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Another reason for putting things down in writing, then it doesn't become a "he said, she said" type of incident. These types of things happen all the time. Especially when you are dealing with money coming from a third party (especially government) everything needs to be put down in writing so there is no misunderstanding. These people need to be paid ASAP and if he did pay some out of his own pocket - then I am glad he was showing that he meant what he said.

Get these people paid and learn a lesson from it - GET IT IN WRITING! It will save alot of time later on and gives you a legal leg to stand on.

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