Late Payment Interest Penalties
How much money has Illinois spent because it did not pay its bills on time?
|Type||Current FY Amount||Previous FY Amount|
|Current Year Interest||$508.37||$64,744,322.85|
|Future Year Interest||$0.00||$554,803.74|
About Late Payment Interest Penalties
The state is required to pay certain vendors interest costs when bills eligible for late payment interest penalties are not paid on time. Most interest, which is called prompt pay interest, is paid under the State Prompt Payment Act at a rate of 1% per month after 90 days, either from current year or following year appropriations provided to the agencies. Other interest, called timely pay interest, is paid under the Illinois Insurance Code at a rate of 9% per year after 60 days. Three detailed object codes in the state's accounting system pick up these interest costs. To get the total cost of interest paid, add the three totals in the table above.