SPRINGFIELD -- At a time when Illinois has a $13 billion budget deficit, state government continues to send out interest checks to vendors for as little as 3 cents.

SPRINGFIELD -- At a time when Illinois has a $13 billion budget deficit, state government continues to send out interest checks to vendors for as little as 3 cents.

The miniscule payments are a result of a 2009 change in the state’s prompt-payment law.

Until then, the state had to pay 1 percent interest on each bill it owed that was more than 60 days overdue, and vendors had to ask for their interest payments in writing if they were owed less than $50 in interest. The law was changed to require automatic payment of all interest.

State Rep. Robert Pritchard, R-Hinckley, said he introduced House Bill 6849 during the past legislative session to fix the problem, but the legislation got bottled up in the House Rules Committee.

“When I saw the impact is when the comptroller gave us a list of vendors owed money for each district office, so we could approve them,” Pritchard said.

“I refused because there wasn’t one over $3.”

Pritchard’s bill would have changed the law to require regular interest payments only for amounts of $50 or more, allow vendors to request payment when they are owed between $5 and $50, and for rules to be drafted by the comptroller and the Department of Central Management Services to deal with interest payments under $5.

Steve Brown, a spokesman for House Speaker Michael Madigan, said Friday he believes the problem was never fixed because of concerns about the cost of reprogramming the comptroller's computers. The legislature might take another look at the problem in the future, he said.

"I don't think anyone wanted to spit out those miniscule checks," Brown said.

Carol Knowles, a spokeswoman for Comptroller Dan Hynes, said state agencies submit the vouchers to the comptroller’s office, which then pays them.

“The legislature made the change because they argued if you’re due interest and state is paying late, you should receive interest — it should be automatic. They hadn’t predicted the kind of situations that have arisen,” Knowles said.

The comptroller’s computer system prevents the interest checks from being combined into larger amounts, Knowles said, so the state is spending between 33 cents and 44 cents to send out checks that are sometimes for amounts less than the cost of the postage.

“It’s a ridiculous thing to be cutting a check for that little amount,” Pritchard said. “It’s a combination of bad policy with computer software that is antiquated.”

The comptroller does not have an estimate as to the total cost of sending out each check, although Knowles said much of the process is done electronically, not by workers.

“It would be very difficult to put a number on that to accurately reflect it,” she said.

But Knowles said vendors can cut down on the waste by signing their companies up to have interest payments done by direct deposit.

“Everybody can sign up for electronic funds transfer. They just need to contact our office. A number of vendors have done that,” she said.

“We don’t like it (sending the checks for small amounts), either. At this point, there’s not a lot we’re able to do about it. We’ve been trying to correct the problem through changes in the law.”

 

Chris Wetterich can be reached at 788-1523.

 

How small are the checks?

One Springfield vendor has received checks for amounts as small as 3 cents, 5 cents, 18 cents, 80 cents, 77 cents and $8.73.

 

Get your money electronically

Vendors who want to start receiving their interest checks electronically can call the comptroller’s office at 782-6000.