CT HB05225

State agencies contracting with nonprofit providers for human services must establish incentive programs allowing these organizations to retain excess funds from contracted service costs, effective July 1, 2022.

Nonprofits may retain excess funds if they meet contractual obligations and report to the state agency on how retained funds were reinvested in service quality, deferred maintenance, and asset improvements.

State agencies cannot attempt to recover, offset, or reduce future contract amounts based on retained funds, except when federal funding would be jeopardized.

The Commissioner of Developmental Services may extend these provisions to other non-nonprofit providers meeting the same reporting and contractual requirements.

Section 4-216 regarding personal service agreements is revised to allow nonprofit human services providers to retain savings from contracts without future contracted amounts being reduced solely to reflect previous savings achieved.