By Mark J. Piszko, CPA, CGMA, Partner
New York City-funded not-for-profit organizations, particularly health and welfare providers, received welcomed news from Mayor Eric Adams on April 29. The mayor announced that the city will increase the amount available for advance contract payments to over $5 billion in the fiscal year ending June 2026. That is the highest amount ever, nearly doubling the estimated $2.8 billion in contract advances the city has paid so far in fiscal 2025.
At the beginning of each fiscal year, the city provides up to 25% of contract amounts to various not-for-profit providers. The intent of the advance payments is to relieve financial and operating pressures for organizations funded by the city as they continue to provide essential services to those most in need. The mayor’s historic increase in advance contract payments will significantly impact the amount of available funding organizations will receive at the start of their fiscal years.
The increase in advance payments comes at a time when there is a serious delay and backlog in payments by the city to service providers. The slowdown in payments has caused cash flow issues for not-for-profits and forced many to turn to banks and creditors for lines of credit or short-term loans as they await payment from the city for services rendered.
According to officials, the city is increasing efforts to address and close-out contract amounts from prior years that have not been paid. The Mayor’s Office of Contract Services recently completed its Spring Contract Backlog Initiative and, as a result, more than $700 million of previously backlogged contract payments have been released to providers. This “clean-up” of funding will, by all estimates, pave the way for more timely payments by the city on its current contracts.
The response by New York City-funded not-for-profits has been overwhelmingly positive, with many praising the mayor and expressing relief that the additional funding will enable them to continue their work with less concern about financial stability.
Service providers should contact their New York City funding agencies to ensure they understand how Mayor Adams’ increase in advance contract payments and backlog initiative will benefit their organizations.
Contact Us
For more on this important funding milestone or any other questions, contact your PKF O’Connor Davies client service team or:
Mark J. Piszko, CPA, CGMA
Partner-in-Charge
Not-for-Profit Services
mpiszko@pkfod.com | 646.449.6316