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Payment delays from the Mayor’s Office of Contracts are wearing down many local not-for-profit organizations, finds a recent survey of 77 groups by City Project, a nonprofit budget watchdog. On average, paychecks come about four months late for the community-based organizations that win contracts to perform social services like after-school tutoring, a Meals on Wheels program, and job training.
Those payment delays force the CBOs, which usually have small budgets and no reserves, to take out bridge loans in order to keep paying staff and providing services. Under current rules, the city won’t reimburse them for the interest they must pay.
Despite the problems, 96 percent of CBOs had begun services on time, and only 11 percent reduced services because of the funding delays, the survey reported.
“It’s ridiculous that we have to wait so long,” says Jennifer Flynn, executive director of the New York City AIDS Housing Network, a coalition of housing providers for people with AIDS. “The people that really suffer are the ones whom the money is intended to serve.” Flynn says that delays of up to 11 months have put her member organizations in a tight spot.
Yvonne Graham, executive director of the Queens and Brooklyn health care and immigrant services center, Caribbean Women’s Health Association, says she has high staff turnover because of the uncertain economic conditions that sometimes force her to delay payments to her staff. “At least 60 percent of those who left say it is because of the uncertainty,” she says.
The delays are especially frustrating because more than 80 percent of the contracts are renewals, pointed out City Project’s Lynne Weikart. “It’s absurd that renewals should take this long.”
And it may be difficult for an organization to even find out at why a contract is being held up. The comptroller, who finalizes the contracts, blames the mayor’s office, and the mayor’s office in turn blames the comptroller, says Flynn.
But CBOs may soon get a little bit of relief. In late January, city Comptroller Alan Hevesi proposed a rule change that would direct the city to pay interest on bridge loans, as long as the contractor in question wasn’t to blame for the delays. That change, or one like it in the City Council, could make the slowdown more bearable.
