The following changes will affect nonprofits that contract with the Montgomery County Department of Health and Human Services. 

1. In the second quarter of FY 2013, DHHS will initiate the process to add County Council approved inflationary adjustments to eligible contracts.

2. Organizations that were awarded an FY 2013 Community Grant of less than $25,999 will receive an Advance Payment Request Form this summer from the DHHS Contracts Management Team (CMT). In September 2012, Nonprofit Montgomery and DHHS will offer training for eligible providers on the new reporting requirements associated with advance payments.

3. DHHS is currently in the process of developing a policy on allowable costs for direct and indirect cost rates. The policy will be released during FY13; however it will not be applied to contracts during the FY 2013 fiscal year.

1. Inflationary Adjustments per County Council Resolution #17-443

In the second quarter of FY 2013, DHHS will initiate the process to add County Council approved inflationary adjustments to eligible contracts. County Council Resolution #17-443, dated May 24, 2012, Item #73 states the following:

"This resolution appropriates $660,940 for inflation adjustments for tax-supported contractors with the Department of Health and Human Services (DHHS). Any inflation adjustment awarded under this paragraph must not exceed 2% of the total contract price. Any contract funded by a non-County grant is not eligible for an inflation adjustment under this paragraph. Each contractor must meet the following eligibility criteria.

a) Non-profit service provider, or

b) Contract that provides meals on wheels, court appointed special advocates, direct mental health services to seniors, and homeless outreach.

c) The increase is to the General Fund value of the contract (Grant Fund value not included).

d) The contract must not be in its first year or have an automatic inflation adjustment built into the contract.

e) This increase does not apply to contracts for Montgomery Cares, Maternity Partnership, or Care for Kids (except for the services associated with the Latino Health Initiative) as their budgets have been adjusted for expected FY 2013 levels of service.

f) This increase does not apply to contracts that are a specific match to a grant.

g) This increase does not apply to contracts covered by the DD Supplement.

h) This increase does not apply to contracts covered by the Residential Treatment Provider Supplement."

2. Advance Payments for Community Grants Less Than $25,999

The Department of Health and Human Services (DHHS) was recently granted authority to make advanced payments for Community Grants totaling up to $25,999. DHHS requested this authority to help alleviate the administrative burden for staff and to support small emerging nonprofit organizations that often have insufficient cash reserves to initiate services and invoice on a cost reimbursement basis.

If your organization was awarded an FY 2013 Community Grant that is less than $25,999, the DHHS Contracts Management Team (CMT) will send you an Advance Payment Request Form. The form:

· Serves as a notice that you are eligible for an advance payment;

· Presents the options to request an advance payment or decline the advance payment; and

· Contains conditions associated with accepting advance payment.

All vendors that are eligible to receive an advance payment are required to complete the form and return it to DHHS CMT. In September 2012, Nonprofit Montgomery and DHHS will offer training for eligible providers on the new reporting requirements associated with advance payments. If you have any questions about the advance payment process in the meantime, please contact your contract monitor.

3. Allowable Cost Policy

DHHS is currently in the process of developing a policy on allowable costs for direct and indirect cost rates. The policy will be released during FY13; however it will not be applied to contracts during the FY 2013 fiscal year. In preparation for the policy's implementation in FY 2014, Nonprofit Montgomery and DHHS will offer training for vendors in February 2013. The policy has been reviewed and commented on by the Nonprofit Advisory Committee. DHHS is currently in the process of reviewing the Committee's comments.