NYS Continues to Disadvantage Grantee Agencies
by Douglas Boettner

State Comptroller Thomas DiNapoli recently released a report which disclosed that Not-For-Profit groups (NFPs) in New York State are getting stung by slow-moving state agencies that are unable to process grants in a timely fashion and thus hurting community groups' ability to stay afloat. The bureaucratic hurdles to getting a grant from the state has been an issue for decades, and DiNapoli found that despite complaints from nonprofit groups, the problem persists. The report found 70 percent of grant contracts for non-profit groups were processed late in 2007, sometimes up to a year late. The slow process meant that 7,660 of the 10,970 grants provided to groups were not received on time and state agencies paid $203,636 in late payment interest.

I was employed by the Office of the State Comptroller (OSC) for 30 years; 20 of which were in the capacity as the Director of Contracts. I was instrumental, working with Sue Hager of United Way, Ron Soloway of the United Jewish Philanthropies, the Catholic Charities and with the Legislative fiscal committees in passing legislation entitled Prompt Contracting for Not-For-Profits. This legislation allows NFPs to receive interest payments from state agencies when they are late in processing contracts after issuing NFPs written directives to commence providing services on a specified date.

The problem with the legislation is it's enforcement. If the law is followed as written, the NFPs should get interest almost every time a state agency is late submitting a contract to the State Comptroller for approval. However, that doesn't happen because the state agency many times makes claims the NFPs are derelict in getting info to them, and even if that is not the case, NFPs are reticent to complain to the agency or to OSC for fear of retribution by the state agency.

Simply, what needs to be done is OSC needs to start to closely monitor and control when NFPs are due interest from the inaction of the state agencies. OSC is the only state government entity in a position to do this because they are the central repository for the grant contracts when they come in for approval. From the contract dates, OSC can determine which NFPs should potentially be due interest. That is how OSC knew there were 7,660 of the 10,970 grants that were not received on time. OSC has always been in a position to enforce this legislation, but has apparently chosen not to. NFPs, Sue Hager of the United Way in particular, had asked OSC to do just that but could not convince them to do it. The amount of interest reportedly paid to NFPs of $203,636 is more likely to rise to several million dollars if OSC took the necessary steps to proactively enforce the law. I mean isn't that what OSC is charged with doing? Comptroller DiNapoli has the ability to correct the exact issues he is calling attention to.

By way of background, once Governor Pataki's administration began, there was a de-emphasis on the plight of the NFPs. The governor never made the necessary appointments to the NFP advisory committee and it simply ceased to exist. And Carl McCall never challenged this inaction by the Governor Pataki even after repeated warnings that the law was not being adhered to. Basically, under Mario Cuomo NFPs and MWBEs received a great deal of attention; under George Pataki all attention seemed to have disappeared. He basically just ignored the law and no one challenged his decision. I am assuming that the interest in NFPs and MWBes will now return under David Paterson; and not a moment too soon.