Heightened Scrutiny, Increased Training and Further Disclosure Strengthens
Discretionary Funding Process; 51 Member Comprehensive System Raises the Standard in Providing Information to the Public

City Hall – City Council Speaker Christine C. Quinn today announced continued reforms to the City Council’s discretionary funding process. Today’s announcement continues the ongoing overhaul of the budget allocation process the Speaker first began more than four years ago when she first became Speaker. Many of the reforms detailed today were developed in collaboration with the City’s Department of Investigation and Commissioner Rose Gill Hearn.

“The people of New York must have full faith in the way public dollars are allocated,” said Speaker Quinn. “We have made significant progress in improving the budget process over the last several years, and I remain fully committed to making even more reforms and further strengthening the system. I am proud to say that together with my colleagues in the Council, we have come up with increased reforms that will be comprehensive and uniform in its application.”

Online Searchable Database of Discretionary Funding Allocations
Organizations and programs that receive Council discretionary funding will be listed in a searchable database to be posted on the City Council’s website. The database will be searchable by organization name or keyword and by sponsoring Council Member. All information that is currently in Schedule C will be included in the database including: sponsoring Council Member; employer identification number (EIN); amount of funding; contracting city agency; purpose of funds; and, if there is one, corresponding fiscal conduit name and EIN. This information will be made available to the public prior to budget adoption beginning this fiscal year, FY2011. FY2010 information will be posted on the Council’s website and will be available beginning next week.

Online Searchable Database of Applications for Discretionary Funding
Information pertaining to groups that apply for discretionary funding will be provided to the public beginning in Fiscal Year 2012. A new online application process will be instituted the same year, and as a result of this application process, information will be automatically captured in a uniform and efficient manner for all organizations. Information will be fully searchable and posted on the Council’s webpage and will be available prior to budget adoption.

Enhancements to Current Vetting Process
Additional information will now be required for applicants that have not received discretionary funding in the last two years. Specifically, the organization will have to provide information regarding prior funding sources, as well as experience in delivering services for which they are requesting funding from the Council. Additionally, the organization will be required to submit reference checks from prior funding sources.

Non-profits that were created in 2009 or 2010 will be limited to $15,000 in total cumulative funding and an individual maximum of $7,500 per Council Member.

Limits on the Hiring of Consultants
Use of consultant contracts will be limited. Each such contract will be subject to approval by the Council and Agency and the use of the consultant will have to be within the scope of the services to be provided. Conflicts of interest and disclosure requirements will apply to any such contracts.

Restrictions to Leasing Practices
Council Members cannot sublet office space to any person or organization other than another elected official.

Restrictions to Funding Through Fiscal Conduits
Non profits that utilize fiscal conduits will now be subject to a maximum allocation of $10,000 and a minimum allocation of $1,000. Additionally, organizations serving as fiscal conduits will be subject to a prequalification review process and will be limited on the total number of groups for which they can serve as the conduit, with a maximum number of ten groups allowed for neighborhood organizations and twenty-five for citywide organizations.

Increased Training for Recipients of Discretionary Funds
All small and mid-sized organizations are required to attend the Mayor’s Office of Contracts Services (MOCS) corporate governance, fiscal management and compliance training before finalizing contracts for services. In the first round of this program, more than 800 groups received training.

“I applaud the Speaker’s effort to bring more transparency and accountability to government,” said New York State Attorney General Andrew M. Cuomo. “It is a step in the right direction.”

“Citizens Union supports the City Council and Speaker Quinn’s continued efforts to bring additional and needed transparency and accountability to the discretionary funding process,” said Dick Dadey, Citizens Union Executive Director. Tightening the review of the organizations that apply and the increasing the scrutiny of the relationships of the council members to the organization are steps we applaud. Many useful civic groups and social service organizations rely upon these sources of funds to do good work for communities and neighborhoods of New York, but the taxpayers of New York need to have the confidence that their money is going to worthy groups and result in meaningful services being provided. These reforms aid in accomplishing that.”

“The Council is adopting solid measures to ensure oversight and transparency of discretionary spending. Taken with passed reforms, NYPIRG believes these steps should give taxpayers greater confidence that their taxes will be spent honestly and effectively,” said Gene Russianoff, senior staff attorney for the New York Public Interest Research Group.

Common Cause/NY Executive Director Susan Lerner said, “City Council Speaker Quinn and the Council members are to be commended for continuing to seek ways to improve and strengthen the discretionary funding process. After the effort required to put good reforms in place, such as the current rules governing discretionary funding, it is all too easy to consider the job done, and not revisit the issue for evaluation. It is encouraging to see the Speaker and the Council adding improvements like online searchable databases of discretionary funding applications and allocations, increased training for recipients and prohibitions on subletting of space from Council members to the safeguards already in place.”

Speaker Quinn has made reforming the budget process one of the hallmarks of her agenda and has taken a number of significant steps toward creating a more open budget process. Over the last four years, the Speaker has effectively worked to provide information regarding discretionary funding allocations in a more detailed and publicly transparent manner. The Speaker has also successfully overhauled the vetting process for systematically evaluating discretionary funding.