Nonprofits hope legislation before Pritzker will speed up payments from state
Community Assistance Programs, a Chicago-based nonprofit providing employment training and job placement, typically has to wait several months for payment from the state.
Through a government contract, the organization has served more than 2,000 people per year in Illinois. But the state, in return, has not always made that easy, CEO Sheryl Holman said. Late payments and contract delays have created significant barriers for organizations like hers.
For example, Holman submitted a bill to the state in February for contracted services provided the month before. The state finally paid the nonprofit in April, she said.
“It’s like everything’s against you doing this,” Holman said.
Community Assistance Programs is not the only organization expressing frustration with the state’s contracting processes. According to a 2023 survey of human services government contractors by the Health and Human Services Coalition of Illinois, at least 25% of state contracts were not paid on a timely, ongoing basis.
The issue was especially prevalent for nonprofit contractors with small budgets and those serving or led by people of color, the survey found.
“The most unconscionable thing is that the poorest neighborhoods were the ones that were not getting paid on time,” said Holman. “So it puts some agencies out of business, because they can’t weather it.”
A representative from the Illinois Comptroller’s office, which processes and pays vouchers, said the office typically pays within 14-15 business days. But the office only tracks based on the date it receives the bill. Payments can be further delayed if the state agency involved in the contract doesn’t send them to the comptroller’s office in a timely fashion.
House Bill 4340 aims to address those delays by mandating that agencies send vouchers to the comptroller “within 30 calendar days of receipt” of a “proper” bill or invoice from a contractor. Agencies would also have 30 days to notify contractors of defects in a bill or invoice.
In addition to late payments, contractors have also faced delays in receiving state contracts. According to the Health and Human Services Coalition study, over half the respondents said that in fiscal year 2023, they did not receive their contracts before the start of the year. Late contracts can prevent organizations from providing services right away.
State Sen. Mike Halpin, a Democrat from Rock Island, and sponsor of the reform bill, said he hopes the package will “make government easier to work with,” especially for small nonprofit agencies.
“Many of these nonprofits are, rightfully so, hyper-focused on the mission and the services that they provide, and it can be overly burdensome for them to try to apply for state grants, because of the paperwork delays and getting approval, delays in getting the money in hand,” Halpin said. “And so they face challenges that are different from some of the bigger vendors or bigger contractors that do business with the state.”
Legislative package
Aside from addressing voucher delays, HB 4340 also requires that contracts be issued within 60 days of the start of the fiscal year or 60 days after the required documentation has been completed. It also changes the Court of Claims process, the channel through which contractors can seek out late payments.
In a statement to Capitol News Illinois, a spokesperson from Gov. JB Pritzker’s office said the office will monitor and review the legislation’s budgetary impacts before deciding whether to sign the legislation.
“Any legislation that requires additional state resources will be carefully reviewed with budgeteers to understand the fiscal impact,” the spokesperson said in a statement.