Nonprofits across New York City help house the homeless and deliver meals to the elderly, but city officials have been late to pay these nonprofits, putting financial strain on already cash-strapped organizations, according to a report from Comptroller Scott M. Stringer’s office.
In a report out this week, the comptroller looked at delays in the city’s contracting system, particularly contracts that support social programs.
Organizations can only be paid once a contract is registered, and 81 percent of all contracts were submitted late for registration by city officials in the fiscal year 2017, the report found.
That puts these nonprofits in a tricky situation, Stringer explained: either delay the start of their work, stalling projects and potentially driving up costs; or begin the work without a registered contract, foregoing upfront pay and bearing the initial financial burden completely on their own.
The report specifically examined “Type 70” contracts, which support programs for New York’s “most vulnerable populations — including seniors, the homeless, and children,” according to Stringer’s office,” across seven city agencies.
Among the “worst offenders” were the Human Resources Administration — which bills itself as “dedicated to fighting poverty and income inequality by providing New Yorkers in need with essential benefits such as Food Assistance and Emergency Rental Assistance” — and the Department of Homeless Services.
These two city agencies submitted 100 percent of their contracts late, meaning not a single contract was registered before the contracted start date, the report found.
In response, HRA spokesperson Lourdes Centeno said in a statement, “While we do not know what data was used for this report we can confirm that out of 143 contracts, there are only nine HRA contracts that are over one year retroactive. In fact, major initiatives like the new employment contracts were registered within 14 days of the contract start. In cases like this where registrations are after the start date, we are diligently working with providers to address any challenges they face, including providing interest-free loans or immediate advances, to ensure that they can deliver services to New Yorkers in need.”
The Department of Education and the Department of Aging followed closely behind, submitting 99.8 percent and 98.9 percent of contracts late, respectively.
A delay in registration means a delay in pay, and such delays force nonprofits to take out loans from the city, the comptroller’s office said, in order to pay staff and cover expenses.
Allison Sesso of the Human Services Advancement Strategy Group, a group of nine organizations like the UJA Federation and Homeless Services United that represent 2,000 human service providers in the city, said the report sheds light on a “clearly broken system.”
“We need to rethink how the contracting process works and reshape it to better support the institutions working in communities,” she said. “To their credit, the administration created the Nonprofit Resiliency Committee to reform their interactions with nonprofits. Some positive things have come out of that, like a 25 percent advancement to help with cash flow once a contract is registered, but getting to the point of registration remains a significant problem that must be solved.”