INTEREST ON LIQUIDATED CLAIMS - 8473
A liquidated claim is a claim made for an amount that all parties have agreed upon or a claim that can be precisely determined by the operation of law or by the terms and conditions of the agreement made by the parties.
Government Code (GC) section 926.10 provides that claimants are entitled to interest on liquidated claims filed with public entities if the claims are not paid within 60 days. The public entity shall pay interest to the claimant at 6 percent per year. For GC section 926.10 to apply, there must be no disagreement over the claim’s validity, and the claim must be due and payable.
GC section 926.10 does not apply to the following:
- Claims between state agencies/departments.
- Claims of the federal government.
- Claims filed pursuant to construction contracts. For information on construction contract claims, see SAM Section 8473.1.
Agencies/Departments will add interest to claims 60 days after one of the following dates, whichever occurs later:
- The date goods or services are received.
- The date the claim is received by the agency/department.
- The date of completion of an engineering, legal, post-audit, or other review, if required, to determine the validity of questionable claims. A claim is not considered valid until all disputes are settled.
Generally, agencies/departments will pay the liquidated claims and their related interest charges through the claim process. On an exception basis, agencies/departments may avoid late payment interest penalties by making payments through the revolving fund or utilizing the State Controller’s Office (SCO) claim expedite services. When preparing a claim, agencies/departments shall calculate interest based on the payment due date of the claim submitted for payment. Agencies/Departments will show interest paid as follows:
"Interest pursuant to Government Code section 926.10"
$
Interest is payable from the same appropriation from which the claim is paid.