Summary of differences between old policy instruments and new directives

The following changes have been made to several of the financial management policy instruments:

• Training requirements are more explicit.

  Example: Directive on Departmental Bank Accounts

  6.1 The chief financial officer is responsible for ensuring the following:

  6.1.3 Ensuring all persons signing DBA cheques have the delegated formal authority and are trained on the responsibilities and procedures of operating DBAs.  Note that section 33 of the Financial Administration Act applies.

• There is more clarity with respect to the requirement for the chief financial officer (CFO) to ensure risk-based management practices and controls are in place.

  Example:  Directive on Losses of Money or Property

  6.1 The chief financial officer is responsible for establishing of risk-based management practices and controls to ensure losses of public money and property are effectively managed.

• Duplication is reduced where requirements already exist in other policy instruments, regulations or legislation.

  Example:  Directive on Financial Management of Pay Administration.  In Appendix B, entitled “Delegation of financial authorities to human resources personnel - Elements of a control framework” in the old Comptrollership Policy on Pay Administration was deleted from the new Directive on Financial Management of Pay Administration since requirements are already covered in other directives, namely, the Directive on Delegation of Financial Authorities for Disbursements, the Directive on Account Verification and the Directive on Payment Requisitioning and Cheque Control.

• Related policy instruments are consolidated under a single directive.

  Example:  Directive on Receipt, Deposit and Recording of Money.  This directive replaces the following four related policy instruments:  Policy on Recording Receipts of Money, Policy on Deposits, Policy on Banking Compensation, and Policy on Recording of Refunds of Expenditures and Repayments of Advances.

• Non-mandatory guidelines in old policy instruments are removed from new directives and established in new guidelines, as required.

  Example:  Directive on Claims and Ex Gratia Payments.  The “Appendix D “Guidelines” was removed from the old Policy on Claims and Ex Gratia Payments and incorporated into a separate Guideline on Claims and Ex Gratia Payments.

In addition to the common differences noted above, there are key differences for each financial management policy instrument, which are summarized as follows:

1.      Account verification

• clarification of a financial officer’s responsibility for section 33 of the FAA; and
• requirements related to the assignment of Crown debts were transferred to the Directive on Payment Requisitioning and Cheque Control.

2.      Accountable advances

• clarification of the CFO’s responsibilities for instituting specific controls such as reconciliations and separation of duties.

3.      Acquisition cards

• responsibilities of individuals (e.g., CFO, card coordinator, responsibility centre manager, and cardholder) are clarified; and
• clarification of the use of acquisition cards issued in the name of an organizational asset.

4.      Claims and ex-gratia

• non-mandatory guidelines in the old policy instrument were excluded from the new directive and established in new guidelines, as required.

5.      Contingencies

• clarification of the CFO’s responsibility for establishing controls to ensure that program managers are informed of their responsibilities and that appropriate records are kept for audit purposes; and
• provision that program managers are to seek a legal opinion before reporting a contingent liability for pending litigation cases, and that corrective measures are to be put in place in a prompt and efficient manner to remedy deficiencies in the identification, assessment of probability, valuation and reporting of contingencies.

6.      Delegation of financial authorities for disbursements

• requirements related to delegation of section 32 of the FAA were transferred to the Directive on Expenditure Initiation and Commitment Control;
• requirements for contracting delegations were removed; and
• new directive was aligned with the recommendations of the Horizontal Internal Audit on Delegation of Financial Authorities in Large Departments and Agencies from the Office of the Comptroller General’s (OCG) Internal Audit Sector.

7.      Departmental bank accounts (DBA)

• clarification that the authority to establish a DBA rests with Public Works and Government Services Canada and that DBAs should be avoided, if possible because they are costly to maintain; and
• removal of duplicate information, i.e., information already present in other policy instruments, regulations and Receiver General (RG) directives.

8.      Expenditure initiation and commitment control

• clarification about the systems, procedures, and controls of commitments such as how to record them; sustaining documentation of hard commitments; over-commitment and monitoring and reporting of unencumbered balances of budget allotments; and appropriations; and
• stipulation that expenditure initiation authority, commitment authority, and transaction authority are to be delegated in writing and are to be authorized by the appropriate authority.

9.      Financial management of pay administration

• operational details were excluded from the new directive and incorporated into its complementary guideline; and
• removal of duplicate requirements concerning delegation.

10.  Loans and loan guarantees

• Stipulation that when the authorizing legislation does not detail terms and conditions for loans, the Minister of Finance is now is required to recommend approval of those terms and conditions to the Governor in Council; and
• Requirement that management practices and controls are to be instituted by the CFO, including preparation and presentation of periodic reports to management, periodic review of loans and loan portfolios, and the inclusion of specific clauses in loan and loan guarantee agreements.

11.  Losses of money or property

• Clarification of procedures for calculating the value of a loss; and
• Clarification of the Public Accounts of Canada reporting requirements.

12.  Payment requisitioning and cheque control

• six related policy instruments were streamlined and consolidated into one; and
• additional clarification of requirements for advance payments, interdepartmental settlements, and control of RG cheques.

13.  Receipt, deposit and recording of money

• seven related policy instruments were streamlined and consolidated into one;
• clarification of requirements for managing bonds, standby letters of credit, and other financial security instruments; and
• clarification about managing security deposits and financial security instruments.

14.  Receivables management

• removal of the requirement to includes receivables management practices in planning and to undertake a risk assessment of the receivables portfolio.

15.  Recording financial transactions in the Accounts of Canada

• a six-element classification structure replaces the four-element classification with the addition of a financial reporting account level code and transaction type (internal/external) codes; and
• CFO responsibilities include integrating the departmental chart of accounts to be integrated into the departmental financial system.  The CFO’s responsibilities also include ensuring that the departmental chart of accounts allows for financial reporting according to the department’s Management, Resources and Results Structures (including at the program activity level)and central agency requirements.

16.  Specified purpose accounts

• clarification of the distinction between specified purpose accounts (SPA) that record special purpose money, and those that do not;
• clarification of the requirement that departments are not to reimburse their appropriation from SPAs;
• clarification of the requirement for charging GST/HST to an SPA in a cost-sharing arrangement;
• identification of appropriate authorities for the RG when establishing new SPAs; and
• emphasis given to properly classifying SPAs in Public Accounts and to consulting the OCG.

17.  Travel cards and travellers cheques

• responsibilities of individuals (e.g., CFO, card coordinator, responsibility centre manager, cardholder) are clarified; and
• clarification of specific travel card coordinator responsibilities associated with authorizing changes to limits and issuing, re-issuing and cancelling travel cards.

18.  Use of the Consolidated Revenue Fund for Crown corporations

• clarification that of the CFO’s responsibility for ensuring that when the Government provides financing to a Crown corporation through a loan, investment. or advance, the financing is authorized by legislation; and
• explanation that requirements are directed to the CFOs of departments providing funding to Crown corporations and not to the CFOs or equivalents of the Crown corporations.