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Government > News Hits

Payment nightmares

 

Published 6/23/1999

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A $70 million computer project to improve the city of Detroit’s payment to outside contractors has been a nightmare, leaving some companies and agencies unable to pay their own bills and employees.

Difficulties with the system have resulted in as much as $15 million in unpaid vendor bills, one Archer administration official said Monday. Ironically, the new Detroit Resource Management System is known by the acronym DRMS, commonly pronounced "dreams."

While the city finance department works to correct problems with DRMS, people like Collins Hawkins say they are struggling to keep afloat.

Hawkins, a counselor for Northeast Health Services, has not received a paycheck in three weeks. Northeast provides services to low-income Detroit residents referred by the city for drug prevention and other health-related concerns.

Although there were complications with Northeast’s contract, issued before the April 5 implementation of DRMS, Roger Short, deputy director of finance, said various factors related to the transition may have contributed to the problem.

As much as $10 million to $15 million in unpaid vendor bills have resulted from difficulties with the new system, he said.

Among the factors, Short cites: outstanding payments under the previous Financial Information Control Systems network, which remained unprocessed because they existed prior to DRMS; lack of time to complete thorough training of city employees unfamiliar with the DRMS network; and the effort to increase vendor payment from twice weekly to five times weekly.

The number of local companies affected by DRMS problems is difficult to determine, he added.

"One vendor may have 10 invoices, and another vendor may have 50 invoices," he said.

The city, however, is working to expedite payment, especially to agencies such as Northeast, said the deputy director.

Employees like Hawkins say they are hoping for quick action.

"I’m about to be evicted," said Hawkins. "The week before last, my gas got turned off. I’ve been down to MichCon so often they won’t let me talk to anybody anymore."

Rose Jackson, director of the agency, said she hasn’t seen a payment from the city since December.

Renee Michalik, a spokesperson for Mazzarra Construction which has performed downtown renovation for the city, said she is seeing improvement.

The construction company received its first payment since January last week, and was informed that its next payment has been processed into the system.

Other local businesses and nonprofit organizations have not been as fortunate, but spokespeople declined comment, fearing they might further jeopardize payment.

City Councilman Ken Cockrel Jr. sponsored a prompt payment ordinance which council passed last year, and is expected to take effect this month. Cockrel said he has received about two dozen telephone calls and letters within the last few weeks from vendors who have not been paid by the city.

"You wonder how it is that some of those people can just eat those expenses," he said, adding that some organizations depend on prompt payment to keep their doors open.

"Those are the kinds of people that I’m most concerned about," Cockrel added.

An Auditor General’s report dated Feb. 24, 1999, predicted complications with DRMS, but not necessarily to the extent being seen. The report states in part, "It will take several years to implement the system fully; and that was originally anticipated. ... Minor glitches should not be cause for concern."

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