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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

June 16, 2014, Contact: Press Office (518) 474-4015

DiNapoli: Increase in Late Contracts with Not-For-Profits Impacts Those in Need

State agencies were late 87 percent of the time in approving contracts with not-for-profit providers (NFPs) last year, according to areport released today by State Comptroller Thomas P. DiNapoli. This is an increase from 2012, when 78 percent of contracts were approved late. The late approvals prompted interest payments, mandated under the Prompt Contracting Law, that cost the state $185,519, the report found.
 
“Every day, New Yorkers rely on not-for-profits to care for their children, improve their health, get housing and much more,”DiNapoli said. “Simply put, the state can’t provide all of these basic services without the help of not-for-profit organizations. And when contracts and payments are late, it hurts people and providers, costing the state taxpayer dollars in interest payments.”

The report notes that there was a significant increase in the number of contracts subject to the Prompt Contract Law (up 1,812 or 44 percent), and that this likely contributed to the delays. The number of contracts varies year to year. Click here for a breakdown of not-for-profit contracts by organization, region and length of days for approval.

“Late payments on government contracts create unnecessary costs and management headaches for organizations throughout New York,”said Allison Sesso, executive director of the Human Services Council. “While we greatly appreciate state efforts to streamline the relationship between these nonprofit entities and government, this report clearly shows additional work is needed. We look forward to advancing efforts to ensure timely payments for this critical sector.”

“The Comptroller’s report shows the problem of late contracts isn’t fixed,”said Reg Foster, president and CEO of United Way NYS. “The Governor has introduced some positive administrative reforms, but we need to be diligent to protect not-for-profits and the services they provide.”

“This year’s report is another reminder of the work that still needs to be done,”said Richard E. Barnes, executive director of the New York State Catholic Conference. “We thank Comptroller DiNapoli for addressing these problems. The Catholic Conference, on behalf of the Catholic Charities, healthcare and educational institutions statewide, urges all elected officials to work diligently to ensure that contracts between agencies and the organizations providing necessary services to the people of New York are processed and implemented in a timely manner.”

“We applaud Comptroller DiNapoli for tracking and highlighting this problem year after year,”said Doug Sauer, chief executive officer of the New York Council of Nonprofits Inc. “Unfortunately, facts do not create policy, they only inform it. The state of New York, despite best intentions, has taken its eye off the ball.” 

In 2013, 5,162 of 5,946 contracts were approved late by agencies. The bulk of the interest was paid by four agencies:

Agency

Amount

Percent of NYS Interest Paid

Department of Health

$79,573

43%

Division of Criminal Justice Services

$56,487

30%

Office of Children and Family Services

$24,969

13%

State Education Department

$24,155

13%

The state’s Prompt Contracting Law was enacted in 1991 to prevent payment delays that could impair services to New York’s most vulnerable citizens. The law requires agencies to process contracts within 150 to 180 days. A 2007 amendment requires the Comptroller to report annually on whether agencies meet the time frame and reasons for delay, with recommendations to improve timely contracting. 

The Comptroller’s report recommends that state agencies:

  • Make prompt contracting a priority to reduce costs to the state and not-for-profits;
  • Pay prompt contracting interest with the first payment due after the start of a late contract; and
  • Re-align contract start dates to reflect the time required for the procurement process.

The Comptroller’s Office continues to work with the Executive to improve grant contracting performance, including the development of a master contract, creation of a central document repository, and increased training for NFPs. A web-based electronic contract system is currently under development.

For a copy of the report, visit:
http://www.osc.state.ny.us/contracts/reports/2013/pcl_report.pdf

For a breakdown of not-for-profit contracts by organization, region and length of days for approval, visit:
http://www.osc.state.ny.us/press/releases/june14/late_contracts_by_region.pdf

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