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Nonprofit providers tell council payment delays continue to strain services despite recent advances
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Summary
Nonprofit providers told the Council's Contracts Committee on Oct. 23 that payment delays and outstanding budget actions continue to harm operations even after FY26 advance payments and pilot reforms.
Nonprofit leaders told the Committee on Contracts that recent progress on payments has not eliminated lingering effects of past delays and outstanding budget actions that continue to strain operations.
Kristen Miller, Executive Director of Homeless Services United, said the sector appreciated recent relief but still faces large unresolved items: "providers still have months of catch up in pending budget actions, updates, and invoice approvals that are prohibiting them from being reimbursed for the services they have already performed." Miller said an HSU sample found one-third of member organizations have over $189,000,000 in outstanding budget actions from fiscal years 2020 through 2025.
Dan Layman, president and CEO of HelpUSA, said his organization welcomed FY26 advances but still faces delayed reimbursements for mandated salary adjustments, insurance, utilities, and other occupancy costs. Layman said HelpUSA pays "hundreds of thousands of dollars on interest for working capital line of credit loans to bridge these cash flow delays," costs that city contracts do not reimburse. He also said the success of any advance model depends on clear schedules for reconciling and recouping advances with actual expenses, and on coordination among DHS, MOCS, OMB, and the city controller.
Administration witnesses reiterated steps taken this year: MONS and MOCS cited an increase in standard advance payments for many contracts in FY26, a discretionary grant pilot that expedites small awards, a payment task force established in July to investigate bottlenecks and assist providers, and a relaunch of ContractStat to monitor contract cycle times. MOCS reported that its spring initiative unlocked more than $700,000,000 in retroactive backlog contracts and that 88% of human-service contracts for FY26 were submitted on time to the comptroller as of July 1.
Providers and council members pressed the administration for precise data and for more outreach about available tools such as the returnable grant fund; MONS and MOCS said they would provide requested figures and continue outreach and technical assistance. Witnesses emphasized that volunteers'safety and service continuity depend on resolving both legacy backlog and future timing issues.
Provenance: provider testimony at 02:02:18 (HSU) and 02:06:15 (HelpUSA); administration testimony throughout hearing (MONS and MOCS presentations).
