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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Prompt Payment – USAS Instructions
Interest Control Flag and Reason Code

Note: Users must have proper security to enter a value in this field. Contact your agency security coordinator (Comptroller user ID required) for more information.

Agencies must determine if any payments subject to the prompt payment law should be excepted from the payment of interest. The three-character transaction-level Interest Control (IC) Indicator allows agencies to treat a specific payment differently from the USAS defaults and edits. The interest control indicator may be used only in strict accordance with the prompt payment law and Comptroller’s Statewide Procurement Division (SPD) rules.

Example
If the USAS default shows a payment is subject to the prompt payment law but SPD advises the agency that it is not, then the agency must submit use the interest control indicator to direct USAS not to compute or pay interest for that transaction.

The first character of the IC indicator is the flag that designates how automated late payment interest should be calculated.

The second two characters of the IC indicator are the reason code. Agencies must submit one of the Interest Control Reason Codes whenever an interest control flag is submitted.

Example
Agencies must use an interest control flag of F on all travel payments that are directly payable to vendors, including those payable to credit card companies, along with the reason code DT.

Agencies are solely responsible for ensuring the interest control indicator is properly set. This field should only be used after sufficient analysis of each payment’s classification with respect to the prompt payment law.

Note: Usage of interest control indicator is subject to a post-payment audit at any time.

If there are no special circumstances, leave the interest control indicator blank for USAS to populate. See IC indicator for valid values.

Documentation Requirements [+]

  1. Agencies must keep adequate written documentation to support using the interest control indicator to override USAS edits.
    Example
    If an agency does not receive a correct invoice for a particular good or service that will result in an exception to the prompt payment law, then the agency must document in writing that a correct invoice was not received from the vendor.
  2. When an agency uses an interest control indicator to specify that late payment interest is not applicable for the transaction, the agency must keep specific documentation in its files that can be associated with the voucher.

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.
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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