BOP Program Statement 2011.09 § 13

will be used by the Comptroller/Controller of the location

reviewed and by the Chief, Finance Branch, Central Office, to

assess performance and determine problem areas and required

corrective action. The results of the QC Reviews also will be

used to complete the Annual Prompt Payment Report (Attachment D).

— The RIC will provide, to the Comptroller/Controller of the

location reviewed, copies of every Attachment A, so

performance can be assessed and corrective action taken.

Annual Reporting. Each Comptroller or the Chief, Finance

Branch, as appropriate, will analyze the information reported on

Attachment A.

Regional Comptrollers must certify that the time period used in

the selection criteria, by each location, in determining the

payment universe and sample size, was appropriate.

The regional office staff will consolidate the information for

payment sites in the region and prepare the Annual Prompt Payment

Report (Attachment D).

— This report must be completed and forwarded to the

Chief, Finance Branch, no later than the first work day

in January of each year.

A narrative report will be completed by each Comptroller or RIC

for each regional office, COBO, MSTC, and AOS review and

forwarded to the Chief, Finance Branch, no later than the first

work day in January of each year.

PS 2011.09

4/23/2003

Page 8

This report must include such information as:

Ë sample size reviewed,

Ë problems/errors detected,

Ë efforts warranting recognition,

Ë corrective action required, and

Ë specific plans of action.

The Chief, Finance Branch, will report the results of the QC

Reviews to the Senior Deputy Assistant Director, Administration

Division, and the Assistant Director for Administration.

The Comptrollers may consider requiring the RICs of payment

sites in their respective regions to complete Attachment D for

each review conducted to assist in meeting the January due date

for the Annual Prompt Payment Report.

/s/

Harley G. Lappin

Director

PS 2011.09

4/23/2003

Attachment A, Page 1

PROMPT PAYMENT ACT COMPLIANCE REVIEW WORKSHEET

Location: Period Ended:

Interest Rate for Period / / - / / : %

Interest Rate for Period / / - / / : %

Current Value to Funds Rate (CVFR) for Period / / - / / : %

Current Value to Funds Rate (CVFR) for Period / / - / / : %

A. INVOICE

Sample Size: Pymnt. Pymnt. Pymnt. Pymnt. Total (if

no. no. no. no. applicable)

1. Vendor Name

2. Invoice Number

3. Invoice Amount

4. Date Goods Received

5. Date of Invoice

6. Date Invoice Received

7. Date Payment Period Began (Note 1)

Calculated by the reviewer

8. Payment Due Date (Note 2) Calculated

by the reviewer

9. Date Payment Made (Note 3)

10. Payment Made Late (Y/N)

11. No. Days Paid Late

12. No. Days Paid Early, except where

discount taken

13. If Paid > 7 Days Early, Authorization

Given (Y/N) (Note 4)

B. INTEREST

Total (if

applicable)

1. Interest Rate (Note 5)

2. Amount of Interest Due (Note 6) (Show

calculation)

3. Amount of Interest Paid

4. Additional Penalty Due (Y/N)

5. Amount of Additional Penalty (Note 7)

(Show calculation)

6. Amount of Additional Penalty Paid

7. Reason Interest or Additional Penalty

Incurred (See Reason Codes)

8. Reason Interest or Additional Penalty

Not Paid (See Reason Codes)

9. Interest Penalty Charged to Sub-Object

4301 (Y/N)

PS 2011.09

4/23/2003

Attachment A, Page 2

C. DISCOUNT

Sample Size: Pymnt.

no.

Pymnt.

no.

Pymnt.

no.

Pymnt.

no.

Total (if

applicable)

1. Discount Terms

2. Discount Period

3. Amount of Discount (Note 8)

4. Amount of Discount Taken

5. Reason Discount Not Taken (See Reason

Codes)

NOTES:

Note 1: Upon receipt of proper invoice or goods, whichever is later. If invoice is not annotated by

the Office of Financial Management with the date received, the date placed on the invoice by the vendor

shall be used.

Note 2: Unless contract or PO provides for different payment terms: Meat and meat food products and

fresh/frozen fish: not later than 7 days after date of delivery, perishable agricultural commodities:

not later than 10 days after date of delivery, dairy products: not later than 10 days after the receipt

of a proper invoice, all other purchases: 30 days after the start of the payment period

Note 3: Payment date listed on the voucher.

Note 4: If payment was made more than 7 days early due to routine FMIS system calculation of payment

release date, the payment will be considered administratively authorized for early payment.

Note 5: Use rate applicable on day after due date

Note 6: Interest Penalty Formula:

Invoice Amount X # of days X Interest Rate = Interest

overdue 360 Payable

Note 7: This is equal to 100% of the original late payment interest penalty. The vendor must request

this penalty within 40 days after the date payment is made.

Note 8: Use the formula below to calculate whether the discount should be taken or refer to the current

Operations Memorandum on the Treasury Borrowing Rate (CVFR):

Discount % X Days in Year = Effective

100% - Discount % # Days in Payment Annual

Period - # Days Left Discount

in Discount Period Rate

REASON CODES:

Reason Interest or Additional Penalty Incurred:

(1) Delay in paying office's receipt of:

(a) Receiving Report

(b) Proper Invoice

(c) P.O. or Contract

(2) Delay or error in paying office in:

(a) Taking discount

(b) Notifying vendor of defective invoice

(c) Computer or other system processing

Reason Interest or Additional Penalty Not Paid:

(1) Payment less than $1.00

(2) Other. Attach explanation to your calculation of the interest or additional penalty that should

have been paid.

Reason Discount Not Taken:

(1) Invoice received after discount period ended

(2) Invoice received before discount period ended but not in time to process payment timely

(3) Not economically justified

(4) Other. Attach a list of other reasons, in order of importance.

PS 2011.09

4/23/2003

Attachment B, Page 1

The sample size for the first Prompt Payment Act Compliance

Quality Control Review (QC Review) of each payment site will be

determined using the table below:

SAMPLE SIZES FOR ESTIMATING PROPORTIONS AT 90%

CONFIDENCE, ± 5% PRECISION, POPULATION SIZE 300-3,000

p=0.85

N n

300 95

400 103

500 108

600 112

700 115

800 118

900 120

1,000 121

1,100 122

1,200 124

1,300 125

1,400 125

1,500 126

1,600 127

1,700 127

1,800 128

1,900 128

2,000 129

2,100 129

2,200 130

2,300 130

2,400 130

2,500 131

2,600 131

2,700 131

2,800 131

2,900 131

3,000 132

p = estimated compliance rate (% of on-time payments) from

first review

N = number of payments made during the 12-month period

n = sample size

PS 2011.09

4/23/2003

Attachment C, Page 1

SAMPLE SIZES FOR ESTIMATING PROPORTIONS AT 90%

CONFIDENCE, ± 5% PRECISION

n¹ = Nt²pq

Nd² + t²pq

Where:

n = sample size

N = number of payments made during the 12-month period

t = 1.64 standard deviations for 90% confidence level

p = rate of compliance (percentage of on-time payments)

from previous 12-month's QC Review

q = 1 - p

d = ± 5%, desired precision of the estimate of p

For example, a QC review is being conducted on the Federal

Correctional Institution, "Somewhere". During the previous QC

review, it was determined the institution paid 90% of its

invoices on time. The institution paid 1,000 vouchers in the

latest fiscal year (12-months). The above formula shall be used

to calculate the sample size, at 90% confidence, ± 5% precision,

as follows:

n = (1000)(1.64)²(.90)(.10)

(1000)(.05)²+ (1.64)²(.90)(.10)

= 242.064

2.742064

= 88.28 or 89

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¹ The values for n are always rounded up to the next whole

number. For example, if the calculated n = 170.26, the number

sampled should be 171 since exactly 170.26 units cannot be

selected, and it is preferable to have a sample slightly larger

than required, rather than smaller than required.

PS 2011.09

4/23/2003

Attachment D, Page 1

LOCATION:

ANNUAL PROMPT PAYMENT REPORT

Fiscal Year Ending September 30,

I. Invoices paid subject to the Prompt Payment Act and

5 CFR 1315:

A. Dollar value of invoices $

B. Number

II. Invoices paid late:¹

A. Dollar value $

B. Number (sum of II.C.2 and II.F.1.b)

C. Late payment interest penalties paid:

1. Dollar amount $

2. Number

3. Relative Frequency (II.C.2/I.B) %

D. Additional penalties paid for failure to pay interest

penalties:

1. Dollar amount $

2. Number

3. Relative Frequency (II.D.2/I.B.) %

E. Reasons why interest or other late payment penalties

were incurred. Rank from highest to lowest, according

to frequency of occurrence.

1. Delay in paying office's receipt of:

a. Receiving Report

b. Proper invoice

c. Purchase order or contract

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¹ For contracts awarded prior to April 1, 1989, include

payments after grace period. For subsequently awarded contracts,

include payments after due date.

PS 2011.09

4/23/2003

Attachment D, Page 2

2. Delay or error in paying office in:

a. Taking discount

b. Notifying vendor of defective

invoice

c. Computer or other system

processing

F. Interest and other late payment penalties which were

due but not paid:

1. Total:

a. Interest dollars (sum II.F.2.a

and II.F.3.a) $

b. Number (sum II.F.2.b and

II.F.3.b)

2. Because payments less than $1.00:

a. Interest dollars $

b. Number

3. For other reason:

a. Interest dollars $

b. Number

c. Specify reasons:

III. Invoices paid 8 days or more before due date, except where

cash discounts taken:

A. Subject to a determination under sections 1315.4(j) or

1315.5 of 5 CFR 1315 (where authorization was given to

pay invoice early):

1. Dollar amount $

2. Number

3. Relative frequency (III.A.2./I.B.) %

PS 2011.09

4/23/2003

Attachment D, Page 3

B. Not subject to a determination under section 1315.4

(where no authorization was given for early payment):

1. Dollar amount $

2. Number

3. Relative frequency (III.B.2/I.B.) %

IV. Certification:

I certify the data reported on this form is as accurate as

possible.

Comptroller/Controller Date