Finding Text
Condition: There were several large construction contract bills paid after the 35/45 day requirement. Checks were issued and not sent to the vendor in a timely fashion and no interest was remitted. Criteria: Minnesota Statute Section 471.425 requires prompt payment of local government bills. The standard payment period is 35 days from receipt for city councils that meet at least once a month and 45 days from receipts of goods or services or invoice whichever is later, for city councils that do not meet at least once a month. For bills not paid in the established time period the city is to pay interest of 1.5% per month. Cause: The City was experiencing cash flow issues related to timing of payments of a large construction project. Effect: Vendors were not properly reimbursed. Recommendation: Cash flow on major projects should be better managed to allow payments to vendors be made in a timely manner.