How New York City routinely does not pay the non -profit organizations on which it trusts
- Advertisement -
Like protesting logans, “payment on time, every time!” It may sound like a modest question.
But for many of the non -profit organizations that hire New York City to deliver billions of dollars in social services, quick payment is a distant dream. Employees of organizations that represent hundreds of non -profit organizations that came outside the town hall last week to beg the city to simply pay them what they owe.
According to A new report from the City ComptrollerBrad Lander, the city is at least 7,000 unpaid invoices from non -profit organizations, some years dating out, in total more than $ 1 billion.
This is money for groups that protect the homeless, offer child and older care, feed hungry New Yorkers, advise the mentally ill, protect victims of domestic violence and provide legal services to immigrants and defendants who cannot pay lawyers.
“The city says to these organizations:” Look, we don’t have the capacity to do this life -saving work – we need you to do it, “said Justin Brannan, chairman of the financial committee of the city council, Wednesday during the rally.” But when it’s time to be paid, they treat you like a Deadbeat parent. “
Mr Lander says that the $ 1 billion is probably an undercount. His review showed that from April non -profit organizations with active contracts up to $ 4.9 billion have performed at work for which the city had not yet paid them.
This is what you need to know about the chronic late payments of the city.
Why is the city so bad at paying its bills?
It is no problem with the cash flow – the city has the money. Instead, delays are built into the contract and payment process for each step.
The city was late registering more than 90 percent of the contracts for human services, the tax year, a crucial step that legalizes contracts and has contractors submitted to invoices.
When a non -profit organization even requires a small contract adaptation – for example a few hundred dollars to repair a boiler – that can block the payments for months.
Staff is also a big problem. New paperwork requirements set after abuse have increased workload at city agencies that are already dealing with many vacancies.
And a new payment portal that was rolled out last year has been plagued by glitches, says De Comptroller.
What time are the payments?
During nine of the slowest city agencies, good for more than 4,000 in arrears, the unpaid invoices were on average 49 days late, the competent thought. The Department of Homeless Services, the slowest to pay, has more than 1,300 unpaid invoices, on average 82 days old. It has 72 unpaid invoices that date more than a year.
Volunteers from America-Degelage New York, which run hiding places for victims of domestic violence, veterans and people with disabilities and $ 32 million, said it remained unpaid for some costs incurred in 2017.
How do the non -profit organizations maintain the lights if they owe millions?
Usually by borrowing money, which causes his own problems. Some organizations pay no less than one million dollars in annual interest on their debt. The city does not have to reimburse them for the interest, so that money has to come from somewhere – sometimes at the expense of serving people in need.
During a hearing of the city council in March, the Reverend Terry Troia, the president of the Shelter Operator Project Hospitality on States Island, that its organization was “only $ 4.5 million” compared to $ 16 million last year. Nevertheless, it was confronted with a bill of $ 100,000 and it had to cover those costs themselves.
“You do that by raising money into the community,” she said, “but people prefer to give money to our food pantry.”
Do late payments ever do non -profit organizations out of operation?
It happened. In 2023, Sheltering Arms, a 200-year organization for youth services that offered childcare and foster care, to block Partly due to delayed payments.
Other non -profit organizations have scaled back services. And thousands of their employees who have been promised, the costs of living must still receive them.
More often, said Kristin Miller, the executive director of Dakeless Services United, no longer stops providers on city contracts “because the risk of doing business with the city is too high.”
But for many of them, the city is the only game in the city – the only source of the work that the organization carries out.
What does the town hall do to solve the problem?
Last Tuesday, Mayor Eric Adams, who is re -elected, announced the city that next tax year it is expected that more than $ 5 billion before payments For contractors, an increase of $ 2.8 billion this financial year. Non -profit contractors can receive up to 25 percent of their contract value as an advance. The new tax year starts on July 1.
The Town Hall is also launching a new tracking system “to account for data-controlled accounting for non-profit contracting between city institutions.”
Mr Lander, who is on his way to mayor, said that increasing advance payments “was a useful patch to resolve the immediate crisis,” but emphasized the need for deeper reforms.
What have other officials presented?
Mr Lander has proposed to make partial invoice payments a standard practice, so that a dispute over one line item does not stop payment in the entire account; Expansion of subsidies and bridge loans to ensure that non -profit organizations earn payroll; And repairing “pain points” in the new payment system, passport.
The city council has Introduced different accounts In an attempt led by the speaker, Adrienne Adams and Mr. Brannan. It would be required that the city pays 80 percent of the contract from each year in advance. Another would set up a new city agency, the Department of Contract Services. A third party should require agencies to submit “corrective action plans” if they register late contracts. (Mrs Adams also runs for mayor.)
Mr. Brannan also suggested demand the city of interest costs sustained due to late payments.
- Advertisement -