The New Jersey Departments of Children and Families (DCF ...



Talking Points

DCF & DHS Amendments to Third Party Contracts

Overview

The New Jersey Department of Children and Families (DCF) and the New Jersey Department of Human Services (DHS) have released policies which amend contracts with providers. These amendments restrict the voluntary sector provider’s ability to operate autonomously and to make important business decisions to ensure the continued operation of their programs and more importantly, the success of the children, youth and families served. The ultimate focus of the contracting partnership should be on program outcomes and the impact on the individuals and families served by DCF and DHS. Neither of these considerations is advanced by the DHS and DCF amendments.

Voluntary sector providers have already made painful cuts to their operations while being called upon to perform more and more in these times of distress. Most voluntary sector providers are already underfunded utilizing precious resources to help provide necessary services to ensure that children and families needs are met. Meanwhile, the proposed amendments call for decreases in State funding for voluntary providers and their constituencies.

The amendments restrict tuition reimbursement; travel expenses; provider meetings; conferences or special events; fringe benefits; employee severance agreements; salary compensation; and vehicle replacements. Singling out the voluntary sector to unique restrictions is arbitrary and capricious since there has been no supporting studies or evidence to justify the restriction.

The amendments are detailed below along with reasons they are not in the best interest of the voluntary sector and ultimately those served by these providers.

1. Tuition Reimbursement/Training Restrictions

These amendments threaten the consistency required for successful outcomes because they will make it difficult to recruit and retain dedicated employees. Curtailing tuition reimbursement or training will discourage talented professionals from staying in the voluntary field. Field-appropriate education is a cost-effective way to enhance program quality, boost retention and lower the administrative costs associated with higher turnover.

2. Salary Compensation for Executive Staff

The amendments implement ceilings for maximum DHS and DCF payment toward executive salaries based on a sliding scale according to the gross revenue of the organization. The maximum is set at the maximum salary for a commissioner in the state of New Jersey. It is impossible to compare a voluntary sector executive’s compensation and benefits to that of a state commissioner because the state is able to offer insurance and benefits that are unavailable to the voluntary sector. Selecting the commissioner’s salary as a ceiling is arbitrary.

No one is against fair compensation for voluntary sector executives. But it’s an agencies’ board of trustee’s responsibility to fully exercise fiduciary duties over the non profit corporation. The real challenge many boards face is not how to reign in excessive compensation but rather how to find the resources to pay appropriate salaries. Attracting and maintaining qualified executives is the key to ensuring agencies run efficiently and are providing the highest quality services those in need.

The voluntary sector is already governed by statute (The NJ Non-Profit Corporations Act N.J.S.A. 15A:1-1, et seq), regulation and pre-existing administrative rule.

The contract amendment limits the salary derived from the contract so if an agency chooses to compensate its executive with more money the difference would be made up through unrestricted revenue. The problem with this is unrestricted revenue is already being used to pay expenses state contracts don’t cover. Agencies are value added to state contracts by providing a host of services above the contracted terms.

3. Salary Compensation Limitation for Physician and Advanced Practice Nurses

The amendments impose salary limitations that will make the current staffing and compensation of physicians and advance practice nurses (APN) more difficult. There already exists a deficiency of physicians and APNs willing to work with individuals served by voluntary sector providers. Limiting their possible compensation from state dollars through a third party contract will make the difficult task of finding these professionals nearly impossible.

4. Compensation Limitation for Fringe Benefits

The amendments impose compensation limitations on fringe benefits which creates another hurdle in a nearly impossible fiscal time. The current cost of benefits is rising and the primary source of revenue of many providers is third party state contracts. Providers may provide a different level of cost contribution based on a number of different aspects of employment. The length of an employee’s time with the organization, the classification of that employee: single, parent with child, self and spouse, or family, agency revenue, etc. Each of these factors can determine a different level of contribution on the part of the state contract funding for these classifications.

Sound Bites for Commenting on Contract Amendments

1. "The ultimate focus of the contracting partnership should be on program outcomes and the impact on individuals and families served. Neither of these are advanced by the amendments."

2. “By definition non-profit, 501(c)3 organizations are mission, not bottom line driven, entrusted to serve the public while being good stewards of the funding provided. By further amending the current contracting language, the state is questioning the integrity of their non-profit partners.”

3. “Non-profit providers are not simply vendors of services: they are true partners. These agencies and organizations offer much more than expertise and compassion. They play a key role in the child welfare system, investing extra resources and leveraging huge community resources by mobilizing thousands of volunteers and tens of millions of dollars in philanthropy to deliver efficient, effective and high quality services for wounded and vulnerable children.”

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download