1.1 This directive takes effect on October 1, 2009.
1.2 It replaces the following:
2.1 This directive applies to departments as defined in section 2 of the Financial Administration Act.
2.2 Those portions of sections of this directive that provide for the Comptroller General to monitor compliance with this directive within departments and/or request departments take corrective action, do not apply with respect to the Office of the Auditor General, the Office of the privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with this directive within their organizations, as well as for responding to cases of non-compliance in accordance with any Treasury Board instruments that address the management of compliance.
3.1 This directive supports the objectives of the Policy on Internal Control by outlining the duties and responsibilities of chief financial officers when administering all payments (including advance payments and refunds of revenues or receipts), interdepartmental settlements and other charges requisitioned against the Consolidated Revenue Fund. This directive provides requirements to ensure that all payments and other charges requisitioned against the Consolidated Revenue Fund are accurate, timely, properly authorized and legal.
3.2 The requisitioning of payments and the control over the issuance and delivery of cheques requires sound management based on clear accountabilities, strong financial and risk management, rigorous internal controls, the highest standards of ethical conduct and the application of cost-effective and efficient payment methods.
3.3 The Receiver General for Canada, as the principal provider of payment services for departments and agencies, issues payments in numerous currencies using electronic payments and paper-based Receiver General cheques. Electronic payment, which includes direct deposit, is the preferred and standard method for issuing Receiver General payments.
3.4 Departments use the Standard Payment System (SPS) to requisition payments and interdepartmental settlements. Public Works and Government Services Canada (PWGSC) uses the SPS to issue payments on behalf of departments and to process interdepartmental settlements between departments. Payments are requisitioned and processed on a regular or priority basis. Only PWGSC issues regular payments. Both departments and PWGSC may issue priority payments through the SPS.
3.5 If a department has a need to issue priority cheques, it may initiate a request through the PWGSC Banking and Cash Management Sector to set up a priority cheque print site in a departmental office or, when volume is low, have the priority cheques printed at a designated PWGSC site and arrange for pickup of the cheques.
3.6 This directive is issued pursuant to section 7 of the Financial Administration Act.
3.7 This directive is to be read in conjunction with the following:
Definitions to be used in the interpretation of this directive are in the Appendix.
To ensure that all payments, interdepartmental settlements and all other charges requisitioned against the Consolidated Revenue Fund are processed in a timely and accurate manner and are properly authorized and legal.
The chief financial officer (CFO) is responsible for establishing risk-based management practices and controls to ensure effective internal control over the financial management of payment requisitioning and cheque control as follows.
6.1.2 When dealing with payments related to an assignment of Crown debt, ensuring that no further payments are requisitioned until further instruction from the Receiver General and that appropriate procedures are followed. Note that the Receiver General Directive 2009-3, Procedures Respecting the Assignment of Crown Debts and Their Subsequent Payment, section 68 of the Financial Administration Act and the Assignment of Crown Debt Regulations apply.
6.2.1 Ensuring that advance payment clauses are only made under exceptional circumstances when the payments are considered essential to achieving program objectives and when no other reasonable alternative exists;
6.2.2 Ensuring that any advance payment clauses adhere to the principles of Parliamentary control, section 33(3)(a) of the Financial Administration Act, and any other applicable instruments as follows:
6.2.3 Ensuring that advance payments are only made when a procurement contract, or any other contract document for the advance payment exists. Note that section 34(1)(a)(ii) of the Financial Administration Act and Government Contracts Regulations apply;
6.2.4 For each procurement contract, or any other contract, ensuring that when the amount of the advance payment in any given fiscal year exceeds the value of the goods or services expected to be received during that fiscal year or the value of work performed by a recipient during that fiscal year, the excess is recovered immediately;
6.2.5 Ensuring that the amounts and the times of advance payments are approved by the Treasury Board when the approval of the Treasury Board is required for entry into a procurement contract or any other contract. Note that section 8(2) of the Government Contracts Regulations applies.
6.2.6 Ensuring advance payments, if any, for grants, contributions and other transfer payments are provided for in the funding agreement. Note that the Directive on Transfer Payments applies.
6.3.1 Ensuring that suppliers of goods and services are paid on the due date. The standard 30-day payment term is used and starts as soon as an invoice is received or the goods or services are accepted, whichever is later. The 30-day term is not applicable when:
6.3.2 Ensuring that suppliers are notified within 15 days of receipt when it is determined that there is a problem with the goods or services or the invoice. Any portion of the invoice not in dispute is paid within the original 30-day period;
6.3.3 Ensuring that interest is paid on payments made later than the due date as provided for by contract or statute or when awarded in legal proceedings against the Crown;
6.3.4 Scheduling payments and calculating interest when requisitioning payment. The interest rate applicable to Government of Canada overdue supplier accounts can be obtained from the Receiver General (RG) "Payment on Due Date (PODD) Interest Rate" web page. This RG rate is used in the absence of a rate specified by contract, statute, legal proceeding or charged by a regulated public utility;
6.3.5 Ensuring that payments in advance of the due date are only made when discounts are offered and it is more advantageous for the government, after considering the cost of money for the earlier payment and any additional costs incurred to process an early payment.
6.4.1 Settling interdepartmental accounts promptly and accurately using the Standard Payment System (SPS) and adhering to the time limits for processing and questioning an IS. Note that the instructions issued in the Receiver General Manual (RGM) - Chapter 12 "Interdepartmental Settlement (IS) Processing" apply;
6.4.2 Ensuring that IS that are questioned, in dispute, or both, are resolved before the end of the next accounting period, if feasible, or at the earliest possible time before the end of the current fiscal year;
6.4.3 Accounting for the accrual of payables at year-end to other government departments (PAYE-OGD) and equivalent receivables (RAYE-OGD). Note that the Policy on Payables at Year-End (PAYE) and Appendix 6 of the RGM, Chapter 14 - Year End Timetable and Procedures apply;
6.5.1 Ensuring that all refunds of money previously credited to the Consolidated Revenue Fund are made pursuant to the Repayment of Receipts Regulations;
6.5.2 Ensuring that all refunds are verified and certified. Note that sections 34 and 33 of the Financial Administration Act apply;
6.5.3 Processing the refund of a credit card payment as a credit transaction receipt using the same credit card used for the original receipt, not by cash or cheque issue, and processing the refund of a debit card payment as a debit card refund. Section 8.5 of the Federal Government Card Acceptance Departmental User's Guide contains additional details on processing refunds;
6.5.4 Ensuring that a refund is recorded in the fiscal year in which the refund is made considering the following:
6.6.1 Ensuring that all Receiver General (RG) cheques (paper-based payments) are issued using the Standard Payment System (SPS);
6.6.2 Ensuring that RG cheques issued as regular payments in SPS are mailed directly to payees;
6.6.3 Ensuring that payments for supplies and services, including consulting fees and personal service contracts or other similar arrangements, but excluding payments requiring contract release or where a replacement cheque is required, are issued as regular payments mailed directly to payees;
6.6.4 Requesting priority payments, if required, from the RG. Note that the Receiver General Directive 1999-8R1, Printing Priority Receiver General Cheques at Departmental Sites applies;
6.6.5 Ensuring that RG cheques issued as priority payments in SPS are mailed directly by the RG to the payee unless a payment is required on an immediate basis or is printed at a departmental SPS priority cheque print site;
6.6.6 Establishing internal controls over departmental cheque print sites and RG cheques returned to the department for distribution as follows:
6.6.7 Obtaining the prior approval of the minister responsible for the program for payments when, by exception, the cheque will be sent to a Member of Parliament for official presentation to the payee. Such approval is granted for an individual payment or for a category of payments such as transfer payments associated with a specific program. Cheques are sent to the chief financial officer who, in turn, is to send them directly to the Members of Parliament concerned. No cheques are delivered or sent to an officer who has requested the payment or who has participated in some manner in the payment approval process.
Replacement and Duplicate Cheques
6.6.8 Ensuring that replacement and duplicate cheques are issued in accordance with RG instructions and do not result in an additional charge to an appropriation. Note that Receiver General Directive 1999-6R1 applies.
6.7.1 Chief financial officers are responsible for supporting their deputy head by overseeing the implementation and monitoring of this directive in their departments, bringing to the deputy head's attention any significant difficulties, gaps in performance or compliance issues and developing proposals to address them, and reporting significant performance or compliance issues to the Office of the Comptroller General.
6.7.2 The Comptroller General is responsible for monitoring departments' compliance with the requirements of this directive and conducting a review within five to eight years.
7.1 In instances of non-compliance, deputy heads are responsible for taking corrective measures within their organization with those responsible for implementing the requirements of this directive.
7.2 In support of the responsibility of deputy heads to implement the Policy on Internal Control and related instruments, chief financial officers are to ensure corrective actions are taken to address instances of non-compliance with the requirements of this directive. Corrective actions can include requiring additional training, changes to procedures and systems, the suspension or removal of delegated authority, disciplinary action, and other measures as appropriate.
7.3 Individuals are reminded that sections 76 to 81 (Civil Liabilities and Offences) of the Financial Administration Act as well as sections 121 (Frauds against the Government), 122 (Breach of Trust), 322 (Theft) and 380 (Fraud) of the Criminal Code may apply.
This section identifies other significant departments with respect to this directive. In and of itself, it does not confer an authority.
8.1 Public Works and Government Services Canada (PWGSC) is responsible for:
8.2 The Treasury Board Secretariat, Office of the Comptroller General is responsible for development, oversight and maintenance of this directive and for providing interpretation advice.
Please direct enquiries about this directive to your departmental headquarters. For interpretation of this directive, departmental headquarters should contact:
Financial Management Policy Division
Financial Management and Analysis Sector
Office of the Comptroller General
Treasury Board Secretariat
Ottawa, ON K1A 0R5