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New York Taxpayers Foot the Bill for Late Prison Vendor Payments

Paying your bills on time is a basic element of efficient fiscal management. Apparently, however, it is a basic element that the New York Department of Correctional Services (DOCS) failed to master, since the Department’s tardy payments resulted in $58,553 in unnecessary interest on 2,384 late vendor bills.

The problems stemmed from the Arthur Kill Correctional Facility, a state prison on Staten Island. According to an audit by the Office of the New York State Comptroller dated April 23, 2009, Arthur Kill was late on vendor payments 77 percent of the time during the 2005-2006 fiscal year and 34 percent during 2006-2007. Under New York’s prompt payment law, vendors are supposed to be paid within 30 days.

Arthur Kill staff attributed the late payments to staffing issues, lack of available funds, mishandled paperwork and misprioritization of payments. With respect to staffing, for example, Arthur Kill complained that it did not have enough business office employees and that it had trouble hiring new staff because few people were willing to pay $10 a day to commute via a toll bridge, or $6 a day via public transportation.

And while Arthur Kill claimed that it lacked funds, at times, to pay its bills, the audit found otherwise. “We met with DOCS officials in Albany regarding ... where lack of funding was the reason given for payment delays,” the auditors stated. “They could not agree with the assertion by Arthur Kill. Instead, they indicated that facility clerical errors had resulted in holds on funds not being released in a timely manner.”

Mishandled paperwork was attributed to Arthur Kill medical staff who waited too long to return necessary forms to the business office. Finally, Arthur Kill had failed to first pay vendors that charged interest on late payments. New York taxpayers, of course, had to pick up the bill for the interest charges due to the tardy payments.

The audit report made several recommendations to ensure that timely vendor payments were made in the future. Each was accepted by the DOCS, and prison officials have since reported that Arthur Kill is current on its payments. The report is available on PLN’s website.

Sources:, New York State Comptroller Report 2007-S-141

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