Comptroller Policy
Liability and Adequate Funding

Each state agency is legally responsible for ensuring that all interest due under the prompt payment law is paid. Should automatic interest fail to be paid to a vendor when interest is legally due for any reason, agencies must take steps to correct the situation as soon as it is identified.

Agencies are responsible for ensuring adequate funding is available to cover the interest payments. A principal payment is not to be made without the related interest payment when interest is due.

Note: When a funding error occurs, an agency must adjust its accounts to cover the principal, interest and any additional interest that accrues until distribution. Depending on the type of funding error encountered and statutory authority, this may entail transferring budget authority from one appropriation into another or moving cash into an appropriation.