Presenter Robin Herring October 2006

1. NIH ACQUISITION MANAGEMENT COMMITTEE SYMPOSIUM OFM – Commercial Accounts Branch Presenter Robin Herring October 2006 Jaime Otero-Zuazo

2. Welcome! • INVOICE PAYMENT PROCESS        • FOREIGN CURRENCY PAYMENTS • INTEREST PAYMENTS • FUTURE INITIATIVES • QUESTIONS AND ANSWERS • Wrap Up

3. Invoice Payment Process • Foreign Currency Payments • Interest Payments • Future Initiatives • Questions & Answers • Wrap Up

4. Invoice Payment Process • The Office of Financial Management (OFM) is the designated billing office (DBO) for the NIH unless a contract states otherwise. All payments, contracts included, that are not paid through the Payment Management System (PMS) are processed by this office. • To ensure prompt payment, the OFM requires fourteen (14) calendar days to process the invoice for payment. Therefore, the time between the date of the receipt of invoice from the contractor by the contracting officer and the date the approved invoice is received in the DBO shall not exceed sixteen (16) calendar days (see NIH Policy Manual, Chapter 6332-9).

5. Invoice Payment Process Manual Payment Process The invoice is received in the mailroom of the Commercial Accounts Branch (CA) from the IC Contracts Operations Branch (COB). The invoice is date stamped and distributed to the Contracts Section of CA.  Invoices are then sorted and given to the assigned technician for processing. The invoice is reviewed to ensure compliance with the rules and regulations governing the bill payment process. The Prompt Payment; Final Rule requires that the Government make timely payments to vendors, but that such payments not be made earlier than seven (7) days prior to the due date. For most payments this due date is 30 days after receipt of a proper payment request or the acceptance of goods or services, whichever is later. For fixed price and final invoices, the due date is 30 days after the Contracting Officer’s approval of a proper payment request.  

6. Invoice Payment Process The type of schedule and payment (Check or Electronic Funds Transfer (EFT)) depends upon the availability of the vendor’s banking information. The Debit Collection Improvement Acts states that any entity doing business with the Federal Government must be paid by Electronic Funds Transfer unless there are documented circumstances that prevents this, and then a waiver must be requested from the agency. Payments are prepared for processing on a payment schedule. This payment schedule is submitted to the U.S. Treasury via the Secure Payment System (SPS). Payments are not disbursed from the NIH. Accounting information is then entered into the accounting system.  The data will appear in Data Warehouse the following day if there are no errors.

7. Invoice Payment Process • A Certifying Officer reviews the payment schedule for accuracy and the payment is electronically submitted to Treasury.  Treasury has 48 hours from the date payment is received to issue payment. 

8. Invoice Payment Process RCM/ADB Payments: -        For those ICs that do not use the RCM/ADB, a technician will enter payment information directly from the hardcopy of the approved invoice provided by the IC. The invoice is then approved by approving official. A technician will access the payment request screen daily for invoices entered in the RCM/ADB for payment. -        A “payable date” is entered based on the “invoice received date” shown on the screen.  The invoice received date is the date invoice was received in the individual IC. The payable date is 30 days from the invoice received date, unless fixed price or final invoice. The payable date would then be 30 days from contract officer approval date. - Invoices are then scheduled, certified by Certifying Officer and sent to Treasury for disbursement. . ADB System

9. Invoice Payment Process • Foreign Currency Payments • Interest Payments • Future Initiatives • Questions & Answers • Wrap Up

10. Foreign Currency Payments An invoice requesting payment in foreign currency is scheduled on an SF1166, “Voucher and Schedule of Payment: and sent to the Kansas City Financial Center (KFC) for processing. The KFC will process the payment once it verifies that the certifying officer on the SF1166 matches a signature provided on file. An individual SF1166 may contain either wire payments or check payments. If a payee requests a wire payment instead of a check, the SF1166 should be annotated to indicate a “WIRE PAYMENT” is requested, along with supplying the required data to accomplish the wire payment.

11. Wire Payment Agencies should use the SF1166 to supply the KFC with the following information to initiate a wire or check payment: Payment information is entered into SPS and printed out. S.W.I.F.T Code (optional, provide only if available) Payee Name Bank Identifier Number Bank Name Bank Address Bank Account Number Currency Type Amount Invoice Information  

12. Check Payment Payee Name Payee Address Currency Type Bank Name Amount Invoice Information

13. Foreign Currency Payments - The U.S. Department of the Treasury will do the conversion of foreign currency to U.S. dollar amounts. The State Department U.S. Disbursing Office will mail “foreign payment detail report” to address listed on SF1166. The detailed information includes check number, foreign currency amount, U.S. dollar amount, and payment issue date.

14. Invoice Payment Process • Foreign Currency Payments • Interest Payments • Future Initiatives • Questions & Answers • Wrap Up

15. Interest Payments Interest begins the day after payment due date until payment is made and continues until the funds are either deposited electronically or the anticipated date a check will be received by the contractor. If payment is 30 days late or less, simple daily interest is calculated. If payment is over 30 days late, monthly compounding interest is calculated. Agencies shall pay any late payment interest from the funds available for the administration of the program for which the penalty occurred.  The Prompt Payment; Final Rule does not authorize the appropriation of additional funds to pay interest.  

16. Interest Payments Interest will be calculated and will accrue daily at the interest rate applicable on the day after the due date through the payment date. When interest is owed and not paid, interest will accrue on the unpaid principal until paid, up to 1 year. Late payment interest shall be paid without regard to whether the contractor has requested payments of such interest, and shall be accompanied by a notice stating the amount of the interest penalty, the number of days late and the rate used.  Agencies should pay interest together with the underlying principal payment. Interest of less than one dollar need not be paid.

17. Interest Payments • Interest payments are not due when payment is delayed because of a disagreement between a Federal agency and a contractor over the amount of the payment or other issues concerning compliance with the terms of a contract. • In addition to late payment interest, a contractor shall be entitled to additional interest penalties if they: • (1) receive a payment after the payment due date which does not include the interest penalty also due. • (2) are not paid the interest within 10 days after the date on which the initial payment is made. • (3) make a written request, no later than 40 days after the payment date, that the agency pay such additional penalties.      • The additional penalty shall be equal to 100 percent of the original late payment interest but must not exceed $5,000 nor be less than $25.

18. Invoice Payment Process • Foreign Currency Payments • Interest Payments • Future Initiatives • Questions & Answers • Wrap Up

19. FUTURE INITIATIVES The Commercial Accounts Office is in the process of developing yet another means for Contractors to access bill payment information. In the near future, Contractors whose invoices are paid through the Research Contracts Modulewill be able to access their payment information using the Commercial Accounts Bill Payment Website. This website is currently being utilized by vendors on Purchase Orders, Records of Calls, Training Nominations, and other Simplified Acquisition Procurements.

20. Invoice Payment Process • Foreign Currency Payments • Interest Payments • Future Initiatives • Questions & Answers • Wrap Up

21. Suggested references and websites: www.fms.treas.gov/fm www.acquisition.gov/far/index www.fms.treas.gov/kfc www.arnet.gov/far www1.od.nih.gov/oma/manualchapter/contracts/633s-9/main.html • OMB Circular A-125, Prompt Pay • FAR 32.9, Contract Financing, Prompt Pay •  HHSAR 332-9, Prompt Pay