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Report on Delayed Contract Payments in Maine

by Abi Griffith

In May 2009, The Maine Association of Nonprofits sent out a survey to the greater Maine nonprofit community seeking feedback about the status of government contract payments. The results were mixed. Of the thirteen who responded, about half reported that their payments were coming in on time.

Those who reported receiving late payments are being severely affected in some cases. Late payments range from a few months to a few years late. On the State level, the majority of late payments were coming from the Department of Health and Human Services, which is affecting MaineCare and Medicaid payments, as well as other mental health and substance abuse treatment programs. These late payments are reverberating through some organizations and deeply impacting their sustainability and ability to meet their missions.

One survey respondent says, “We function under constant threat of not being able to meet our payroll or benefit payments. We run on the edge of our line of credit constantly.” Another says, “[We are experiencing] serious damage to [our] cash flow, causing us to fully expend our line of credit and [we are] at risk of closing the agency due to outstanding payments of $200,000.” Additionally, nonprofits recieving late payments reported that their vendor relations are strained due to late or outstanding bills. This highlights the cross-sector effect of these delays.

Has your nonprofit been impacted by delayed contract payments? We want to hear from you. We continue to communicate this information to the National Council of Nonprofits, and encourage you to post your thoughts here or to contact us.

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