Your guide to NYC's public proceedings.
Q&A
Explanation of payment delays in multi-year contracts
2:28:56
·
122 sec
Council Member Julie Won inquires about persistent payment delays in multi-year contracts, and Michael Sedillo from the Mayor's Office of Nonprofit Services provides explanations for these delays.
- Sedillo cites budget modifications as a primary reason for payment delays
- Budget modifications can pause invoicing in the system and require back-and-forth between agencies and nonprofit providers
- Other factors include recoupments from prior fiscal years
- MOCS implemented a 25% allowance clause in 2023 to reduce the need for amendments, which reportedly reduced overall amendments by 67%
Julie Won
2:28:56
Yes they do need more staff.
2:28:58
Some contracts are structured to span multiple years which should in theory reduce administrative delays, yet providers continue to report significant payment lags on even under these multi year agreements.
2:29:10
Why do payment delays persist even when contracts are designed to cover multiple years?
2:30:07
Can you also help us understand how much is owed in amendments that cannot be submitted yet?
2:30:13
We get this complaint a lot.
Michael Sedillo
2:29:19
Thank you for the question, Chair.
2:29:21
A variety of reasons.
2:29:23
I think for multi year contracts, definitely the start of the fiscal year advance is something that is easy to do, but oftentimes there are budget modifications and when there's a budget modification it pauses invoicing in the system and there's a back and forth that has to happen between the agency and the nonprofit provider to ensure that budget modification is agreed to.
2:29:44
Or it may be a situation where we have recoupments that have to happen and so the nonprofit providers will be getting in invoices that reflect recoupments from potentially even prior fiscal years.
2:29:58
So there's a number of reasons but I think what we're seeing in the data is a lot of times it's due to budget modification back and forth with agencies and nonprofit providers.
2:30:15
I'll start.
2:30:16
I don't know if you have the number, Director Yu.
2:30:18
Great question.
2:30:19
And I think that's why, and this was a part of the joint task force report from 2022 to really allow some flexibility from the amendment process.
2:30:28
And so what Mox implemented in 2023, if I remember correctly, was the 25%, what we call the allowance clause.
2:30:34
So that's that additional budget that can be tapped into avoiding an amendment process.
2:30:40
And I think what Max has shared is that that reduced overall amendments by 67.
2:30:47
And so I think we're doing what we can and are interested in, if possible, to even go higher and allow for more contracts to avoid an amendment registration process and instead use this allowance clause.