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* UPDATED x1 - Turns out, we do know * $600 million in bills we don’t know about

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*** UPDATE *** From the comptroller’s office…

According to CMS there is $613 million in loans from the Vendor Assistance Program. Of that $613 million, Blue Cross has $316 million, Health Alliance has $219 million and Coventry Health has $9.9 million for a total of $544.9 million. These numbers are already included in the backlog in with the $3.3 billion that we have for Group Insurance at CMS so it would be double counting to add them to the backlog again. If you need any more info let me know.

[ *** End Of Update *** ]

* Sarah Mueller discovered that the comptroller’s tabulation of backlogged state bills doesn’t include money owed via a vendor assistance program…

Documents obtained by Illinois Public Radio show that since November, the state owes businesses in the Vendor Support Initiative program more than $600 million. That doesn’t include the 1 percent interest fee applied per month to bills over 90 days old under the Prompt Payment Act.

The program allows companies to buy invoices of others who have done business with the state, and are awaiting payment. The companies pay the bills, then make a profit by collecting both the overdue money and the interest on it when the state eventually pays up. […]

A spokesman for the state agency that administers the program says the comptroller won’t have the voucher information until the bill is presented for payment. It’s unclear what vendors are being paid through this program and which have not been approved.

The governor’s office said the state is not a party to those transactions, it’s strictly between the vendor and qualified purchaser. But it said it is aware of who is participating.

posted by Rich Miller
Thursday, May 19, 16 @ 9:35 am

Comments

Could this be the tip of the iceberg?

There has to be boat-loads of un-vouchered services/goods that the Governor’s agencies have not been allowed to pen.

VoucherGate. /s

Comment by cdog Thursday, May 19, 16 @ 9:39 am
Follow the money!! Look at who owns the companies buying the vouchers.

Comment by Thinking Thursday, May 19, 16 @ 9:48 am
cdog you are spot on. It is probably another 9 digit number.

Comment by Original Rambler Thursday, May 19, 16 @ 9:50 am
=== Look at who owns the companies buying the vouchers. ===

You mean like Jim Edgar?

Comment by Rich Miller Thursday, May 19, 16 @ 9:52 am
“program allows COMPANIES to buy invoices…”
Do tell.

“The governor’s office said the state is not a party..”

Oh. The state is not, but who is? …..

Comment by cdog Thursday, May 19, 16 @ 9:57 am
no appropriation, no invoice. what happens when FY 16 comes and goes with no budget?

Comment by Bob Hicks Thursday, May 19, 16 @ 9:58 am
Edgar!??! That’s profound.

Sounds like we need another excellent “deep dig” from our world-class investigative Illinois journalists! Charge!!!

(sans INN. /s)

Comment by cdog Thursday, May 19, 16 @ 10:00 am
here is the States position on the VAP that started in 2010.

Company - A Citibank financed Trust & Partner of the State of Illinois’ Vendor Payment Program
• About The Company
• A Higher Purpose
• Contact Us
About The Company
Headquartered in Chicago, Illinois, The Vendor Assistance Program, LLC (VAP) purchases eligible Accounts Receivable from vendors of the State of Illinois for 100% of the underlying invoice value.
VAP was founded in 2010 in partnership with the State of Illinois to address the State’s delayed payment cycle. VAP operates under the guidelines of the State of Illinois Vendor Payment Program and is working to expand to other states.
By registering with VAP, state government vendors access timely payments with fair terms. By providing certainty and transparency in payment cycles, vendors can finance operations, better manage cash flow, and recognize revenues earlier, allowing vendors to expand their businesses, create jobs, and provide more goods and services to state governments.

Comment by Allen D Thursday, May 19, 16 @ 10:00 am
https://www.vendorassistance.com/Program/Illinois/Home/Company

Comment by Allen D Thursday, May 19, 16 @ 10:01 am
The Vendor Payment Program now carries the following disclaimer: “In light of the lack of a Fiscal Year 2016 budget, the Vendor Payment Program is only available on a limited basis. Invoices that are authorized for payment may be considered for program participation. For example, invoices for commodities or services covered by a consent decree or court order may be eligible for the program.”

Nice but a lot of vendors were already paid before this policy was put in place.

Also find it fascinating that the Governor’s Office can say that the State is not a party to these transactions. State agencies were issued invoices for goods & services delivered based on terms that the agency agreed to in a contract. This shift of risk onto vendors is going to result in increased costs to the State for years to come as vendors reassess the likelihood of “prompt” payment.

Comment by Out Here In The Middle Thursday, May 19, 16 @ 10:02 am
I am not saying there isn’t anything strange under the stairs here… but quite a few vendors have been turned down as well, $250,000.00 owed vendors because they have too many small invoices, the program wants large invoices not thousands of small invoices.

Comment by Allen D Thursday, May 19, 16 @ 10:04 am
- Out Here In The Middle - Thursday, May 19, 16 @ 10:02 am:

In many cases there is no contract, infact most of our purchases are not by contract here… only a handful of vendors are contract for us.

Comment by Allen D Thursday, May 19, 16 @ 10:06 am
According to my Dentist, ‘those companies’ are offering him 90% of what the State owes him. So they profit a lot more than from just the interest owed.

Comment by Triple fat Thursday, May 19, 16 @ 10:06 am
Triple Fat:

You get 90% now and the other 10% when the payment is made to the company that purchased the receivable. The purchaser gets the prompt pay interest.

Comment by Demoralized Thursday, May 19, 16 @ 10:12 am
I like that the vendor assistance program exists, it gets people/agencies paid that need money right away and transfers the lengthy receivables from people/agencies that can’t wait over to entities that can wait (and are happy to earn the interest). However it seems like a little more record keeping is warranted here.

Comment by The Captain Thursday, May 19, 16 @ 10:15 am
For the Vendor Assistance company to get paid the interest, the invoice needs to be submitted to the Comptroller. So whether it is an invoice to a provider, or is part of this Vendor Assistance (loan shark?? ) program, the Comptroller should have an accurate list of outstanding invoices no matter who is the payee.

Comment by Politically Incorrect Thursday, May 19, 16 @ 11:11 am
= the Comptroller should have an accurate list of outstanding invoices no matter who is the payee =

Not if CMS vouchers the payment as being for the service provider but then has the check mailed to the “loan shark.”

Comment by Dirty Red Thursday, May 19, 16 @ 11:22 am
Something wounds off here. Is the article saying the $600 mil isn’t included in the debt picture?

If Company has an unpaid bill/voucher, it should show in the debt picture. It shouldn’t matter if Company assigned it to some entity in the VAP.

Is the article saying that these relate to bills/vouchers that haven’t been submitted? That would be silly, because they aren’t late in being paid if they haven’t been submitted (and interest wouldn’t be accruing on them then).

Comment by titan Thursday, May 19, 16 @ 11:26 am
To be clear- the Vendor Assistance Program discussed in several comments above and the Vendor Services Initiative are not the same thing, amirite?

Someone correct me if I’m wrong. Thanks.

Comment by Arthur Andersen Thursday, May 19, 16 @ 11:35 am
Here’s the way I describe it. The comptroller usually sees the bill through the front end. In VSI, she doesn’t see until it’s presented on the back end, if that makes sense.

Comment by Sarah Mueller Thursday, May 19, 16 @ 11:41 am
AA:

You are correct.

Comment by Demoralized Thursday, May 19, 16 @ 11:46 am
AA-Vendor assistance program is one of the five companies that purchase receivables. Vendor support initiative, is the program run by the state that these companies operate under.

Comment by Joey Thursday, May 19, 16 @ 11:52 am
Thanks, gents.

Comment by Arthur Andersen Thursday, May 19, 16 @ 12:14 pm
no,
This is not correct.
#1 The vendor assist program was suspended July 1st 2016.
Because NO vouchers get be vouched with out a budget.
2. The program worked like this:
90% when the invoice date by the vouching entity, not the vendors date reached 90 days. Next 90% paid then, 7% paid once the State paid the invoice, this could be years when it goes to court of claims beyond the old date of must be paid by 8/31 of the fiscal year the state went into, followed by the balance of 3% to the vendor, after they state pays the 3rd party the interest.
SO CMS, IFA and a couple other execs enabled a work around that SOME vendors could sell SOME receive bales even though there was NO actual voucher mid January of 2016.
AND the State brought in 4 total partners to play. This is now, NO ONE knows what is what or will happen to the program once this year ends.
SO in the mean time, myself and around 4000 other vendors like my firm have NOT been paid in just about a year. OR ONLY partially paid. Which makes it almost impossible to operate. Or pay our property taxes, or my employees, or any of the other trickle down effects of a simple thing called transacting does. It moves economies,
Which if we recall pays our state employee pensions and insurance as well as our own.
WE ARE STARVING FOR A BUDGET. It is not just the needy people, but well over 4000 additional vendors of the state are owed probably in the 3-4 billion or so range. Our business’s are closing. As we simply can not carry the state, nor pay our vendors, while our credit dnb’s and suppliers cut us off for late, or no payments, for not meeting the terms we signed when we bought the products & or services.
AT lest 3 4 billion is my guess

Comment by sharkette Thursday, May 19, 16 @ 1:07 pm
The problem with vendor assist program, as one of the very first bus partners of the state to sign up for it is as follows:
1. dating, the date needs to be MY invoice date. Not the date the entity enters the bill.
2. the next date, I should be able to sell my receivable in 30, not 90 days. this is normal any where else this type of program is used,
3 the state needs to make the interest payment sooner than later.
4 the comptroller needs to execute the funds based on local vs out of state entities 1st, vs the order in which received.
5 the entire bid process should be re done to require x percent goes to local entities 1st.
6 the budget needs to include cuts every where,

3-4Billion,, is my guess, not 34b,, that was a type0 above1,, trigger fingers here!!

Comment by sharkette Thursday, May 19, 16 @ 1:13 pm
“the Comptroller should have an accurate list of outstanding invoices no matter who is the payee”

This comment ASSUMES that a voucher has been prepared by the Governor’s agency/agencies.

We know that many contracted services/goods have not been appropriated for FY2016.

We know that a non-appropriated item cannot be vouchered. (by definition)

We know that without a voucher presented to the Comptroller, the account payable to the vendor, DOES NOT EXIST at the Comptroller’s Office.

(When the agency vouchers a payable, AND sends it to the comptroller, it goes to the back of the line, just like the legislator’s recent paychecks.)

Comment by cdog Thursday, May 19, 16 @ 2:12 pm
Do the companies which are buying the accounts receivable know that a lot of this has not been appropriated? Hope so.

To the update.

What is out there which is not in the VSI and is not vouchered due to Administration orders?

Anything where a contract was signed, a good provided, a service performed, that has not been appropriated, isn’t under court order, isnt in VSI.

#VoucherGate

Comment by cdog Thursday, May 19, 16 @ 2:15 pm
==the date needs to be MY invoice date. Not the date the entity enters the bill.==

So, you date your invoice April 1 but I don’t get it until April 10 and you want me to use your invoice date? I don’t think so. An invoice isn’t valid until an agency determines the invoice is proper and the services have been received. Once that verification occurs the agency recognizes the invoice.

== the next date, I should be able to sell my receivable in 30, not 90 days==

Nobody is going to buy it. The reason they are buying it is for the interest. Interest doesn’t start accruing until after 90 days.

Comment by Demoralized Thursday, May 19, 16 @ 2:19 pm
Actually the $613 million only gets you to November. so how much more in December, January, February ….. And they mention 3 vendors….what about the other 80? How do the phone companies get $10 million, but other utilities get zip…Does BigBrain “awareness” including who they are stonewallin’

Comment by Annonin' Thursday, May 19, 16 @ 3:02 pm
==sharkette - Thursday, May 19, 16 @ 1:07 pm:

no,
This is not correct.
#1 The vendor assist program was suspended July 1st 2016.==

Sharkette, the year should be 2015. Right?

Comment by Mama Thursday, May 19, 16 @ 3:51 pm
I bet the number is far higher.

Expect more of these surprises and wait to you get the unfunded pension totals.

When the interest rise this stuff really spike

Comment by cannon649 Thursday, May 19, 16 @ 8:36 pm