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Prompt Payment – USAS Instructions
Payments to Other Agencies

The prompt payment law does not authorize or require a state agency to pay interest to another state agency (except for Texas Correctional Industries as noted below):

  • Interest is not paid to payments made to agencies via interagency transaction voucher (ITV).
  • Even if the payment is to be made by ITV, agencies must submit the Payment Due Date to USAS.
  • If an ITV is not used, use the interest control flag R to refuse interest with reason code SA.
  • A state agency must use T-codes 247 and 904 when reimbursing its local funds with treasury funds to prevent interest payments from being made.

See Interagency Payments and Receipts for Goods and Services (APS 014) (FPP A.028) for guidance.

Texas Correctional Industries (TCI), a division of the Texas Department of Criminal Justice, is treated as a vendor under the prompt payment law. When a state agency makes a late payment to TCI, any interest due under the prompt payment law must be included with the payment to TCI for the principal amount.

Payments to TCI from agency funds held in the treasury are still processed through the ITV process in USAS. Agencies must manually compute and pay the amount of interest owed to TCI at the time the principal payment is processed because USAS does not automatically compute and pay interest on an ITV.

Note: Take care to enter payments to TCI correctly to avoid an audit finding.

See also: Dispute Resolution

Sources [+]

Texas Government Code Section 2251.001(10)

Definitions

Payment
Money owed to a vendor.
Prompt payment law
Chapter 2251, Government Code.
State agency
  • A board, commission, department, office or other agency in the executive branch of state government created by the constitution or a statute of this state, including an institution of higher education as defined by Texas Education Code Section 61.003.
  • The Legislature or a legislative agency.
  • The Supreme Court, the Court of Criminal Appeals, a court of appeals, a state judicial agency or the State Bar of Texas.
Vendor
A person who supplies goods or a service to a state agency or another person directed by the agency. The term does not include a state agency, except for Texas Correctional Industries. The term includes an officer or employee of a state agency when acting in a private capacity to supply goods or a service.