Department of Health and Human Services

Office of Inspector General -- AUDIT

"Compliance with the Prompt Payment Act by the Food and Drug Administration," (A-15-96-40002)

May 5, 1997

Complete Text of Report is available in PDF format (3.1 mb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This report provides the results of our review of compliance by the Food and Drug Administration (FDA) with the Prompt Payment Act (Act). The audit objectives were to determine whether FDA meets Office of Management and Budget (OMB) Circular A-l 25, "Prompt Payment" requirements for having an adequate payment process to pay bills on-time, accurately reporting payments and progress made with respect to complying with the Act, and assessing its payment process.

We found that FDA's payment process does not meet OMB's performance standard for paying bills on time, and reports of payments and progress made with respect to complying with the Act are inaccurate. The FDA does not assess the process used for making most payments and processes at the headquarter's office that are assessed are not comprehensive.

The report contains recommendations for improving FDA's process of making payments, of reporting on progress and problems, and of assessing the reliability of its payment process. The FDA concurred with most of our recommendations when commenting on the draft report. We believe that full implementation of our recommendations would materially improve the credibility of FDA's assertions that it is in compliance with the Act.