(Revised: 03/1991)

In order to encourage governments to act rapidly on claims filed with them, Government Code Section 926.10 provides that claimants shall be paid interest on liquidated claims filed with public entities which have not been paid within 60 days. Interest shall be at six percent per year.

The code section does not apply to claims filed as follows:

  1. Claims of a State agency or fund against another State agency or fund.
  2. Claims of the Federal Government.
  3. Claims filed pursuant to construction contracts. (Please refer to SAM Section 8473.1)

A liquidated claim is a claim which can be determined with exactness from the parties’ agreement or by arithmetical process or application of definite rules of law. For Government Code Section 926.10 to apply there must be no disagreement over the validity of the claim and the claim must be due and payable.

Agencies will add interest to claims 60 days after one of the following dates, whichever occurs later:

  1. The date goods or services are received.
  2. The date the claim is received by the agency.
  3. 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 filed until all disputes are settled.

Liquidated claims and their related interest charges generally will be paid through the claim schedule process. However, if the amount of the claim is $1,000 or more, agencies may pay the claim by use of a revolving fund check. If the claim is $10,000 or more and a revolving fund check is not prepared, an expedite claim schedule will be used. When preparing claim schedules, an additional five days of interest will be added for a regular claim schedule and two days of interest for an expedite claim schedule to compensate for the State Controller's processing time. Interest paid will be shown on the Remittance Advice as follows:

"Interest pursuant to Government Code Section 926.10"


Interest is payable from the same appropriation from which the claim is paid.

In determining the amount of interest due, the table on 8473 Illustration may be used. The figures shown in the table are the decimal equivalent of interest from the beginning of the year to the dates shown in the columns. For example, interest from the first of the year to July 24 would be the decimal equivalent of 3.370 percent or .03370. Since all interest does not begin to run from the first of the year, interest from the beginning of the year the date interest begins must be subtracted from the date shown in the table. For example, if the date interest begins is March 4 and the date payment is made is June 12, the amount shown in the table for March 4 (.01036) must be subtracted from the amount shown at June 12 (.02679) to arrive at the proper interest factor of .01643 for the period. The amount of the claim is multiplied by this interest factor to determine the interest due.

If interest runs past December, the interest from the date interest begins to the end of the year is calculated. Then, interest from the beginning of the year to the date interest ceases is added to that. In leap years, one additional day of interest must be calculated when interest periods span February 29. This may be accomplished by adding an additional day to the interest period. See SAM Sections 8474.1 and 8474.4, if applicable.


8473 Illustration (Disclaimer: This illustration is currently unavailable. For access, please contact the SAM Unit at


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