City Hall Contracts Lag Got Worse, Comptroller Audit Finds
City Hall Failing to Deliver Contracts on Time
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.
Audit Reveals Worsening Delays
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.
Nonprofits Hit Hardest
Payments to nonprofits have worsened, rising from 88.5% in fiscal year 2023 to 90.7% in fiscal year 2024, the audit found. Almost 40% of contracts are over a year late.
Audit Critique
"We are failing our nonprofit partners by not paying them on time," City Comptroller Brad Lander 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."
Delays Affect Small Businesses and Mom-and-Pop Vendors
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.
Nonprofits Speak Out
Several nonprofit leaders spoke out about the issues, with some sharing their struggles to make ends meet. Shervon Small, executive director of Legal Services NYC, said, "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." He 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."
City Response
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.
Audit Recommendations
The comptroller’s office has made several recommendations to improve the payment process, including increasing communication with service providers, streamlining the contracting process, and providing more timely and accurate information to service providers.
Conclusion
The audit highlights the need for the Adams administration to take immediate action to address the issue of delayed contract payments, particularly for nonprofit organizations that are struggling to provide essential services to New Yorkers. It is crucial that the city prioritizes timely payments to ensure the continuation of vital services and programs.
FAQs
Q: What is the current state of contract payment delays in the city?
A: According to the City Comptroller’s Office, 80% of city contracts are still arriving late, with payments to nonprofits worsening from 88.5% in fiscal year 2023 to 90.7% in fiscal year 2024.
Q: What are the consequences of delayed contract payments?
A: Delayed payments can lead to financial distress for nonprofit organizations, causing them to consider layoffs, taking out exorbitant lines of credit or loans, or fundraising just to pay off interest on loans.
Q: What is the city’s response to the audit’s findings?
A: The Adams administration has issued an executive order to streamline the contracting process and has appointed a new executive director of the Mayor’s Office for Nonprofit Services. However, the administration has not responded to the audit’s findings, citing the need for more time to implement the necessary changes.
