Legal Unit

Contracts: % of contract/grant invoices processed timely to meet payment terms

96.8%May 2022

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Partners
  • Department of Finance & Management
  • DVHA Vendors
Story Behind the Curve

This measure is important because DVHA is required by Finance and Management Policy 5.0 to pay vendors on-time and according to generally accepted standard payment terms: Net30 for contracts and Net00 for grants.

This performance measure informs how efficiently the unit is managing the financial aspects of its agreements.  Approximately 21% of DVHA agreements have Net 00 terms rather than the State standard Net 30. The majority of those are grant agreements, requiring more detailed backup support from vendors before payment is fully approved by the State. This has often resulted in invoices initially being rejected or DVHA requiring and waiting for additional information from vendors, thereby delaying the process. Additionally, the VISION system determines payment due date based on the date of the vendor’s invoice. DVHA’s agreements, however, are contractually based on the date the State receives an error-free invoice and complete supporting documentation, not on the date of the invoice. DVHA works to initially review invoices within three business days to promptly identify issues and inform vendors of needed corrections, including invoice dates that match submission dates.  Invoice processing KPIs are used to locate barriers to successful operations and design strategies that will lead to better performance.

During SFY21, the Unit exceeded the 80% payment target by processing timely invoices 93% of the time. The lowest monthly percentage was 86.2% in the month of August 2020, which is a busy month for annual closeout reports. To date in SFY22, the Unit is processing timely invoices at an average rate of 92.4%, still well above the 80% target. In SFY22, the lowest monthly percentage to date was November 2021, where the rate dropped below the 80% target to 78.2% due to staff utilizing time-off during the holiday season and one Unit member being out on medical leave with limited coverage available to process invoices in their absence.

Narrative last updated:  12/15/2021

Scorecard Result Container Indicator Measure Action Actual Value Target Value Tag S R I P PM A m/d/yy m/d/yyyy