I-Team: Mass. Agencies Costing Taxpayers Millions For Not Paying Bills Promptly
BOSTON (CBS) - We all hate them, but just about everyone knows if you don't stay on top of your bills, it will cost you. But the I-Team has learned that is a concept that some state agencies don't always understand. We found some departments are not paying their bills fast enough and it is costing taxpayers a bundle.
We are talking about the Prompt Payment Discount Program. It is a program in which state agencies negotiate a discount with vendors and in return the state promises to pay the bills promptly. "The concept is similar to what consumers might see, although the opposite, to say if you are not paying your bills on time, you get charged a higher amount," explained Department of Transportation Secretary, Richard Davey.
The I-Team obtained records from every agency in the state and found nearly all have missed out on prompt payment discounts offered by vendors. Over the last two years, $3.8 million dollars was lost, simply because the bills were not paid in time to take advantage of the discount.
As head of the government watchdog group, The Beacon Hill Institute, David Tuerck says this sends the wrong message to taxpayers. "The message is just another example of why the state is happy to take your money, but isn't in a hurry to save it for you," he said.
The I-Team found the Department of Conservation and Recreation, the agency that runs public parks, left more than $280,000 on the table, Health and Human Services missed out on $430,000 in discounts and the Department of Transportation lost $528,000.
We asked all three departments for comment, only MassDOT secretary Richard Davey would talk to us on camera. "We certainly left money on the table," he said. According to Davey, about half of those missed discounts were due to the fact that the snow removal budget is usually underfunded and getting the extra money to pay those contractors takes time. Davey also was quick to point out that his department also saved more than a million dollars last year. MassDOT also has an internal marketing campaign designed to urge the check writers to take advantage of those discounts whenever possible.
All that effort does not impress Tuerck. "The people that are writing the checks for the state don't have any incentive to pay early and take advantage of the program," he said. Davey acknowledged that there are no monetary incentives for employees, but he's trying to find other ways to motivate employees. "We are trying to find incentives, he said. According to Davey, workers who do take advantage are acknowledged for their successes and those who don't are urged to improve.
Still, the message from taxpayers we talked to is pretty simple. "I think they could use that [money] for other important things such as education and repairing roads," one man told us. "It's shameful that they don't pay in time. They need to clean up their act," he added.
Most departments have shown steady improvement since the program started back in 2006. However, the Department of Health and Human Services actually lost more money this year than last year.
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