Compliance with the Prompt Payment Act by the Division of Fiscal Services

EXECUTIVE SUMMARY:

This report provides the results of our review of compliance with the Prompt Payment Act by the Division of Fiscal Services (DFS) within the Financial Management Service of the Program Support Center. The report contains recommendations to improve compliance with the Prompt Payment Act by assuring that goods and services paid for are received, discounts that are advantageous to the government are taken, and payments made under the Act are accurately reported.

We recommended that DFS:

• use the existing payment system to identify all instances where goods and services have been reported as paid for, but not received to (1) assess and correct problems with the payment system and (2) obtain reimbursement from the payee in instances where goods and services were found to have not been received;

• modify the payment system to require that discount data be recorded in the payment system before payments can be processed;

• use actual results that are available when compiling Prompt Payment Status reports and, before submitting the reports to OMB, verify that the reports reflect all of the DFS and IHS field offices; and

• provide written policies and procedures to all reporting entities for performing quality assurance reviews. Reviewers should be instructed to: (1) examine receiving reports or other original documentation when verifying whether goods and services have actually been received and (2) assess the payment system to assure the system accurately identifies whether goods and services paid for have been received.

In responding to our draft report, the DFS generally agreed with all our recommendations.

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