A National Imperative: Joining Forces to Strengthen Human Services in America (Jan 2018)

Late payments and extended accounts receivable cycles fromgovernment funders. Late payments can severely disrupt cash flows for human services CBOs. If funding is decreased, CBOs may have difficulty recouping costs incurred and investments made to meet their contractual obligations. In some cases, reimbursements may be delayed by months or even years. One CBO leader noted that he has been waiting six years for $500,000 from the state as reimbursement for setting up and operating a pilot program. His organization had adequate reserves to fall back on after making the upfront investments for the program, but not all human services CBOs have the reserves to remain strong in such a scenario. In addition, many government contracts prohibit CBOs from assigning payments to a bank or other third party, making it more difficult to borrow against them. High administrative burdens for government contracts. Contractual rules often place significant burdens on human services CBOs, running up costs and impacting their ability to deliver efficient and effective services. For example, a Florida human services CBO executive stated that social workers at his organization can spend up to 75% of their time filling out paperwork to meet reporting requirements. As a result, social workers are able to spend less time working closely with clients to ensure their needs are met. As suggested by an Arizona-based human services CEO, “Regulators need to spend time listening to the people actually doing the work. They don’t realize it, but when they roll out new regulations, it can have a big impact on our clients. The more time we must spend on compliance, the less time we have to serve our clients” Restrictions on how human services CBOs may spend their funding (e.g., inflexible funds, artificial spending caps). Government contracts and grants often specify how human services CBOs are allowed to use funds, stipulating in detail the actions they must take in providing services and care. Similarly, private funders often place restrictions on their donations so that CBOs must use them for specified purposes. These restrictions can prevent CBOs from adequately covering their costs, meeting their needs as organizations, and meeting the needs of the community.

“They delay payment because they know they can get away with it for a while. I get it: they have budget pressures, too. But when they don’t pay us, we are, in essence, a zero-interest creditor to the government.”

– Human services CBO CEO, Washington

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