New Orleans officials: Fix in the works for contractor payment problems
3rd September 2024 · 0 Comments
By Katie Jane Fernelius
Contributing Writer
(VeriteNews.org) — Weeks after the release of a critical state report highlighting the city of New Orleans’ chronic delays paying its contractors, city officials on Tuesday (Aug. 27) said they have a plan to fix the problem.
In a presentation before the City Council’s Economic Development Committee, top officials in Mayor LaToya Cantrell’s administration said they plan to automate and streamline tedious tasks, improve policies and procedures and retool how they train staff and vendors to use its payment system.
“Many of these recommendations are going to be vital for the success of both our infrastructure side and operational side,” Chief Administrative Officer Gilbert Montaño said. “There are a lot of historical reasons why the contract process has been so challenging. But long story short, there are about a thousand different approvals you have to get that maybe you wouldn’t have to get in other cities for historical reasons of oversight and protection. We’re trying to streamline those through technology.”
The meeting follows the Aug. 7 publication of a report by the Louisiana Legislative Auditor, finding that the city cannot accurately determine how long it takes to pay vendors, despite its obligation to pay vendors within a 30-day timeframe. It also identified delays in contracting and purchase orders, preventing contractors from submitting invoices. That report concluded that the city’s use of its current system for vendor payments – known as Budget, Requisition, and Accounting Services System or BRASS, for short – does not capture the full invoicing process, making it difficult to track the timeliness of payments as well as audit the log of invoices.
In recent years, the city has come under fire for failing to pay vendors in a timely fashion, leading to hundreds of outstanding invoices and millions of dollars in unresolved payments. When the city faced scrutiny after failing to pay youth workers with the recreation department, the City Council took decisive action, passing a “NET 30” ordinance, requiring the Department of Finance to provide monthly reports detailing all of the city’s outstanding vendor invoices and explaining reasons for late payment. This led to regular hearings at City Council meetings, requiring each department to walk through its delayed invoices. The council asked the state to conduct an investigation and offer recommendations.
The Legislative Auditor’s report recommended strengthening policies and procedures for BRASS and ensuring that city staff and vendors were trained in using the system appropriately.
According to city Director of Finance Romy Schofield-Samuel, New Orleans has been slow to take up BRASS due to many obstacles beyond its control, from the 2019 cyberattack to the Covid-19 pandemic to Hurricane Ida.
“It was an interruption in the full knowledge and education of the BRASS system,” Schofield-Samuel said. “But we’ve since been able to get buy-in from departments.”
At the Aug. 27 meeting, Schofield-Samuel provided her department’s action plan in response to the report.
One particular area of improvement is how city staffers handle invoices with inaccurate or incomplete information. The Legislative Auditor’s Office found that city staff were deleting these invoices, which meant that they would no longer be logged by BRASS. The city is now working to get staff to cancel or reject faulty invoices instead so that the city can develop more accurate reports in BRASS on the timeliness of invoices and identify what issues are regularly coming up in processing.
According to Freda Richardson-Taylor, the deputy director of finance for the city, deletion was also used to close out old invoices at the end of the year that had not yet been paid.
“We deleted them for the time period to close that year,” Richardson-Taylor said. “Never at a time did we use a deletion function to not make sure that we didn’t pay our liabilities.”
Officials also said they are working to streamline and automate parts of the process for routing contracts, such as tax clearances and legal approvals.
“Currently, the contract routing process touches legal about six times,” Richardson-Taylor said. “So, we are working works with legal to help shorten up that process for contract approval.”
Finance department officials also referenced other technologies and systems that they could use to help with vendor payment. This includes programs like Procore, which lets the city’s architects and engineers review and revise construction invoices before forwarding them to BRASS, as well as DocuSign, which facilitates digital signatures on documents.
The city also says it plans to better communicate with city departments and vendors by sending automatic emails through BRASS, as well as personalized emails from city staff in the accounts payable and finance departments.
As city officials work on implementing the report’s recommendations, the coming months will prove whether the city can meaningfully improve its timeliness and reliability in paying vendors.
“We’ve had some issues where people working for the city want advances because they’ve heard of issues getting contracts paid on time,” Councilmember Lesli Harris said Tuesday. “I appreciate your work and appearing before us to talk through the invoices. I think that’s a real positive and something that we can use in a public forum to convince vendors, old and new, that they will get paid and in a timely fashion.”
Council President Helena Moreno, who has led the process to audit and reform vendor payments, also expressed optimism that the city’s stated plan will help address their persistent issues with paying vendors.
“Hopefully, with this report and the administration’s commitment to reforms, we can get payments under control,” Moreno told Verite News. “This will go a long way to finally get work done for the people of New Orleans and to consistently pay the city’s vendors what we owe them.”
This article originally published in the September 2, 2024 print edition of The Louisiana Weekly newspaper.
