Commerce Business Systems CBS Achieving Excellence in Financial

Commerce Business Systems (CBS) Achieving Excellence in Financial Management NOAA Finance Workshop Presentation Prompt Payment Performance April 29, 2008 NDW Extract of CPCS Daily Download Log Data

Prompt Payment Act; Final Rule Commerce Business Systems (CBS) hppt: //fms. treas. gov/prompt/regulation. html Achieving Excellence in Financial Management ö Requires Ø Federal Agencies to pay interest penalties to vendors subject to the Prompt Payment Act when invoices are not paid on a timely basis Ø Generally an invoice payment is due 30 days after the start of the payment period » The payment period begins on the later of (1. ) The date a proper invoice is received and date stamped or (2. ) The seventh day after the date of delivery or performance of service is completed » If the invoice is not date stamped, the payment period begins on the date the vendor puts on the invoice 2

Prompt Payment Act; Final Rule Commerce Business Systems (CBS) http: //fms. treas. gov/prompt/calculations. html ö Late Interest Penalty Calculation Achieving Excellence in Financial Management Ø Prompt Pay Interest is calculated from the day after payment was due until the day payment is made. The interest rate in effect on the day after the payment due date is used to calculate the interest penalty. Ø The following formula can be used to determine daily interest: P(r/360*d) P is the amount of principal or invoice amount; R equals the Prompt Payment interest rate; and D equals the number of days for which interest is being calculated. For Example: $1, 500 (. 065/360*10) = $2. 71 3

OMB Performance Metrics Interest Penalties ö Commerce Business Systems (CBS) Achieving Excellence in Financial Management OMB Performance Metrics – Prompt Payment Interest Penalties Ø Measures the amount of interest penalties paid on late invoices relative to total dollars paid in accordance with the PPA Ø Number of Invoices Paid on Time » » » Ø Green (fully successful) >=98% Yellow (minimally successful) >=97% -- <98% Red (unsuccessful) <97% Dollar Value of Interest Penalties Paid Relative to Total Dollars Paid Green (fully successful) <=0. 02% Yellow (minimally successful) >0. 02% -- <=0. 03% Red (unsuccessful) >0. 03% Ø NOAA’s Average Performance in FY 2007 » » » Number of Invoices Paid on Time – 97. 7% (Minimally Successful) Interest Paid Relative to Total Dollars Paid --. 03% (minimally successful) Late Payment Interest Penalties NOAA Paid FY 2008 - $207, 944 FY 2007 – $388, 240 FY 2006 – $295, 484 FY 2005 --$369, 934 4

Commerce Business Systems (CBS) Late Payment Interest Reasons Achieving Excellence in Financial Management ö Late Reasons Ø Generally the delay of payments are due to : » Delay in Finance’s receipt of the invoice » Delay in Finance’s receipt of the receiving report » Delay in Finance’s receipt of the PO/Contract Mod » Delay due to invalid ACCS/Funds Availability Ø Specifically the delay of payments are due to: » No mail date stamp on the invoice » Goods being inspected/sitting at the receiving location » Certifier not available (on leave, training class etc. ) » Not able to obtain all signatures from multiple task monitors 5

Commerce Business Systems (CBS) Steps To Improve or Better Manage Achieving Excellence in Financial Management ö For interest penalty greater than $500, Finance is identifying individuals responsible for the delay. » Notification is given on the interest penalty fee » Inquiries are made as to the specific reason for the delay. » Guidance is provided on corrective action required to prevent future late payment penalties. ö Finance has put into place a new report to manage the amount of penalties paid and to highlight potential trouble spots where remedial action is required. 6

New Reports to Help Manage Prompt Pay Interest Penalties Commerce Business Systems (CBS) Achieving Excellence in Financial Management ö Two new reports were added to the NOAA DW in November which will provide you with information on the amount, dollar value, and reason for late interest penalties assessed during a specified period Ø The reports are: » AP 501 D – Prompt Payment Interest Penalty Detail Report by FMC - Provides detailed information by Line Office/FMC for invoices subject to the Prompt Payment act that have been paid late and incurred interest penalties. » AP 502 D - Prompt Payment Interest Penalty Summary Report by FMC - Provides summary information by Line Office/FMC on the number, dollar amount and percentage of invoices paid late during a specified period 7

AP 502 D Prompt Pay Summary Report Sample Commerce Business Systems (CBS) Achieving Excellence in Financial Management ö The Launch Screen – Ø Defaults to Users “Home” Bureau Code Ø Users can select 1 specific Org 1 Code or “ALL” Ø After selecting Org 1 Code users can select 1 specific Org 2 Code for that Org 1 code or “ALL” Org 2 Codes within an Org 1 Ø Users can select a specified “From” or Beginning Date and a specified through or Ending Date 8

AP 502 D Prompt Pay Summary Report Launch Screen Sample Commerce Business Systems (CBS) Achieving Excellence in Financial Management 9

Commerce Business Systems (CBS) AP 502 D Prompt Pay Report Sample Achieving Excellence in Financial Management 10

AP 501 D Prompt Pay Detail Report Sample Commerce Business Systems (CBS) Achieving Excellence in Financial Management ö The Launch Screen – Ø Defaults to Users “Home” Bureau Code Ø Users can select 1 specific Org 1 Code or “ALL” Ø After selecting Org 1 Code users can select 1 specific Org 2 Code for that Org 1 code or “ALL” Org 2 Codes within an Org 1 Ø Users can select a specified “From” or Beginning Date and a specified through or Ending Date 11

AP 501 D Prompt Pay Detail Report Sample Commerce Business Systems (CBS) Achieving Excellence in Financial Management 12

Commerce Business Systems (CBS) AP 501 D Prompt Pay Report Sample Achieving Excellence in Financial Management 13