DHS Must Honor Contracts and Provide Timely Payments to Sustain Youth Services

Good morning Councilmember Frumin and staff of the Committee on Human Services. My name is Jorge Membreño (he/him) and I am the Director of Youth Advocacy at DC Action. I am testifying on behalf of the Youth Economic Justice Coalition, which includes youth homelessness providers that receive funding from the Department of Human Services. Today, I’ll be highlighting the struggles that youth homelessness service providers face with contract and payment delays.

As you know, DHS is the primary funder of youth homelessness programs in DC. This responsibility creates a partnership between the agency and our wonderful community-based organizations, who have dedicated their careers to providing youth with opportunities. Our CBOs provide housing and wraparound services for youth who are finally able to dream outside of their circumstances. Many of these young people are unpacking a bag and putting clothes in drawers for the first time in a long time. Many of them are healing from being rejected by their families for identifying as LGBTQ+. Many of them are finding security in knowing they have a bed to call their own and know that they will be able to eat three healthy meals. More than anything else, these young people are showing the world that they are more than their trauma. 

The life-changing work of our CBOs needs to be valued by the District and their agreed-upon contractual partnership honored. Unfortunately, that partnership is not an equal one, as year after year our CBOs have to front the costs of running their programs because of the District’s unfair reimbursement-based payment model that is then exacerbated by repeated contract and payment delays from DHS. In this fiscal year, FY2025, contract agreements – separate from payments – were not executed until late January and early February 2025, four months after the start of the District’s fiscal year. The contract is only the agreement to provide proposed housing and support services. The purchase order, required by the District’s reimbursement-based supplier system, includes specifications from DHS about the services for which a provider can invoice for payment. You need a contract before you can get a purchase order before you can even request a reimbursement before that reimbursement is paid out. Keep in mind that DHS knows who their grant recipients are by the summer preceding the start of a fiscal year. That’s 2-3 months that DHS has to prepare contracts and purchase orders.

To establish a baseline, the fiscal year starts on October 1. Let’s say a grant award is for $800,000 for a transitional housing program which houses and supports 16 youth. From October 1 to February 1, there’s about $267,000 in reimbursable costs that this program has to pay for out of their own internal budgets. Some organizations carry this burden at great risk to their organizations, their youth, and their employees, even taking out personal loans in order to make payroll.  

Contract and payment delays are not exclusive to DHS, they are a systemic challenge across District government that have a disproportionately detrimental impact on nonprofit organizations who are often already providing their services at a discounted rate to the District. However, at least one other agency has developed a partial solution which I urge DHS to emulate. The Deputy Mayor for Education’s Out-of-School-Time Office is able to execute contracts by October 1 for OST programs and OST programs are permitted to invoice for up to 50% of their grant award at the start of their annual grant period. In FY24, the OST Office awarded 172 grant awards totaling over $27 million to 150 nonprofits. There are 16 direct DHS-funded youth homelessness programs. This is my invitation for DHS to reach out to the DME’s OST Office to learn best practices. 

In order to comprehensively address youth homelessness, we ask this committee to ask DHS for clarity on the following data points: 

1. The counts of which systems are serving youth. For example, we need a breakdown in the amount of youth served in the youth system from those served in prevention programs, the family system, and the single adult system. At the same time, we need to understand how many youth currently accessing homelessness services were previously in the family system with a parent or family unit and/or wind up in the single adult system as they get older. 
2. Data on outcomes for youth (similar to how this committee asked about tracking outcomes for single adult and family TAH/PSH – page 104 of DHS Oversight Responses) and whether youth outcomes in the single adult and family system differ from outcomes for adults in those systems. 
3. Transparency in the process for how DHS makes funding decisions, whether there is equity in that process, and a subsequent adequacy study to determine whether the current funding process and priorities are meeting the need. 

Thank you for your time and I welcome any questions.