Prompt Payment Act
Frequently Asked Questions

Account and Payment Questions

To which account will the interest be charged?
The default account for interest charges is the account used to pay the principal. Federal grant accounts will generally require an alternative source of funds for interest charges.

What if the account has insufficient funds to cover the interest payment?
An interest payment will be allowed to post even if it creates an overdraft on the account. If there are not enough funds to cover the principal payment, the document will not process.

How will interest be calculated?
If a payment is subject to interest, it will be calculated as follows:

• State Funds:
  

  The Comptroller's Office will calculate interest charges based upon the Payment Due Date submitted by the agency. Programs will be developed to add the transaction(s) to the related State Fund Voucher and send an automated e-mail message to the creator of the document to notify that person of the interest expense charge.

• Local Funds:
  

  At final approval, the document will decide if the payment due date is EARLIER than the next available check run. If so, interest will be automatically calculated and a transaction(s) added to the document. One interest transaction per applicable line item will be generated. An automated mail message will be sent to the document creator to advise that interest charges were paid on that document.

How will we find out when interest has been paid with a late payment?
Automated e-mail notification will be sent to creators of documents that have interest charges.

How will payments be scheduled?
Payments will be scheduled as close to the Payment Due Date as possible, and the usual check run will be made each Thursday. Payments that will be late if they are not paid before the following Thursday will be scheduled as necessary for payment to be made by the Payment Due Date. To schedule a payment AFTER the Payment Due Date, wait until then to process the document.