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TESTIMONY
Testimony by Lauren Siciliano, Chief Operating Officer of the Legal Aid Society, on contracting and payment challenges
0:32:25
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4 min
Lauren Siciliano, Chief Operating Officer of the Legal Aid Society, describes how city contracting and payment delays critically impact their ability to provide legally mandated services. She highlights significant delays preventing invoice submission, burdensome and inconsistent processes for reimbursement (especially for budget modifications), and the resulting cash flow crises that force nonprofits to take out loans. Siciliano contrasts this with city agencies that start the year funded and receive additional allocations, while nonprofits constantly wait for funds even after completing work.
- Key issues include delays preventing invoicing (sometimes for months) and complex, agency-specific processes for getting reimbursed, even for completed work.
- These delays create unsustainable cash flow problems and uncertainty, particularly for smaller nonprofits.
- Nonprofits face a structural disadvantage, lacking confirmed funding at the start of work and losing unspent funds even when delays prevent timely spending.
Lauren Siciliano
0:32:25
Name is Lauren.
0:32:27
I am the chief operating officer of the Legal Aid Society.
0:32:29
Thank you so much
Diane Savino
0:32:30
for the opportunity to speak today.
Lauren Siciliano
0:32:32
The Legal Aid Society is the largest nonprofit law firm and we are part of a coalition of nonprofit civil legal service providers in New York City.
0:32:43
Collectively, we provide constitutionally, legally mandated representation to hundreds of thousands of.
0:32:50
We defend people against incarceration, eviction, and family separation.
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We connect people to life saving benefits, housing, and support.
0:32:59
We are a lifeline.
0:33:02
The services that we provide are supported by city initiatives and funding.
0:33:07
The funds we receive, including through baseline and discretionary contracts and initiatives including the indirect cost rate, and workforce enhancement are essential for us to continue to to deliver these services to vulnerable New Yorkers.
0:33:20
Without timely access to these contract funds, we are not able to hire and retain the attorneys, paralegals, investigators, social workers, and others who are critical to doing this work.
0:33:31
Recent changes from the city, including the recent contract advances, allowance and clause amendments, the three year COLA initiative, and other changes have been a step in the right direction.
0:33:41
But despite these changes, chronic underfunding and mounting contracts and payment plays jeopardize our ability to provide essential services to new workers.
0:33:51
Our city contracts, like many nonprofits, are cost based, which means we only receive reimbursement after services have been delivered.
0:33:59
The city's contracting and payment challenges touch every point along the timeline from RFP to registration to invoice of employment.
0:34:07
Today, I'd like to talk about just two examples of the critical issues contracted in payment process that endanger our ability to make a payroll vendors, experts, and to continue doing this work.
0:34:19
These issues are especially dire for smaller nonprofit care coalition and noncontracts subcontract with to deliver essential services.
0:34:28
The first issue are delayed preventing us from submitting invoices.
0:34:31
To just give you one example, on fiscal year twenty five, our contract that began July 1, we were only able to begin submitting invoices in January.
0:34:40
That means we had done six months of work before we were able to submit invoices.
0:34:45
Now through a lot of lobbying and advocacy with nonprofits that take out high interest loans and credit lines of credit, we were able to successfully get additional advances to address the issue, but these stop gap measures are extremely challenging and make it impossible to plan and sustain cash flow.
0:35:04
The challenges also don't end once we can begin submitting invoices, which is the second issue that I'd like to talk about today.
0:35:11
When submitting invoices for budget modifications, we face an incredibly onerous and ever changing submission process just to get reimbursed for the work that was already completed.
0:35:21
It involves an extremely detailed line item review, and the process differs greatly from agency to agency, which organizations like us that have contracts with multiple agencies makes it extremely difficult.
0:35:35
This is long and still working to close out invoices from prior years at the same time that you're submitting invoices for the current year creates really unsustainable issues for our cash flow and uncertainty.
0:35:46
I will say more broadly that nonprofits like us start at an extraordinary disadvantage.
0:35:50
While city agencies start the year with their funding and routinely receive additional allocations for things like, let's bargain agreements, health care cost increases, utility rent increases, nonprofits like us do not.
0:36:04
We are constantly waiting for our funding to be confirmed work even once that work has been completed.
0:36:10
And then when we're not able to spend all of the money in our contract because the funding was never confirmed or we didn't receive it in time, the city takes the funding that we don't spend back, effectively cutting our.
0:36:23
Taken together, these issues mean that we cannot access funding in our contracts or funding intended for us, threatening the ability for nonprofit sites to operate critical city initiatives and support the New Yorkers.
0:36:36
Really appreciate appreciate the opportunity to talk about this issues.
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Testimony by Michelle Jackson, Executive Director of the Human Services Council, on the nonprofit payment crisis and proposed charter reforms
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Testimony by Frederick Shack, CEO of Urban Pathways, on the broken contracting system and solutions for accountability, transparency, and fairness