Rescinded [2009-10-01] - Policy on Payment Requisitioning and Payment on Due Date
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1. Effective date
The present document contains the entire text of the policy as revised July 15, 1996. The policy cancels TB Circular 19961.
2. Policy objective
To ensure that all payments and all other charges requisitioned against the Consolidated Revenue Fund are timely, properly authorized and legal.
3. Policy statement
It is government policy to pay on the due date, according to contract or statute, amounts that represent a legitimate obligation, including interest on late payments, and that meet the requirements of section 33 of the FAA.
This policy applies to all organizations considered to be departments within the meaning of section 2 of the Financial Administration Act (FAA), and to Crown corporations required to use the CRF.
5. Policy requirements
- All requisitions for payment or settlement must be certified, either in writing or electronically, by an officer authorized by the minister responsible pursuant to section 33(1) of the FAA.
- Payment authority must not be exercised before the requisition has been duly certified either in writing or electronically, pursuant to section 34 of the FAA, by a person properly authorized to do so. The payment officer must have adequate assurance that the section 34 certification has been provided.
- A person must not exercise payment authority or spending authority for a transaction from which he or she can benefit personally.
- No person shall exercise signing authority pursuant to both sections 33 and 34 of the FAA with respect to a particular payment.
- Suppliers of goods and services must be paid on the due date, in accordance with the contract, as specified by a standard payment term, 30 days from receipt of an invoice or acceptance of the goods or service, whichever is later.
- The standard 30day payment policy to suppliers is not applicable:
- when, with the approval of the Treasury Board, the terms of payment under a contract are different from the 30day standard, as is the case for instance for certain construction contracts that currently have a 45day payment period and the contract with the Canadian Corps of Commissionaires which calls for immediate payment;
- when regulatory agencies approve fee schedules and payment terms such as utility bills that must be paid by a specific day each month;
- to interdepartmental accounts;
- to payments to employees, such as travel claim reimbursements, which should be paid as soon as possible;
- to rental payments for real property, which are to be paid in accordance with the terms of the lease or rental agreement, but not earlier; and
- when it is more costeffective to make a single payment for a number of invoices under $2,500 that are due within the same week. The invoices may be paid in a single payment on the earliest due date of the combined invoices.
- Interest shall be 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. With respect to regulated public utilities, departments are subject, in the absence of a contract specifically excluding the payment of interest, to any interest charges or latepayment penalties the rateregulator has approved.
- Payments may be made in advance of the due date only when discounts are offered and it is more advantageous for the government, after considering the cost of borrowing money for the earlier payment and any additional costs incurred to process an early payment, to pay in advance of the due date.
- Interdepartmental accounts must be settled immediately using the Interdepartmental Settlement System after confirming that the goods or services have already been received or other conditions have been met (e.g. reimbursement of salaries).
- Departments must provide the Receiver General with the means to authenticate transactions requiring authorization under section 33 of the FAA and with the data required to issue the payment on the due date.
- The Receiver General must recognize Crown debt assignment or power of attorney before any payments can be made to the assignee.
- (l) Once the Receiver General has acknowledged the assignment of a Crown debt, all future payments against the debt must be made to the assignee.
6. Procedural requirements
- The certification wording, pursuant to section 33 of the FAA, is prescribed by the Treasury Board in subsection 7(1)
of the Payment Requisitioning Regulations and varies depending on whether single or recurring payments or settlements
are involved and must be adhered to:
- for a single payment or settlement:
"Requisitioned for payment/settlement pursuant to section 33 of the Financial Administration Act and certified in accordance with section 7 of the Payment Requisitioning Regulations".
- for a recurring payment or settlement:
"Requisitioned pursuant to section 33 of the Financial Administration Act for recurring payment or settlement until advised otherwise or the requisition is superseded and certified in accordance with section 7 of the Payment Requisitioning Regulations".
- for a single payment or settlement:
- If a department determines that there is a problem with the goods or services or the invoice, it must notify the supplier within 15 days of receipt. The 30day payment period begins upon receipt of the replacement goods or services or the revised invoice or additional information. In case of litigation, evidence of notification must be available.
- If only some items on a multiple item invoice are being questioned, departments must pay, within the original 30day period, the portion of the invoice that is not in dispute.
- Interest charges and latepayment penalties must be paid from existing operating funds of the related program.
- Departments will conduct internal audits of their compliance with this policy.
- The Treasury Board Secretariat will monitor the effectiveness of this policy through the review of departmental internal audit reports.
- The Treasury Board Secretariat will develop a central data base of payment information based on periodic reports from departments.
Financial Administration Act, section 33 and sections 66 to 71;
Payment Requisitioning Regulations pursuant to sections 10 and 33 of the Financial Administration Act (SOR/85999 as amended by SOR/8668 and 93258);
Assignment of Crown Debt Regulations pursuant to section 71 of the Financial Administration Act (C.R.C. c.675, as amended by SORs/81339, 82726 and 9135).
8.2 Treasury Board Secretariat publications
Electronic Authorization and Authentication, Chapter 22, "Comptrollership" volume of the Treasury Board Manual;
Account verification, Chapter 25, "Comptrollership" volume of the Treasury Board Manual.
8.3 Other publications
Receiver General Directive 19867, Payment on Due Date, Automatic Payment of Interest on Overdue Supplier Accounts; 19867R1 Revision #1 dated September 15, 1989;
Receiver General Directive 198612, Design of Forms for Input to the Central Accounting System;
Receiver General Directive 19895, Central Accounting Journal Vouchers;
Receiver General Directive 19903, Interdepartmental Settlement Procedures; and
Receiver General Directive 19946, Procedures Respecting the Assignment of Crown Debts and their Subsequent Payment.
Enquiries concerning this policy should be directed to your departmental headquarters. For interpretation of this policy, Departmental headquarters should contact:
Financial Management Policy Division
Financial and Contract Management Sector
Financial and Information Management Branch
Treasury Board Secretariat
Telephone: (613) 957-7233
Facsimile: (613) 952-9613
Appendix A - Guidelines
- Departments are encouraged to establish standards of timeliness for each step in the processing of an invoice and, where it is costeffective, to consider apportioning interest charges among the various organizations involved in accordance with their responsibility for the delays that caused interest charges to be incurred. Usually, interest is paid only if the government is responsible for the delay and the contract includes a provision for the payment of interest.
- Departments are encouraged to work with the Department of Public Works and Government Services to submit their payment requisitions in an electronic format and to incorporate automated data integrity features, such as digital signatures, in their systems.
- The Assignment of Crown Debt Regulations recognize the Receiver General as the sole authority for determining whether a particular assignment and related power of attorney will be recognized by the Crown. If a payment is made to someone other than the acknowledged assignee, the Crown may remain legally liable to the assignee for the payment and may be responsible for the recovery of the unauthorized payment.
- When there is a requirement for an official certification or attestation such as a travel claim or a delegation of authority document, an original signature, not a facsimile produced by a signing machine, is required, unless a statute or regulation specifically provides for the use of a machine for this purpose (e.g. Receiver General cheques, Government of Canada securities). The use of a facsimile produced by a signing machine is to be reserved for routine correspondence and other documents not requiring the exercise of ministerial discretion and authority and not requiring certification or attestation.
- When a paper batch, printed on either dot matrix printer or laser printed single sheets is submitted in support of requisitions on an electronic medium, such as magnetic tape, the person certifying must ensure that a direct link exists between the electronic medium and the paper batch. To that end, each page of the paper batch should be fastened together and should carry the following information; the batch number, the requisition number, the date, "page X of Y", and a reference number to allow the identification of the magnetic tape or diskette containing the requisitions. The person certifying should sign both the first and last page of the paper batch.
- When a payment is considered overdue and interest has to be paid, i.e. when the contract provides for interest, the rate payable is the average daily Bank of Canada rate for the month preceding the current month, plus 3 per cent. The interest rate will be posted on the PWGSC internet home page. The PWGSC internet address is http://www.pwgsc.gc.ca/text/podde.html for the English version and http://www.pwgsc.gc.ca/text/poddf.html for the French version. PWGSC has also established a telephone number for the PODD interest rate. The telephone number is (613) 9533830. The interest rate that applies to overdue payments is the interest rate that is in effect on the payment date.
- A payment is considered overdue on the 31st day following the date on which the requirements of the contract have been satisfied, or the date on which an invoice in proper form has been received, whichever is later.