The contracts, which would replace long-standing informal agreements, would allow the groups to resume receiving state funds. But the officials said they are still examining whether those contracts will allow the groups to recoup payments frozen by the state since Cuccinelli issued a legal opinion in January indicating that Virginia’s constitution bars funding for charities.
The suspended state payments came at a time when private giving to charities has dipped and demand for services have been rising.
“The prudent Virginian wants us to make sure we do things legally,” said Virginia Health Commissioner Karen Remley. “We’re working feverishly to do that.”
In response to a Freedom of Information Act request, the Virginia Department of Health late Thursday provided a list of 12 groups that were flagged by agency officials and lawyers for the attorney general’s office.
The groups had been slated to receive $12.5 million this year through the two-year state budget approved by the General Assembly in 2010.
The groups include include the Virginia Health Care Foundation, the Virginia Association of Free Clinics, the Alexandria Neighborhood Health Services Inc., the Bedford Hospice House and the Fan Free Clinic for AIDS in Richmond.
Grants for equipment purchases for eight volunteer rescue squads have also been put on hold.
Remley said she is “very optimistic” the constitutional concerns can be resolved for the groups, noting that lawmakers approved the funding and state officials agree the organizations are key to maintaining a basic health safety net for low-income residents.
She said state officials are working to convert informal memoranda of understanding into legal contracts outlining what services they will provide in exchange for their state funding.
“This caused a lot of angst — appropriately so — in the nonprofit community,” Remley said. But, she added, “This is changing one kind of paperwork into another kind of paperwork.”
A spokeswoman for the Department of Social Services said it is likewise looking for ways to release funding to two groups that have been determined to have an unconstitutional relationship with the state — Healthy Families of Virginia and the Child Advocacy Centers of Virginia.
Cuccinelli’s opinion, issued in response to a legal question from a state delegate, narrowly addressed funding for a handful of groups for which Gov. Robert F. McDonnell (R) had sought funding during this year’s legislative session.
Cuccinelli found that the proposed grants violated a provision of the state constitution that prohibits the General Assembly from appropriating funds “to any charitable institution which is not owned or controlled by the Commonwealth.”