Connecticut state agencies are among the nation's worst contractors for nonprofits hired to provide human services -- they're notorious for paying slowly or not in full, and altering contract terms midstream, according to a national survey.
The Connecticut Association of Nonprofits (CAN) says the findings released Thursday by The Urban Institute in Washington D.C., come as no surprise to its members.
"The news from the Urban Institute report confirms what nonprofits and the people we serve have known since well before the recession began: the contracting system is broken and all of us in the community are paying the price," said CAN Executive Director Ron Cretaro.
"Fixing the system for the benefit of the people of Connecticut,'' Cretaro said, "must be an imperative of nonprofits and policymakers, including candidates for office, and we call on all parties to commit to working together for responsible solutions."
The institute counted 509 Connecticut nonprofits that have state contracts valued at $100,000 or more to provide human services. The survey did not indicate how many of them responded, nor did it identify which state agencies use nonprofit services the most.
But those that did respond painted a gloomy portrait of what it's like doing business with some Connecticut state agencies.
Among all 50 states, Connecticut was the third worst for problems and concerns with late contract payments. Often, nonprofits are providing services under contract with the state and having to wait to get paid, which creates significant cash flow problems, the survey found. A 2009 CT Nonprofits' report shows that some providers wait upwards of 90 days to receive state payments.
Connecticut was seventh worst for government payments not covering the full cost of contracted services. Three out of four nonprofits indicated that government contracts limit the amount of organizational indirect costs, such as payroll, administrative costs, rent and utilities, that will be reimbursed; thus forcing the nonprofit to spend more time raising private donations and less time providing direct care.
The ranked eighth from the bottom for government making changes midstream to contracts/grants. Nonprofits in Connecticut, the institute says, are well versed with signing a contract for one deliverable or amount of money and having that changed midway through the year.
The only good news for Connecticut in the survey is that the state ranked among the 10 best for having simplified contracting and reporting procedures.
A spokeswoman for the state Department of Administrative Services referred queries to individual state agencies that use outside vendors to deliver human services.