Prompt Payment
As the third largest county in the United States, Harris County is responsible for providing a multitude of services to its residents. The good and materials required to offer these services are acquired through the Harris County Office of the Purchasing Agent. It is the responsibility of the Harris County Auditor’s Office to review and approve each “claim, bill, and account” against the County before they are presented to the Commissioners Court for approval to release the necessary funds.
Payments made by Harris County to vendors for goods and services must adhere to the Texas Prompt Payment Act. According to the act, any contract executed after August 31, 1987 by a state agency, or political subdivision of the state, is overdue on the 31st day after the later of:
- The day the agency received the goods,
- The day the services were completed by the vendor for the agency, or
- The day the agency received the invoice for goods and services.
Payments begin to accrue interest on the date a payment becomes overdue and stop accruing interest on the date the governmental entity or vendor mails or electronically transmits payment.
Data Review
The Analyst’s Office reviewed 1,224,688 vendor invoices paid by Harris County for fiscal years 2017-2022. Findings of this analysis included:
- Harris County issued payments to vendors on-time for 90.6% of all invoices (1,109,879) and issued delayed payment to vendors for 9.4% of all invoices (114,809).
- For the five full fiscal years reviewed, the County completed the highest percentage of vendor payments on-time at 93.5% in 2017.
*Chart Instructions: To view the raw number of vendor payments completed for each fiscal year by the number of days taken to complete each payment, please hover over each bar.
Action Plan
At the request of the Office of County Administration, an action plan was developed to aid with facilitating improvements. The action plan is divided into three phases to be implemented over a six-month period. The following is a summary of the key proposed actions:
- Develop Training: The County Auditor’s Office should develop a mandatory online training module on statutory requirements for prompt payment to compliment existing training.
- Improve Internal Controls: The County Auditor’s Office should continue developing dashboards to assist County departments with the review of their outstanding invoices for rollout in January 2022.
- Apply Interest: The County Auditor’s Office should commence developing a policy for applying interest to payments determined to be overdue.
- Integrate AIR Data into PeopleSoft/Expand AIR Use: The County Auditor’s Office should undertake integrating AIR data into the PeopleSoft system to aid with improving vendor payment times. The County Auditor’s Office should also continue their rollout of AIR to all County departments, with a target completion date of February 2022.
Since the release of the memo in November 2021, the County Auditor’s office has implemented several of the key proposals in the action plan, including the launch of an online vendor payment dashboard that allows County departments to review their invoices.