Not-for-profits in the state have been operating at the mercy of a less than forgiving economy that has seen a marked decline in foundation philanthropy and a slight drop in personal charitable giving.
Add a late state budget coupled with foot-dragging by state agencies in approving contracts with not-for-profits and you get what Comptroller Thomas DiNapoli characterized as a “double shot of trouble.”
“Contracts for services are being held up and organizations can”™t get reimbursed for services they have already provided. It”™s wrong to expect organizations that operate on shoestring budgets to float the state,” DiNapoli said.
“This is another example of why the state cannot continue to operate by passing weekly emergency spending bills. New York needs to change the way it does business because business as usual is hurting New Yorkers.”
DiNapoli”™s statements were part of a report on the state”™s not-for-profit sector.
The state has 25,811 contracts with not-for-profits totaling nearly $42 billion. Those services include employment, senior centers, arts councils, day care, health care and weatherization. In the mid-Hudson region, which includes Westchester, Dutchess, Orange, Putnam, Rockland, Sullivan and Ulster counties, 591 not-for-profits have contracts with the state.
In an earlier report, the Comptroller”™s Office found up to 87 percent of contracts with not-for-profits were approved late, forcing the organizations to provide services without a contract in place and without any payments. That forced a number of not-for-profits to borrow funds.
Citing a recent survey, DiNapoli said “69 percent of NFP respondents indicated that in the last two years they have needed to borrow money due to delayed government contracts and/or payments.”
DiNapoli”™s report found that state agencies were late in approving contracts with not-for-profits 82 percent of the time last year compared with 63 percent in 2008.
The Locust Grove ”“ The Samuel F.B. Morse Historic Site in Poughkeepsie has the dubious distinction of having the greatest delay in having a $350,000 contract approved at 905 days. The start of the contract was Oct. 18, 2006.
Contracts in the mid-Hudson region ranged from $1,470 for the Abilities First organization in Dutchess County to $19,392,960 HEAL NY capital restructuring initiative at St. Luke”™s Cornwall Hospital in Orange County to $27 million for combined contracts for the weatherization program for low- income individuals through the Westchester Community Opportunity Program.
A state law was passed in 1991 to approve not-for-profits”™ contracts expeditiously and their payments to avoid service interruptions and financial hardships. It requires that the contracts be processed within 150 to 180 days. The report found that contracts $50,000 or higher were approved late 93 percent of the time. In 2009, of 6,318 contracts, 5,844 were approved an average of 152 days late. The contracts were worth $4.2 billion.
DiNapoli said his office approves contracts within 11 days after receiving them from state agencies.
To speed up the process, DiNapoli suggested state agencies choose start dates for contracts that are later than April 1 so they are not affected by the timeliness of adopting a state budget.
