City Hall is getting worse in delivering contracts on time — despite years-long promises to fix slow payments — and nonprofit organizations are suffering the most, a new audit finds.
The report from the City Comptroller’s Office, which is tasked with approving almost all city contracts, concludes that despite efforts from Mayor Eric Adams to speed up contract payments, 80% still arrive to the comptroller after their scheduled start date — which was the same percentage in the previous fiscal year.
Payments to nonprofits have worsened, rising from 88.5% in fiscal year 2023 to 90.7% in fiscal year 2024, the audit found.
And almost 40% of contracts are over a year late.
The audit follows reporting by THE CITY in November and February of last year that showed organizations and companies have had to come up with other ways to make payroll and cover the human services they provide.
“We are failing our nonprofit partners by not paying them on time,” City Comptroller Brad Lander — who is running for mayor himself — said in a statement, noting the organizations provide vital services like childcare and shelter.
“If we expect efficient and effective city services, the Adams administration needs to be more efficient and effective in submitting contracts for review that provide these services,” he added.
The delays also hinder smaller companies and mom-and-pop vendors from doing business with the city, since those businesses often do not have the excess funds to fill the gaps while awaiting city payments, Lander’s report found.
THE CITY reported extensively last year on the issues from the nonprofits who do significant work on behalf of the city, and the financial distress late payments cause them. In February, the head of the Mayor’s Office for Nonprofit Services stepped down, causing organizations to fear payments wouldn’t improve.
In late November, multiple nonprofits told THE CITY that the issues had persisted and worsened — despite efforts from Adams’s administration to fix things.
Several nonprofit leaders — some who spoke on the condition of anonymity to both not frighten their staff or anger City Hall — said they considered layoffs, taking out exorbitant lines of credit or loans, or fundraising just to pay off the interest of loans rather than focusing on more services.
Shervon Small, executive director of Legal Services NYC, said although the city finally paid out most of their owed contracts, “We are still concerned about the pace of payments and the impact delays have on our ability to serve vulnerable New Yorkers, including those facing eviction and homelessness and immigrant New Yorkers.”
She said the delays from City Hall forced them to “max out lines of credit, pull money from other programs, and dip into reserves to make payroll.”
One group, Hester Street Collaborative, which worked primarily in community engagement and neighborhood planning, “sunsetted” operations late last summer after over 20 years in existence.
In January, Adams issued an executive order requiring every city agency to designate a “chief nonprofit officer” to speed up payments to providers.
He also appointed a new executive director of the Mayor’s Office for Nonprofit Services, Michael Sedillo, and announced the launch of a new “working group” with Deputy Mayor Ana Almanzar and others to find ways to improve payments.
A spokesperson for the mayor, Liz Garcia, did not respond to a request for comment on Lander’s audit, referring questions to the Mayor’s Office of Contract Services, which did not respond.
Our nonprofit newsroom relies on donations from readers to sustain our local reporting and keep it free for all New Yorkers. Donate to THE CITY today.
The post City Hall Contracts Lag Got Worse, Comptroller Audit Finds appeared first on THE CITY – NYC News.
