Federal Agencies' Bill Paying Performance

In response to a congressional request, GAO discussed its assessment of federal agencies' timeliness in paying the private sector for the more than $200 billion of goods and services the government purchases each year. GAO found that passage of the Prompt Payment Act and its implementation by the Office of Management and Budget (OMB) have substantially improved the government's bill-paying performance. However, agencies continue to fall short of the act's goals because: (1) the number of excessively late payments remains too high; (2) vendors do not routinely receive the interest penalties owed to them when payments are late; and (3) OMB reports to Congress were misleading and masked the need for corrective action. GAO found that closer adherence to prompt-payment objectives will require that: (1) agencies improve their internal controls to ensure that activities which receive goods or services keep consistent records and provide this information to payment centers immediately; (2) payment center officials ascertain that their staffs receive adequate training in prompt-payment provisions; (3) proposed changes to the Federal Acquisition Regulation include the prompt payment provisions; and (4) OMB expand its current reporting requirements to include summary data on all payments occurring after the due date.