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NYC child care centers still face payment delays after education department pledged quick fix
By
Rebecca Redelmeier
Published Feb 14, 2023
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Michael Appleton/Mayoral Photography Office
By
Rebecca Redelmeier
Published Feb 14, 2023
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Preschools and early child care providers around the city say they are still struggling to pay employees, and in some cases their rent, four months after the Adams administration pledged to expedite reimbursements.
An education department source with knowledge of the backlog said that last week the agency rushed to fill $13 million worth of invoices that had been pending for more than 30 days – many dating back to September. The payments came around the same time Mayor Eric Adams announced he’d formed a new Office of Child Care and Early Childhood Education at City Hall.
On Wednesday, the City Council's education committee will hold a hearing on funding cuts to the city’s popular 3-K program and delayed reimbursements to early childhood providers. The education department has contracts covering roughly 130,000 preschool and early childhood seats across the city. Providers must invoice the city for reimbursement.
“Organizations have missed payroll, some small providers have taken out personal lines of credit in order to pay their staff, and we hear from a lot of organizations that they are really struggling,” said Gregory Brender, the head of policy at the Day Care Council of New York, which represents over 200 early child care providers.
In November, Schools Chancellor David Banks pledged a “rapid response team” would “stabilize” the early child care system. By some estimates, providers were owed as much as $400 million at that time.
As of Monday evening, the education department owed an estimated $1.8 million to providers for 36 invoices that had been pending for 30 days or more, according to a department spokesperson. The department plans to pay those pending invoices this week.
A key problem is that pre-K and 3-K operators can’t submit new invoices until pending ones are paid. That issue, the education department source said, means the city is far behind on millions in payments.
Department spokesman Nathaniel Styer said the process will be changed next month so providers can submit multiple invoices at once.
"The Council continues to hear about how early childhood providers are facing missed payments and contracting issues from the Department of Education, threatening their stability,” said a City Council spokesperson. “It's imperative that DOE quickly resolve these issues to ensure that no further harm is done to our city's child care infrastructure.”
The reforms can’t come soon enough for Sofia Gontcharova, who runs the Butterfly Child Care Center in Brooklyn. She said the city has taken so long to pay she’s applied for a new line of credit and dipped into her personal savings.
A nearly $40,000 invoice she submitted at the end of October is still pending — so she can’t submit new ones for the ensuing months.
“We still have to operate, have to pay payroll, rent, all these expenses,” Gontcharova said. “And if I stop, nobody is going to continue [to work] – people rely on this salary.”
Other invoices were finally paid earlier this month following more than three months of delays. Education department officials said Gontcharova will receive her remaining payments this week — and attributed the delay to “internal accounting.”
Styer, the department spokesperson, said moving forward the city will aim to pay out all its invoices for early childhood education providers within 30 days.
But months of late payments throughout the school year have hurt providers like Sasha Maslouski, who runs the Snapdragon Place preschool in Kensington, Brooklyn.
After joining the city’s 3-K program last summer, Maslouski said she waited months to be reimbursed and had to dip into savings, spending $60,000 of her own money to make rent and payroll until the city started paying her back.
"I’m really frustrated with the whole experience," Maslouski said.
She worries about how businesses like hers will fare if delays continue.
"We’re constantly threatened that it’s going to be over," she said of the city’s 3-K program, which provides free care to 3-year-olds.
Adams and Banks have said that federal stimulus money is running out, prompting them to shift away from plans to expand 3-K.
Early childhood providers said delays in reimbursements have complicated basic operations.
Shauna Francis, who runs Francis Grace Daycare in Queens, said the process of resolving paperwork issues after securing her first 3-K contract last summer dragged on for months.
“We have to buy food, we have to take care of the kids, and we’re just waiting,” Francis said.
She wasn’t able to pay her staff for two months in September and October, she said, and fell behind on rent payments to her landlord. She used her credit card to cover some expenses, and her credit score took a hit, she said.
When asked about Francis' case, a spokesperson said the education department does not recommend providers welcome kids before having contracts approved, adding that the timeline for her agreement was normal.
At the end of last week, the city paid Francis more than $25,000 for a November invoice that had been pending for over three weeks, according to the education department.
The city still owes Francis another $50,000 for invoices the system did not allow her to submit for December and January until the previous invoice was approved, according to Francis and Gothamist’s review of her account with the city.
“We’re still backed up,” Francis said. “Now we’re running low on funds again.”
Jessica Gould contributed reporting.
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Rebecca Redelmeier
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