Massive delays in completing and approving social service contracts in Baltimore are straining non-profit organizations that provide vital help to city residents – and are leading some groups to abandon doing business with City Hall altogether.
A new Abell Foundation report released this week analyzed 115 federal Community Development Block Grants distributed by Baltimore city agencies in 2021 and 2022, totaling $27 million. Researchers found that the median time from when a non-profit organization learned it was selected for a project to the date of approval by the city Board of Estimates – which is needed before invoicing can begin – was 438 days, or about 14 months.
During that entire period, the non-profit organization was expected to be doing the work and awaiting compensation. One manager of a small non-profit “reported not taking a paycheck for nearly a year to avoid layoffs and service disruption because a city contract was delayed,” according to an interview with the report’s authors.
Within its $4.1 billion budget, Baltimore distributes hundreds of millions yearly for non-profits to help residents facing housing challenges, unemployment, and other needs. The largest distributors of grants, many of which are from federal and state sources, include the Department of Housing and Community Development, the Baltimore City Health Department, the Mayor’s Office of Homeless Services and the Mayor’s Office of Employment Development.
The delays seem to disproportionately harm smaller non-profit organizations. Larger ones may have enough resources to cover the gap, the reporter’s authors said. City Housing Commissioner Alice Kennedy, whose agency distributes millions in block grant funds, acknowledged that delays may be unavoidable – and have been exacerbated in recent years by Covid pandemic disruptions, and federal funding uncertainty. “Organizations must assess whether they have the organizational and financial capacity to receive funding that comes with many strings attached and is not able to be immediately available,” she told the report’s authors.
The Abell Foundation report, entitled “Costly Delays: Diagnosing and addressing operational delays in Baltimore’s nonprofit contracting process,” also offers several proposed solutions based in part on a review of best practices in other cities.
The Abell Foundation suggests:
Prepayment of some grants: A simplified contract approved by the Board of Estimates at the start of services could provide 25% of the contract upfront.
Process mapping and digitizing: Developing clear process maps so both city agencies and grantees have a clear understanding of steps needed, along with “Service Level Agreements” that hold agencies to benchmarks. Too often now, tracking and approvals are done by email exchanges that vary widely and create gaps. And if a department manager leaves, the non-profit can be left in the dark for weeks or months. Grantees say there is a frustrating “black box” of no information about their contract status.
Creation of a contract improvement team: A team within the Comptroller’s Department of Accounts Payable or the Mayor’s Office of Performance and Innovation (CitiStat) could establish a workflow assessment to identify and diagnose bottlenecks.
Expedite renewals and multi-year contracts: Right now, second year approvals are treated like the first year, grantees say.
The Abell report was prepared by public policy students from the Harvard Kennedy School of Government, and includes both data analysis and interviews with grant recipients, agency heads and others. The grantees all chose to stay anonymous to minimize risk of disrupting funding.
The funding delays have been well known, and may not be entirely avoidable because of requirements of federal grants, which contain strict monitoring, tracking and compliance standards, said Celeste Amato, chief of staff in the Office of Comptroller Bill Henry in Baltimore.
It is challenging to make improvements to the entire system because each grant bucket has different requirements, and the partnerships with non-profits take place at the agency level, Amato said.
However, she acknowledged that transparency and information sharing could help with the frustrations that smaller organizations often face. The federal grant system, she said, is inherently designed to favor larger organizations with financial reserves and strong accounting and tracking practices.
The Abell report is “not a wake-up call; we know it; ” Amato said, adding the the comptroller’s office, the city finance department and other agencies are committed to improvements and a “transparent process that people might not love, but understand.”
After a recent auditor’s report found that the City Department of Finance Bureau of Accounting and Payroll Services was not meeting standards for invoice processing, Comptroller Bill Henry announced a City Charter amendment to create a Department of Accounts Payable responsible for vendor payments. The charter amendment passed, and the change will go into effect January 2023.
But those involved agree that the bigger delays are caused not by invoice processing, but on finalizing contracts with city agencies, and then getting Board of Estimate approval.