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Months of 'glitches' delay payments to Rutgers' vendors

A major upgrade to Rutgers’ financial systems has led to long delays for payments to some vendors, leading the university to create an emergency payment system.

Payments from Rutgers University to vendors, including restaurants, merchandise providers, and guest speakers, were delayed this fall as the university merges and upgrades financial systems.

The university has spent about a year working on the switch to a new system, Cornerstone, that updates the various systems used for finances, including paying employees and vendors, said Pete McDonough, Rutgers' head of external affairs.

Rutgers employees, including faculty, have had no problems being paid. But beginning in October, reports began popping up of severe problems with the switchover for third-party procurement services: restaurants not paid for catering, guest speakers not being reimbursed, even utilities disconnected after bills went unpaid.

Rutgers created an emergency payment process to rush certain invoices.

"We are aware that vendor payments and expense reimbursements are not being paid in a timely and consistent manner since we launched the new systems in October," read a Dec. 12 email blast to employees from University Procurement Services. "We understand the challenges this has created for you, and our suppliers and partners."

The university is closed this week; the head of Rutgers' finances was unavailable for comment.

McDonough said the problems with the Cornerstone switch had been largely resolved and the work remaining is to clear out the backlog of invoices built up over several months.

Rutgers receives several thousand invoices a month, McDonough said, paying out more than $700 million every year to tens of thousands of vendors.

"When you convert a system like that, there's going to be some glitches," he said.

Several Rutgers employees expressed frustration with the delays, though they said they recognized the scale of the system change. They said they had seen improvement in recent weeks.

One vendor in Camden said he contacted the university early on to ask about a delayed payment. Since then, he said, he had no problems. The vendor declined to be named, saying he feared hurting his business with the university.

Small vendors — "for whom cash flow is an issue" — are the reason Rutgers created the emergency system, McDonough said.

McDonough said the Cornerstone upgrade is one of the last pieces of Rutgers' integration with the former University of Medicine and Dentistry of New Jersey. Rutgers in 2013 acquired the bulk of UMDNJ, including New Jersey Medical School, Robert Wood Johnson Medical School, New Jersey Dental School, School of Nursing, School of Public Health, and Cancer Institute of New Jersey.

"The problem has been, up to this point we have had to run two entirely parallel systems from two universities that are now one very different university," he said.

All invoices eventually will be processed, McDonough said. He did not have a timeline for when the backlog would be clear and could not say whether the transition would be more costly than expected.

"If the process slows down, which is to be expected in a transition like this, you're going to build up a big backlog," he said. "And so people have been working overtime and created these backup systems to expedite things, and that backlog is being brought down to the point where it will be fully caught up in the not-too-distant future."