Nonprofits struggle to stay open while waiting for promised government funds
Published: February 25, 2013
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Nonprofits in the territory are struggling to keep their doors open and to pay staff after government agencies have delayed processing grant awards and General Fund allotments well into the second quarter of fiscal year 2013.
The organizations feed and shelter the homeless, take care of the mentally ill, aid battered women, protect abused children, give rides to the elderly and provide many other vital services that government agencies do not.
However, when it comes to getting the funding they have been promised, many of the territory's nonprofits are completely down and out.
Government officials from multiple departments supplied vague or contradictory information, or did not return phone calls, about why the delay has occurred and when the nonprofits will have their checks in hand.
Catholic Charities, the Women's Coalition, the St. John Community Foundation, Kidscope, Inc., The Family Resource Center, 10,000 Helpers, Clear Blue Sky, Virgin Islands Volunteer Advocates for Children and Virgin Islands Partners in Recovery reported this week that they were owed a total of $307,642 from grants or allotments for the first quarter of fiscal year 2013, which was from Oct. 1 to Dec. 31, 2012.
The total owed would be almost double if the government could be held to a strict accounting of the fiscal year's quarterly schedule, as the second quarter of fiscal year 2013 began Jan 1.
In addition, some of the agencies reported being owed funds from the last quarter of fiscal year 2012 or being owed local or federal grant money separate from their General Fund allotments.
"We are scrambling to keep the families receiving services and to keep everyone paid," said Vivian St. Juste of The Family Resource Center, which is owed $13,000. "We have had to delay payroll. We have had invoices that we could not meet. We can't stop our programs because of the needs of our community, so we start the fiscal year in the hopes that funds will come through, but we are operating blindly at this point."
Many nonprofit directors reported that a delay in receiving first quarter allotments is not unusual because that is when government agencies must process the year's grant awards, a four-step process involving layers of paperwork and multiple government offices.
Never have they had to go so long or received so little in terms of explanation for the delays, they said.
The first-quarter allotments were expected no later than Jan. 1, but the V.I. Human Services Department, the agency with whom most of the nonprofits are under contract, did not supply the necessary paperwork for its grant award contracts until mid to late January, putting the schedule for funding off by an entire quarter.
"The first quarter is usually delayed because you are then waiting for the release of the funding," Human Services Assistant Commissioner Michal Rhymer-Browne said
However, according to Director of the Office of Management and Budget Debra Gottlieb, the money for both first and second quarter nonprofit allotments had been encumbered before Jan. 1, meaning it was available for government departments to use to pay their sub-grantees.
In an interview Feb. 15, Rhymer-Browne said that the nonprofits would receive all the money owed from the first quarter, as well as full payment for the second quarter, no later than March 1, a deadline that later was contradicted by Human Services Commissioner Christopher Finch.
"At this point, if all paperwork has been received, before March all grantees should have their first and second quarter allotments," Rhymer-Browne said.
Rhymer-Browne said the delay was in part because of the "learning curve" of three staff members who were new to the process of finalizing the nonprofit grant awards. She also said that the nonprofits themselves had been delayed in getting the requisite paperwork together for their contracts, a charge the nonprofit directors denied.
"We have new staff that came on board as recently as the end of the quarter and the end of the calendar year. Our staff who was primarily doing that retired, so we hired other staff who are then processing these documents. They have done so, and they are doing their best to process the payments," Rhymer-Browne said. "However, the process is also dependent on the quickness of the nonprofits getting their documents to us as well. It has been a combination of efforts and variables."
In addition, the department did not host an orientation with the nonprofits' directors, as they have done in years past at the beginning of the fiscal year to inform them of the necessary steps to take in order to finalize their grant contracts.
Finch said he is sensitive to the plight of the territory's nonprofits.
"We were late, and we apologize for any inconvenience that we've caused to any of the agencies, and if they have called us, we have tried to work with them," he said.
The grant awards still are being processed, Finch said Wednesday. The department's goal is to catch up with allotments by the end of the second quarter, or March 31, and be on schedule for the rest of the fiscal year, he said.
Treating the grant payments as reimbursements is proper and not unusual, Finch said.
"Typically, the Virgin Islands pays for work that's already complete," he said.
Finch said the Human Services Department realized that it would be late in issuing contract paperwork, so it requested that funds be made available so the first quarter allotments could be broken down into monthly payments.
The partial payments were the department's way of giving the agencies some kind of relief while Human Services played catch-up, according to Finch. Some agencies received payments for October and November in late January or early this month.
However, Finch acknowledged that payments for December had not reached the nonprofits as late as Wednesday.
Threats of closure
Meanwhile, three nonprofits reported that staff members had gone without pay for more than one month.
Others reported delays in payroll and problems paying utility bills and vendors.
Many said they did not know how they would continue to operate if the government gets any further off track in its scheduled payments, which make up anywhere between 7 and 100 percent of the budgets for the agencies contacted by The Daily News.
Kendall Tutein, regional vice president of VI Partners in Recovery, which runs the territory's only residential drug rehabilitation center, The Village on St. Croix, said the center is owed almost $400,000 from Human Services, the V.I. Corrections Bureau and the V.I. Education Department for both 2012 and 2013.
The only reason the center has not shut down, according to Tutein, is a line of credit extended it by a parent corporation, the WestCare Foundation.
The discontinuity of government funding was becoming a hardship as the organization is incurring interest and fees it never will be reimbursed for because they are not accounted for in its government contracts.
"If it continues, we might have to close. I am carrying seven months worth of debt," Tutein said. "If we were not affiliated with WestCare, we would have shut down by now; there would be no treatment at all."
On Jan. 22, while director of 10,000 Helpers Shmeika England was at a meeting on "first aid mental health" at the governor's office, she found out that the V.I. Water and Power Authority had cut off the electricity at the homeless shelter and its offices.
England said the nonprofit had been unable to pay its electricity bill since the Human Services Department had held out on the first quarter allotment, worth $16,688. Government funds account for the agency's entire budget, she said.
According to England, Finch was at the Jan. 22 meeting, and she informed him of the situation. He made some phone calls, and Human Services was able to deliver partial payment two days later so that the cash-strapped shelter could continue to operate.
As far as getting a sufficient explanation for the delay and a projection as to when 10,000 Helpers will get the rest of the money owed to it - about $5,600 for the month of December - England said the department's response to her frantic phone calls has been hit or miss.
"Some people in the department are very sympathetic and responsive, but all they can tell us over and over again is that the payment is still being processed," she said. "Still others at the department don't seem to care and have told me that some nonprofits have had to close their doors temporarily. What are we supposed to do, kick our residents out and tell them to come back when we have the money? There are 10 homeless people living here."
Shutting down the buses
Celia Kalousek, director of the St. John Community Foundation, which operates the Dial-A-Ride Transportation and Supportive Services program, said Wednesday the organization had not received any of its first quarter allotment.
The buses that provide the elderly, disabled and poor with rides to work, school and medical appointments will stop running if Human Services does not come through with the first quarter's check for $11,000, according to Kalousek.
The year's General Fund allotment of $45,500 is 40 percent of the program's budget, and Kalousek said she has been calling Human Services on a weekly basis for months but has no definitive idea as to when the money will come.
"Right now we are pulling from our own funds in anticipation of being able to pay ourselves back when we get this money, but that will run out soon," she said. "This is a very big strain. At the end of the year, we moved our offices to a smaller place to avoid rent, and we haven't done any office supply shopping. We will not be able to pay the insurance on the buses, and the seniors and disabled of St. John would suffer with no one to take them to their appointments."
Arlene Monaghan, director of Clear Blue Sky, a residential shelter for the mentally ill, said she was "exhausted" after hearing two weeks ago from an employee at the Division of Mental Health, managed by the V.I. Health Department, that a check for $18,000 earmarked for Clear Blue Sky from a federal fund had been lost. The check was an allotment for fiscal year 2012, and this is the second time the division had lost a check for her organization, Monaghan said.
She said she has not drawn a paycheck since last year and has been so overwhelmed with the day-to-day running of Clear Blue Sky that she had not done her due diligence when it came to pressuring Mental Health to come through with the money.
"I am running this program every day. It's hard to build a road and drive on it at the same time," Monaghan said. "I have to choose to either help the people or go fight the system. It's a scary place to be."
Director of Mental Health Doris Farrington-Hepburn did not return two messages seeking comment for this story.
"What happens is the nonprofits do all of the work that the government does not do, and they are quite happy for us to do the work, but we are doing so much with so little right now, and it can't go on forever like this," Monaghan said. "The nonprofits get the short end of the stick, but we are doing this because we have heart, and we know the need is there."
- Contact reporter Amanda Norris at 714-9104 or email firstname.lastname@example.org.