State often late in getting funds to local nonprofits

The Utica OD reported on a recent report released by the state's Comptroller's Office that highlights the lengthy waiting time nonprofits face for state funds.

Nonprofits can wait months or even years, depending on the state agency that is responsible for the funding, officials said.

Examples in the report include:

• The state was 1,624 days late -- or nearly 4 ½ years – in getting $75,000 in funds for general operating support and multicultural outreach to the Utica Symphony.
• The state delayed getting $140,000 in contracts to the Herkimer Area Resource Center for 597 days.
• Utica College had to wait 709 days for $675,000 in funds for a new building.
• And the delay in getting $200,000 to Mohawk Valley EDGE to fight the New York Regional Interconnect power line? Nearly 1,200 days, or more than three years.

“There is a lot of time from commitment to contract,” said Steve DiMeo, executive director of Mohawk Valley EDGE, an economic development agency. “It’s a difficult way to do business when various bureaucracies take different amounts of time to distribute funds.”

DiMeo said the way the state processes paper is part of the problem. “In the interest of transparency, more and more departments have to sign off on contracts,” DiMeo said. “It’s gotten a lot worse. The state can do a far better job in terms of streamlining things.”

State agencies report that state contracts with nonprofit organizations were approved late 63 percent of the time. The new audit by the Comptroller’s Office, however, shows the rate of late contracts might reach 87 percent.

Comptroller Thomas DiNapoli is proposing regulations to ensure nonprofits are paid interest required by law when their contracts are processed late.

“Not-for-profits operate on very thin margins,” DiNapoli said in a statement. “Those margins can disappear completely when contracts for services are held up. New York has an implicit compact with these organizations. They provide vital services for vulnerable New Yorkers and the state should ensure they get their funding on time. It’s time for the state to live up to its end of the bargain.”

The Legal Aid Society of Mid-New York had to wait 377 days for $75,000 worth of funds to assist and represent indigent persons in civil matters.

“The high numbers are not surprising,” said Executive Director Paul Lupia said. “It makes it very difficult to plan financially, and for us to have a balanced budget.”

“Even though you know the money is coming, you still have to pay staff and all of your bills,” Lupia said. “The delay does affect our cash flow severely.”

William Holicky is executive director of The House of the Good Shepherd, which had to wait 272 days for $150,000 worth of funding.

“This is nothing new for nonprofits,” Holicky said. “When we have to wait a long time, we might have to borrow money, and interest adds up”

Nonprofits provide services through grant contracts, such as health care clinics, work force development and mortgage foreclosure programs. The state currently has 30,764 active contracts with nonprofits totaling $14.6 billion. Read more here.