SECTION OVERVIEW AND POLICIES

This section explains the process for paying interest pursuant to the Prompt Contract Law once an Agency has determined that interest is owed. To determine if the Agency owes interest, please see Chapter XI, Section 4.A - Not-for-Profit Prompt Contracting of this Guide.

In the event that the Agency does owe interest, the interest rate used in the late contract interest calculation is based on the overpayment rate established by the Commissioner of Taxation and Finance. This rate, however, is subject to change quarterly. Please refer to the Department of Taxation and Finance’s website for the most current interest rate.

Process and Document Preparation:

To process a payment, Agencies must submit a regular voucher, noting the following special instructions:

• Interest Eligible – Online Agencies must select “Not Applicable” from the Late Charge Option on the Late Charge screen. Bulkload Agencies must enter an “N” in the Interest Eligible field.
• Payment Date – Enter the date the interest voucher is prepared.
• Obligation and Accounting Dates - See Chapter XIV, Section 2 – Obligation, Accounting and Budget Dates of this Guide for guidance on proper determination of these dates.
• Payee Amount - Enter the amount of interest due. To calculate how much interest is due, utilize the Late Contract Interest Worksheet.
• Invoice Date - Enter the actual payment date of the late contract payment.
• Description - Enter “Prompt Contract Interest".
• Account Code – The account code for Prompt Contracting interest in the SFS is 58403.
• Liquidation - Leave blank.

For information on processing vouchers for Prompt Payment Interest see Section 5.I - Prompt Payment Interest and Merchandise/Invoice Receive Date of this Chapter for guidance.

Guide to Financial Operations

REV. 04/01/2017