OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-432
AN ACT CONCERNING STATE CONTRACTS WITH NONPROFIT
HUMAN SERVICES PROVIDERS.
Primary Analyst: LG 4/9/24
Contributing Analyst(s): LD, TM, NN
Reviewer: RW
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 25 $ FY 26 $
Policy & Mgmt., Off. GF - Cost Up to
4,400,000
400,000
State Comptroller - Fringe
Benefits
1
GF - Cost 169,000 169,000
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill results in a cost of up to $4.4 million in FY 25 and
approximately $400,000 in FY 26 to the Office of Policy and Management
for various requirements including annual reviews related to nonprofit
human service providers and a review of Core-CT to detect
inefficiencies.
The cost to OPM consists of four new positions and associated
training and supplies at approximately $419,000 in FY 25 and $411,500
FY 26.
2
There is a corresponding cost of $169,000 in FY 25 and FY 26 to
the Office of the State Comptroller (OSC) for associated fringe benefits.
1
The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.25% of payroll in FY 25.
2
The four positions in OPM consist of two account examiners, one grants and contract
specialist, and one staff attorney. 2024SB-00432-R000397-FN.DOCX Page 2 of 2
The bill also results a one-time cost of approximately $3 million to
OPM in FY 25 for vendor costs to meet the January 1, 2025, review
deadline. This includes a consultant to conduct research on the existing
purchase of service contracts and reporting requirements.
3
There is also
a potential cost of $1 million to the extent Core-CT requires any changes
or upgrades.
The bill requires OPM to conduct: (1) annual reviews regarding
purchase of service contracts with nonprofits human service providers,
(2) annual reviews regarding reports that nonprofit human service
providers must file with state agencies to determine burdensome or
duplicative reports, and (3) a review of Core-CT to detect inefficiencies.
If inefficiencies are detected, the bill requires OPM to work with OSC to
update the features. The bill also requires OPM to submit annual reports
beginning February 1, 2025, related to the annual reviews.
The bill also requires state agencies contracting for direct human
services to pay providers within 30 days of service delivery. While the
new parameters may shift the timing of payments to providers, they do
not alter the overall value of the contracts. State agencies may incur
administrative costs to the extent they are required to modify their
payment structure and hire additional staff to satisfy the 30-day
payment deadline, as outlined in the bill. For context, the starting
salaries for related fiscal staff range from approximately $64,400 to
$98,000 annually.
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to inflation.
3
OPM estimates there are more than 1,400 existing purchase of service contracts that
would have to be reviewed.