This report provides the results of our review of Compliance with the Prompt Payment Act (Act) by the National Institutes of Health (NIH). The audit objectives were to determine whether NIH pays bills on-time, remits interest penalties when payments are made late, and takes discounts that are advantageous to the Government; accurately reports payments and progress made with respect to complying with the Act; and assesses the reliability of its payment process.
We found that the NIH made late payments for 20 percent of the 657,058 invoices in Fiscal Year (FY) 1994 that were subject to the Act. It incurred interest penalties of $242,221. This occurred because quality controls in the NIH payment process needs to be streamlined.
We recommended that NIH improve quality controls in its payment process to:
We also recommended that NIH routinely assess the reliability of its payment process as required by the Act. The NIH generally agreed with our recommendations.