AN ACT CONCERNING ACCOUNTABILITY IN NONPROFIT CONTRACTING.

File No.:
Bill No.:	HB-5772
PH Date:	3/17/2006
Action/Date:	JFS 3/24/06
Reference Change:	[Click here Enter Chg of Ref.]

To lower the threshold on the dollar value of certain state contracts that are subject to the Freedom of Information Act, provide that salary information relating to employees performing work under such contracts shall be subject to disclosure and require disclosure of certain information by nonprofit agencies who have contracts with the Department of Social Services.

“We need more transparency and accountability in state government, and in private agencies that are contracted to provide state services to the government and the citizens of CT. HB5772 is a good start. That being said, I would like to make a few suggestions.

1. That non-profit contractors should supply a breakdown of revenue if more than 50% of its revenue comes from the state. For a significant number of the agencies…very little comes from other services, fundraising, donations, and other forms of direct public support. If most of the money is coming from the state, the State has the right to know if that money is being used on frivolous expenses such as excessive compensation.

2. These entities should disclose any business and/or transactions conducted between itself, and any entities with relations and/or affiliations with itself, its officers and its board of directors. While many of these transactions are likely legitimate, this can be an easy avenue for kickbacks to family and friends (i.e. paying above market rates, paying for services not rendered), etc.

3. The agencies should provide a list of its board of directors.

4. Finally, it is important that this bill encompass every state agency (i.e. Department of Mental Retardation, Department of Mental Health and Addiction Services, Department of Children and Families, etc.) not just the Department of Social Services.

This bill was prompted by the reality that the system is easily manipulated. Such disclosures will not only help expose such unethical behavior, but can also significantly curtail it as well, since the system will be put under a microscope, ensuring that these dollars are going towards the intended purposes.

“This bill increases accountability to taxpayers by lowering the state contract threshold, at which point a contractor must provide the state with information about the pay of its executives and must abide by the Freedom of Information Act. The current threshold of $2.5 million is far too high. While the bill's threshold of $500,000 is still very high, it is a step in the right direction.”

“The ultimate goal is to have a good mix of direct state services and contracted private services. Without transparency and accountability the state is driving blindly. It is spending hundreds of millions of dollars and the public has a right to know its money is being well spent.”

Matthew Barrett, Director of Public & Government Relations, CT Dept. of Social Services

“The Statement of Purpose as set forth in Raised Bill no. 5772 is to lower the dollar value of certain state contracts that are subject to the Freedom of Information Act and to “provide that salary information relating to employees performing work under such contracts shall be subject to disclosure and require disclosure of certain information by nonprofit agencies who have contracts with the Department of Social Services.” The Department is opposed to this bill.

In addition, section 2 (c) requires DSS to have all of the information collected available on the department's website. The requirement to retain and update this information would be very burdensome, and does not appear to be material appropriate to the DSS website.

Passage of this legislation would only result in nonprofit agencies dedicating staff to compliance with reporting requirements rather than performance of services to clients. In addition, DSS staff and resources not currently budgeted for would be needed to ensure monitoring and compliance of information not currently requested.”

“The Nonprofit Cabinet opposes Raised Bill 5772, an Act Concerning Accountability in Nonprofit Contracting, primarily because the information that is being requested is redundant and not necessarily applicable.

There is an assumption in Bill Number 5772 that QUEST and ISST are the proper tools to use for quality measurement. QUEST is a specific tool that Massachusetts developed and is using to get rid of outdated licensing standards (i.e. Stair height) and replace them with survey questions and quality measures that more accurately reflect the experiences of people receiving supports. I have not been able to find much information on ISST. Unfortunately, there has been little or no evaluation in Connecticut as to how these tools may best serve the population or specifically who that population is, how this language impacts existing licensing regulations, how other state agencies might be impacted and what the cost to the state, clients and nonprofit human service providers might be. It should be noted that there is a quality measurement (Quality Service Review) tool being developed by DMR and providers now.”

“Virtually every piece of information requested in this bill is already disclosed and reported to our funding sources and state agencies of cognizance. We also submit a form 990 to the Internal Revenue Service each year with salary and benefit information and complete financial statements. That information is available on the Internet. Some of us are funded by multiple state agencies each requiring duplicate information on different reporting documents, with different charts of accounts, for different time frames. This bill would require us to report more duplicative information in yet another format to a single state agency that may not be the agency of cognizance at all. These increased reporting requirements will take time and resources away from our primary focus, providing services to people with disabilities and special needs.

I don't understand, if the bill is intended to address non-profit contracting, why most of it applies only to agencies serving the disabled, furthermore I don't understand what this will fix or how it will improve accountability since we already do it.

“….please do not add to our many current administrative requirements. Additional reporting will only take away from our primary focus of serving our clients.”

	Juliana H. Simone	April 7, 2006
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