New Report Says Illinois Ranked Worst in Nation for Late Payments to Human Service Agencies; Illinois Substance Abuse Providers Owed $34 million

(Chicago, IL) — October 8, 2010. A new report says Illinois is the worst state in the nation for late payments to non-profit human service providers, as Illinois’ substance abuse prevention and treatment providers are waiting on more than $34 million from the state, according to advocates.

”Illinois is failing its residents just at the time when they need high-quality services the most. Unfortunately, this is just further evidence that Illinois’ system for human services is broken and needs to be fixed,” said Laurel O’Sullivan, Vice President, Public Policy, at Chicago-based Donors Forum.

According to the new report by the Urban Institute, Human Service Nonprofits and Government Collaboration, 72% of Illinois human service nonprofit organizations report delays in state reimbursements for services rendered, compared to 41% of non-profit providers nationally.

A recent survey by the state’s top substance abuse prevention and treatment advocacy group revealed that, among 24 community providers alone, the state owes a total of $34 million to them for both FY10 and FY11: FY10: $19 million and FY11: $15 million.

“Illinois owes substance abuse prevention and treatment providers more than $34 million, stretching back months,” said Illinois Alcoholism and Drug Dependence Association CEO Sara Moscato Howe.

“Our agencies have essentially exhausted their lines of credit and exhausted their ability to guarantee paychecks to employees who are critical care providers.”

Meanwhile, Illinois Comptroller Dan Hynes on Wednesday reported that Illinois had $5.1 billion in unpaid bills at the end of December. In addition, it faces $2.25 billion in short-term loans that the state must soon repay, plus another $1.4 billion in unpaid health care bills that have not yet been sent to the Comptroller’s Office. The state’s effective bill backlog stands at more than $8.75 billion.

“This ongoing fiscal disaster is threatening to permanently harm programs and services serving children, seniors and the disabled and if that is allowed to happen, this state will have failed our most vulnerable citizens,” Hynes said.

State vendors, including health care providers and social services providers are waiting 92 business days to be reimbursed, or more than 4  months. That delay is almost double the 48 business-day delay at this time last year. Many are even waiting six or seven months for payment, according to Hynes.

The state’s cash flow position already has declined by $4.1 billion over the past year, Hynes said. As a result, the state using its first $3.9 billion in revenues this fiscal year on last fiscal year’s bills, the comptroller noted.

According to the Urban Institute report, Illinois also ranks in the bottom nationally in two other key indicators of program quality: payments failing to cover the cost of services and unilateral changes by government to contract terms mid-stream.

Among the report’s other findings:

  • Almost two thirds (65%) of Illinois nonprofits report freezing or cutting salaries and more than half (54%) have cut jobs due to late payments.
  • Two thirds (59%) of Illinois nonprofits say that government reimbursements don’t cover costs, earning the state the ranking of third worst in the nation.
  • Illinois was also third worst (72%) in governments changing the terms of contracts and grants midstream, which makes it difficult to prepare reliable budgets or service programs.

Though signs of improved economic conditions nationally have emerged, Illinois’ revenue this year continue to drop like a stone. State corporate income tax receipts are down 16.3%, sales taxes 12.6% and individual income taxes 7.6%, compared to the same period last year, according to Hynes.

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1 Comment

  1. Thank you so much for covering an issue that is so important to nonprofits across the country. We invite interested people to read more about the report here:

    Delia Coleman
    Public Policy Mgr.
    Donors Forum


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