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Q&A
Council Member Stevens conducts Q&A on late payments and loans with panel members
3:21:04
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4 min
Council Member Althea Stevens engages in a Q&A session with panel members from various organizations about late payments and loans. She inquires about survey results, indirect costs, and experiences with loans and interest payments.
- Michelle Jackson from HSC reports $582 million owed to their members and explains issues with indirect cost payments.
- Greg Rideout discusses frustrations with loan solutions and difficulties in applying for funds.
- Kristin Miller shares that 12 of her members were owed $170 million by DHS, with some paying over a million dollars in interest on lines of credit.
Althea Stevens
3:21:04
I guess to me, the first question I ask is to HSC.
3:21:09
I know you guys have been doing a lot of surveying with your members and could you talk a little bit about like how much is owed to the collective of your members and also just even around some of the indirect costs.
3:21:22
I know that's like a huge issue.
3:21:24
Can you talk a little bit about what like what that that loss has been around the indirect?
3:21:30
I know you mentioned a little bit in your testimony.
3:23:12
Thank you.
3:23:14
Greg Wright, I just have a question even around some of the loan stuff that was like kind of talked about today and I know your agency specifically has had like some challenges and I know we talked extensively about the amount of interest that your agency has had to pay on it and where this left you guys.
3:23:29
So could you talk a little bit about that experience?
Michelle Jackson
3:21:31
Yeah, absolutely.
3:21:32
Thank you for that.
3:21:32
So we did a survey, not our full membership, but the ones who responded were owed $582,000,000 as of about three three weeks ago, a month ago.
3:21:41
And, obviously, the controller has better data because everyone fills it out and also our nonmembers.
3:21:45
So that's you know, the 582,000,000 is just from my membership.
3:21:48
And then when it comes I think that indirect is a good example of why the problem is the worst it's ever been.
3:21:54
It's that we're not just seeing late contract registration.
3:21:57
We're also seeing the slow invoices and all these budget modifications that are stacking up.
3:22:01
And indirect is certainly the worst offender in that area.
3:22:05
Providers every three years have to get an approved indirect cost rate, and every year it's retroactively put into their budget, which makes no sense when it should just be incorporated into their budgets after they have an approved rate.
3:22:17
So they have to submit a budget modification.
3:22:20
Once you submit a budget modification, you can't submit another and you have to wait for it to get approved.
3:22:24
And so these budget modifications stack up on top of each other.
3:22:27
And we've seen particularly in DFTA, and I know Livon and others will testify with much more detail than will, some of the providers are owed literally from FY '21 when the initiative was created.
3:22:36
They have not been paid indirect.
3:22:38
And so they don't know if they're ever going to see that money at this point honestly, and so that's where some of the accruals come from.
3:22:44
They don't know, you know, and then they have accruals and that means they actually get less indirect because it's a percentage of the budget that you spend, and so it's a whole mess.
3:22:52
Your face does it all, and so but, you know, some of our organizations end up being owed a million or $2,000,000 just on indirect that they're not sure, there's no guarantee that they're going to be paid for it.
3:23:02
We haven't heard from you know, we know there's a directive out about it, is great, but we're not seeing the city agencies really step up and pay that and clear that backlog.
Greg Rideout
3:23:32
Sure.
3:23:33
It is exceedingly frustrating to hear that cited over and over and over again as the solution.
3:23:41
I mean, it's it's fairly comparable to the idea of releasing as much advance as is proposed for fiscal year twenty six when it requires contracts to be registered, and we all know how long that takes.
3:23:54
But the the fund is while it is interest free, it is not easy to complete the forms.
3:24:03
And so while I I'm not surprised to hear the numbers that were cited earlier today in terms of how much money has been distributed or how many applications have been made.
3:24:12
I don't think it is an issue that agencies are not aware of it, because every city agency, when you go to them and you ask them for help in getting contracts registered or invoices approved, budgets approved, they will tell you to go and apply to fund for the city of New York.
3:24:30
They see it as the solution.
3:24:33
But you have to put in a grave amount of detail in terms of expenses already incurred and there are a number of different categories, budget categories that are not included including indirect.
Kristin Miller
3:24:48
Chair Stevens, if I may, we did a sample survey and just 12 of my members about six weeks ago were owed $170,000,000 by DHS.
3:25:01
And I have a number of members who have paid over a million dollars in interest on lines of credit in just one year.