The State - News from Aug. 15, 1986

A computer error caused California’s check-writing system to issue $4 million in interest-payment checks to bondholders who hold a type of bond on which no such payments were due. Deputy state Treasurer Liz Whitney explained that those bonds are of the “zero coupon” type, which are held for a period of years and redeemed with accumulated interest at maturity rather than bearing interest on a monthly or yearly basis. The treasurer’s office learned of the error last Friday, she said, when a recipient inquired about the check’s validity, and stop-payment orders were issued. By Wednesday, all but a few checks totaling $33,000 had been recovered.