Contractor Payment Process Improvements — original pdf

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CITY OF AUSTIN PUBLIC WORKS Contractor Payment Process Improvement MBE/WBE Advisory Committee April 6, 2021 Agenda Contractual Requirements Finance Team Overview Our Journey for Improvement Deep Dive Into Processes Collaboration Continuous Improvement Where We Are Today Questions City of Austin | Public Works Department 1 Construction Contract Payment Provisions Article 14 of the General Conditions: Contractor can submit no more frequently than once per month Information Contractor to Submit: • Payment Application • Materials on Hand • • Updated Schedule • Updated Redline As-Builts Subcontractor Report City of Austin | Public Works Department 2 Construction Contract Payment Process How the Process Works: 1. Contractor submits a draft payment application for verification by Inspector 2. Contractor/Inspector agree on quantities and Materials on Hand (MOH) 3. 4. Contractor packages the following: Inspector verifies Contractor updated redline as-builts a) Cover Sheet b) MOH c) Deductions d) Contract Time Statement e) M/WBE Sub-K Schedule f) Inspector reviews/signs Inspection Supervisor reviews/signs 5. 6. 7. PM reviews/signs 8. PM submits to PWD Accounts Payable City of Austin | Public Works Department 3 Team Overview PWD Accounts Payable consists of two teams working together to ensure payments are processed timely for payment to vendors within 30 calendar days of a properly submitted invoice. PWD is responsible for processing payments for capital improvement projects for most City departments and three PWD operation funds. Project Accounting (PA) • • Audit of consultant coversheet and Intake of professional service invoices • invoice – rates, sequential payments, etc. Liaison for Project Manager approvals, payment issue resolution, and AP team. • Document areas for continuous improvement Intake of construction pay applications Payment processing in financial system Accounts Payable (AP) • • • Assist vendors with payment inquires • Liaison between PWD and Central Accounts Payable (CAP) • Document stale dated invoices and areas for continuous improvement City of Austin | Public Works Department 4 Our Journey for Improvement Oct 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 Dec. 3 May 2019 Jun 2019 •Reviewed current processes starting with mail intake through AP and PA procedures •Collaborated with CAP to intake electronic invoices and changed methodology for assignment processing in PWD •Created resource accounts •Review of internal PWD finance processing reduce review timing and created a metric between teams •Established and escalation process to PWD management •Collaborated with PWD project management teams to reduce processing times •Coordinated with CCO and sponsor departments •Worked with CCO to make contract review more accessible •Established a process for stale invoices •Deep dive for vendor delinquent accounts •Resolved most delinquent accounts •First positive AP turnaround time report •Continue process improvements •Started Filemaker application project •Created internal controls City of Austin | Public Works Department 5 Deep Dive Into Processes Project Accounting Accounts Payable • Supervisor assignment of invoices from • Supervisor assignment of invoices from resource account resource account • Assignment within 24-hours of receipt • Assignment within 24-hours of receipt • Metrics tracked for processing by team • Metrics tracked for processing by team • Reviewed and sent for approval same day • Reviewed and sent to CAP for payment within • Processes for follow-up to project managers for approvals and escalations if necessary • No more than 10-days for review before escalation • Collaboration with Capital Contracting Office reduced audit review time of contract rates 24-hours (most times same day) • Internal controls developed for processing • Supervisor tracks time for processing • Coordination between teams for documentation of stale invoices and follow-up by supervisors • Coordinated with PWD Purchasing team on review and approval of invoices • Manager over both teams reviews stale invoices and collaborates with stakeholders for root problems and solutions City of Austin | Public Works Department 6 Collaboration As we looked at our processes, we were intentional about discussing with our stakeholders how our changes might impact their processes both internal and external to the City. • Met with CCO to get feedback and how we could streamline • together Reached out to other departments AP teams to get an understanding of their processes and implemented some into our procedures • Worked with project managers throughout the City to ensure they understanding of changes we were making, why they were needed, and up-to-date forms for prompt pay invoices Partnered with CCO to give short presentations about our processes at contract kickoff meetings. • City of Austin | Public Works Department 7 Continuous Improvement All PWD Finance teams work collaboratively to review processes for improvements. Anytime we identify an area to improve, there is a check with internal teams and stakeholders before a change is made. Internally, PWD is continuing to: Expand our Filemaker Application to allow for workflow of an invoice from receipt to check cut; • Develop metrics to track time at each process point; and • Develop dashboards for reporting PWD Finance is looking to collaborate with all stakeholders in the future on: Electronic signatures for approvals Providing reports to help with continuous improvements • • • City of Austin | Public Works Department 8 Where We Are Today In fiscal year 2020, we averaged 17 days turnaround time across all operating funds and for departments that use our capital project services. We process an average of 2,000 invoices a month and successfully sustained an overall turnaround time below the 30-day state law statute for the past 18 months. Below is a snapshot of the dashboard reported at our monthly PW Stat meetings: City of Austin | Public Works Department 9 CITY OF AUSTIN PUBLIC WORKS DEPARTMENT QUESTIONS Eric Bailey, PE Assistant Director Public Works Department Eric.Bailey@austintexas.gov