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Q&A
Impact of proposed legislation on agency cash flow and budgeting
0:41:50
·
109 sec
Council Member Adams inquires about how the proposed legislation would impact agency cash flow and budgeting practices. The panel discusses potential challenges and considerations related to contract spending and funding sources.
- Michael Sedillo points out that providers don't always spend the full budgeted amount, with some spending under 60% or 50% of their contracted budget
- The panel mentions considerations for federal and state funding that comes at different periods of the fiscal year
- Adams expresses concern about agencies that don't get paid at all, suggesting this is a more significant issue than underspending
Adrienne E. Adams
0:41:50
Okay.
0:41:51
How do you think this proposed legislation would impact your agency's internal cash flow and budgeting practices?
0:42:41
I hear you and we've heard that also, but I don't think that that is nearly as close to those that don't actually get paid.
0:42:50
So do you have any kind of inclination and can you do a little compare and contrast as far as those agencies that don't necessarily draw down the funds compared to those agencies that don't get paid at all?
Michael Sedillo
0:41:59
Thank you for the question speaker.
0:42:02
I think one thing to think about is that we don't always see a provider spend the full budgeted amount.
0:42:11
In some cases there are some agencies that their providers spend under 60%, under 50% of their contracted budget.
0:42:19
So I think in addition to any cash flow considerations and then you add on to that the considerations of federal funding, state funding that comes at different periods of the fiscal year, we also just want to think through about well what is the average amount of funds that are actually spent on the contracted budget such that we don't put our non profit providers in a situation where they have to claw back funds.
0:43:02
Well we certainly work with agencies every day and show them data as to where there might be bottlenecks in the process, and you know it's not as simple as just contract backlogs or backlog budget modifications or backlog invoices.
0:43:17
It's really the whole process.
0:43:19
And of course it is a dance that our public servants do with our nonprofit providers.
0:43:23
And so Director Yu mentioned, a lot of the work of public servants at agencies is to work with nonprofit providers after having advanced the funds to ensure that there's a regular invoice process and a recruitment process to get the funds back.