STATE OF CONNECTICUT
THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MEMORANDUM NO. 2010-05
January 25, 2010
TO THE HEADS OF ALL STATE AGENCIES
|Attention:||Chief Administrative and Fiscal Officers, Business Managers, Payroll and Personnel Officers|
|Subject:||New Account Codes for Interest, Finance Charges, and Penalties|
I. Authority: Article Four, Section 24, Connecticut State Constitution
II. Purpose: To redefine the account code for Interest Expense and add two new account codes to properly separate the charges currently recorded under Interest Expense.
The Interest Expense account code, 54730, is currently used for several different interest related expenditures. To properly account for the various charges and enable OSC to accurately report those charges, the current account code has been redefined and two new account codes have been established in Core-CT.
As with all account coding, careful consideration should be applied in determining the proper account code to charge. Do not code an expenditure based solely on the vendor's description of the charge.
The account code for Interest on Late Payments differs from the new account code for Finance Charges. Although both charges are based on the amount owed, a period of time, and a percentage, charges recorded under Interest on Late Payments could have been avoided if the original payment was made timely. Alternatively, finance charges are known up-front as part of a purchase or lease agreement and should in fact be encumbered on the purchase order. Account Code 54730 shall be used only for charging the portion of interest paid on late payments to vendors in accordance with Connecticut General Statute 4a-71. Please refer to OSC Memorandum 2005-33 for specific instructions on calculating the interest due.
Contact Mark Aronowitz, Director - Accounts Payable Division at 860-702-3399
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