfunded by Department of Social Services (DSS) and Department of Citywide Administrative Services (DCAS) salary lines.

Other glaring moments of the hearing discussed legal support services and funding for MOIA nonprofit and CBO contracts. The committee highlighted a severe $1.1 million reduction in service for English classes offered by the WeSpeak program, a $1 million cut to the legal support hotline staffed by Catholic Charities of America, and a zeroed-out $5 million reduction in services for asylum seekers. These missed allocations represented nearly $7 million in overall cuts between fiscal years that shrank the budget from $21 million in 2025 down to $14.2 million in the year ahead. Meanwhile, Avilés underscored the fact that nonprofits were still waiting for their contracts to be paid out by MOIA despite the unprecedented demand for immigrant support services in the city.

Castro, Sanchez, and Lucero all articulated that reduction was preliminary and that ongoing discussions with the Office of Management and Budget (OMB) might produce revised, even higher numbers. But that did not convince members of the hearing that MOIA met its mandate in the last fiscal year or would be on track to do so at all during FY2026. Given this, it is easy to see how theories of oversight, contractibility, and privatization can apply to this hearing and the larger scope of MOIA’s funding for next fiscal year. The next section of the paper applies these theories to the events of the hearing and offers an impetus for the recommendations proposed in the conclusion. 

Results and Analysis: Putting Theory in Practice

The results and analysis of this budgetary hearing will be divided into two main treatment groups: the first will address oversight frameworks and the second will discuss contractibility. Transitioning between the two groups will allow this paper to show—beyond putting McCubbins and Shwartz’s literature into practice—how oversight can become complicated when issues of contractibility arise in citywide financial planning.

Oversight Dynamics

In totality, the oversight dynamic between MOIA and city council operates using a hybrid model, toggling between police-patrol and fire alarm structures depending on the type of line-item category under scrutiny in the budget, mentioned earlier. To recall them again, these main groups were internal work dynamics in the mayor’s office, personnel salaries in the budget, and CBO-nonprofit contracts.

Avilés’ criticisms around the internal operations of MOIA most align with the police-patrol oversight framework. Her rebuke of MOIA and Castro’s lack of transparency, delays returning information requests, and other system-wide structural issues was “centralized, active, and direct.”(McCubbins and Schwartz 1984, 166) The public nature of the hearing—and the fact that it was livestreamed—also helped underscore the wrongdoing of MOIA and discourage violations in the long-term by (1) criticizing issues directly with MOIA leadership present and (2) surfacing issues for public awareness to increase accountability. MOIA’s issues around their personnel budget are slightly more nebulous to fit into theories of oversight but offer a compelling case that both frameworks are at play. Avilés was able to directly challenge the staff downsizing and the number of vacancies left within MOIA by unfilled DCAS and DSS lines. But since DCAS and DSS lines would not be listed within MOIA’s preliminary budget and instead, provided by other departmental ledgers, Avilés relied on fire alarm oversight as well. In this case, the interest groups—DCAS and DSS—would flag unfilled staff lines for Avilés to challenge, constituting the type of “less active and direct intervention” that characterizes fire alarm oversight. Lastly, the overwhelming challenges with MOIA’s contracted services provide unequivocal evidence of fire alarm oversight. During the hearing, Avilés and her other committee counterparts mentioned that many nonprofits and CBOs had not received payouts from the city per the terms of their contracts. The delays were severe enough where nonprofits and CBOs were filing reports and flagging the issue during the second cycle of emergency procurement after President Trump’s inauguration on January 20, 2025 (“New York City Council Budget and Oversight Hearings on The Preliminary Budget for Fiscal Year 2026, The Preliminary Capital Plan for Fiscal Years 2026-2029 and The Fiscal 2025 Preliminary Mayor’s Management Report” 2025). Thus, constituents—the nonprofits and CBOs that had contracts with the city—raised concerns through established procedures to seek “remedies from agencies” like MOIA falling short of their obligations to their NGO partners (McCubbins and Schwartz 1984, 166).

However, seeing that MOIA relies so extensively on nonprofit contracts to provide services to immigrants in all five boroughs, fire alarm oversight in this case shows the limits of privatization. Without in-house service provision to catalyze more direct oversight, issues that arise when the city opts to contract services out to NGOs are hard to elevate to regulatory bodies like the city council. In other words, the contractibility limits of MOIA’s services compounded with the fire alarm oversight inherent to NGO partnerships puts immigrant support services at risk for complete neglect until hearings—especially during direct budget oversight—interrupt and adjust course. This issue of contractibility is more broadly expanded in the following paragraphs using the economic literature from above.

Contractibility and Privatization Dynamics

This paper centralizes specifically on the March 3, 2025, preliminary budget hearing for MOIA because it went so poorly. At the time, I was working at MOIA as an intern, beginning work on a comprehensive five-year report summarizing the work of the Community Engagement and Outreach team amidst downsizing and administrative changes. The reason why MOIA appeared to fall so far below meeting its mandate was in part because of the fire alarm oversight that did not elevate issues in contracted service provision to the personnel at MOIA who could adjust. But more specifically, the issue with MOIA’s contractual approach is that the services it wants and should provide to immigrants are noncontractible. This non-contractibility is explained simply by looking at the five domains outlined in the literature portion of this paper (Table 1).

Immigrant support services are hard to define and vary depending on a huge number of factors: geographic origin, language competency, age, socioeconomic status, gender, marital status, familial structure, and more. Determining what successful immigrant support services look like while drafting a contract is incredibly hard; specifying terms and monitoring outcomes is even more challenging given that—for legal services especially—information related to undocumented immigrants is kept private for security purposes.

Innovating and improving immigrant support efforts also adds very little value to the types of services that are delivered, not because they bear no effect but because when innovation is tried, it rarely succeeds. For instance, alternative pathways for long-term residence like DACA; Temporary Protected Status (TPS); and the Cuban, Haitian, Nicaraguan, and Venezuelan (CHNV) parole program are all under threat or already eliminated by the Trump administration (Lind 2025).  The decline of alternative pathways for new immigrants to achieve stability coupled with the extensive asylum backlog in the US means that innovating in the field of immigrant service provision carries little incentive if any. Nonprofits and CBOs can get more creative in offering basic services, but for the type of legal stability that most immigrants are searching, no “legal innovation” can solve for the dismal status quo.

Market competition is also incredibly low; many nonprofits and CBOs that work with the city end up collaborating to expand their network and reduce gaps in their services. This means that resource sharing and bilateral information exchange creates a network—rather than concentrated hotspots—of immigrant support services. The nonprofit status of these groups also means that their incentive to drive up profit for shareholders is not tied to competition. Their ability to procure funds for their services does not connect directly to the typical profits that entities like defense contractors might observe. Market entry is also a problem with funding scarcity rising for pro-immigration services; thus, the ability to spontaneously create a new NGO to provide more or different services is negligent at present.

This ties in directly to the government’s ability to monitor and enforce contracts. With little metrics to determine the success of immigration services (given privacy concerns and the challenges that come with case management for undocumented people), enforceability is low. Monitoring is also a challenge with nonprofits who might be incentivized to inflate numbers to ensure that they can continue to receive funding for their services that help support operational overhead costs for the NGO’s administration.

These challenges with monitoring also reflect the unobservable or subjective nature of immigrant support services. Variable standards of success, different minimum thresholds for services, and the complexity of legal services means that any attempt to measure quality will deal with too many subjective interpretations of “immigrant success.” The increasing anti-immigrant political climate also means that these success measurements might make sacrifices, compromising to lower standards of success with fewer federal provisions—like DACA, TPS, and CHNV—available to support new arrivals.

In each of these domains—contractibility of service, innovation, market competition, monitoring, and quality measurement—MOIA’s approach to contracting immigrant support to nonprofits and CBOs favors a public, governmental approach. None of the domains from above give any reasonable affirmation that the contracting of these services to NGOs enhances, safeguards, or even ensures successful outcomes for immigrants in the city. Castro might be working with the assumption that privatizing these services will protect them from changing city politics. But the city council provides enough of a power rebalancing effect to prevent the mayor from gutting an agency with MOIA’s function. Seeing that Castro’s conception of privatization is justified by few—if any—rational heuristics or real-life circumstances, the bulk of the recommendations in this paper to MOIA’s structure support the MOIA’s conversion into an agency. Doing so will increase accountability and accelerate service delivery by refitting MOIA’s mandate into the public sector. 

Discussion and Concluding Recommendations

Given the application of oversight principles to MOIA’s budget and the issue of contractibility addressed earlier, this paper ends with a discussion of these findings and concludes with a set of recommendations for reform. Investigating the FY2026 MOIA budget hearing illustrates a clear disconnect between the city’s stated commitment to pro-immigrant support services and its actual responsiveness, funding priorities, and operational capacity. MOIA emphasizes its engagement and legal support offerings, but has delayed council questions, understaffed critical divisions within its office, and withheld commentary advocating for program expansion. City council’s approach has responded by mobilizing both police-patrol and fire alarm oversight frameworks in different contexts. The council decried MOIA’s dodgy internal politics and its evasion of important deadlines by using police-patrol oversight that directly confronted MOIA’s shortcomings. It balanced a hybrid approach of both frameworks when it addressed MOIA’s reductions in staff funding and open vacancies but relied on fire alarm oversight to denounce MOIA’s incomplete payouts of CBO contracts. Underlying this oversight logic are the contractibility dynamics that support the forceful recommendations presented next.

This paper studies whether immigrant services in NYC are contractible by MOIA using oversight frameworks traditionally applied on a congressional level; but homing in on the literature and practical implementation of service provisions at MOIA, this essay concludes that immigrant services at MOIA are fundamentally—and unequivocally—non-contractible. Despite Castro’s hopeful approach to privatizing immigrant services, siloing them from political influence, this paper affirms that successful immigrant support must come from the public sector. Low contractibility, innovation incentive, market competition, ability to monitor, and limited—often unobservable or low-visibility—outcomes mean that contracting MOIA’s services into the private sector (by nonprofits or CBOs) is, by definition, ineffective (Levin and Tadelis 2010; McCubbins and Schwartz 1984; Shleifer 1998). As a result, this study of MOIA’s budget strongly recommends a complete transformation whereby the organizations’ structure as a mayoral office would be converted into a city agency. Doing so would allow for enhanced oversight, public service provision for immigrants, and effective service delivery for English classes, legal services, and asylee support. OASO already shows the way cities can undertake publicly provided, pro-immigrant services in an efficient way. However, OASO was created as a crisis-response entity to address the huge influx of immigrants entering the city over the past three years. Converting MOIA into a city agency would therefore have the combined effect of providing immigrant services in the public sector while eliminating duplicated services between both offices. This recommendation is indeed ambitious, but the need to adapt and refine these services has never been greater while unprecedented need for immigrant support exists in the city. On the eve of the next New York City mayoral election, it would be in the best interest of candidates, incumbents, and even independent candidates to try and affirm the city’s identity as an immigrant sanctuary by overhauling MOIA’s approach. Only then can the city hope to meet its mandate and ensure long-term stability for its most vulnerable new residents.

Appendix A: Bibliography

Levin, Jonathan, and Steven Tadelis. 2010. “Contracting for Government Services: Theory and Evidence from U.s. Cities.” The Journal of Industrial Economics 58 (3): 507–41. https://doi.org/10.1111/j.1467-6451.2010.00430.x.

Lind, Dara. 2025. “Trump Administration Terminates CHNV Program, Impacting More Than a Half-Million Immigrants.” Immigration Impact (blog). April 8, 2025. https://immigrationimpact.com/2025/04/08/trump-terminates-chnv-program-impacting-more-than-half-million-migrants/.

McCubbins, Mathew D., and Thomas Schwartz. 1984. “Congressional Oversight Overlooked: Police Patrols versus Fire Alarms.” American Journal of Political Science 28 (1): 165–79. https://doi.org/10.2307/2110792.

New York City Council. n.d. “The Budget Process.” Budget. Accessed May 5, 2025. https://council.nyc.gov/budget/process/.

“New York City Council Budget and Oversight Hearings on The Preliminary Budget for Fiscal Year 2026, The Preliminary Capital Plan for Fiscal Years 2026-2029 and The Fiscal 2025 Preliminary Mayor’s Management Report.” 2025. New York, NY. https://councilnyc.viebit.com/embed/vod?v=aEsVMnfbKjbRPMdo&s=true&d=false.

Shleifer, Andrei. 1998. “State versus Private Ownership.” The Journal of Economic Perspectives 12 (4): 133–50. https://www.jstor.org/stable/2646898.

Appendix B: Tables

Table 1: Criteria for privatization and correlated best-case for contracting versus governmental provision by the state (adapted from Shleifer 1998).

Table 2: Summarized questions and responses from the hearing by the author and synthesized into table-format using ChatGPT