Rescinded [2017-04-01] - Directive on Departmental Bank Accounts

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1. Effective date

1.1 This directive takes effect on October 1, 2009.

1.2 It replaces the Policy on Departmental Bank Accounts (dated January 15, 1998).

2. Application

This directive applies to departments as defined in section 2 of the Financial Administration Act.

3. Context

3.1 This directive supports the objectives of the Policy on Internal Control with respect to the effective use and control of departmental bank accounts (DBAs) by outlining the roles and responsibilities of the chief financial officer and managers with the delegated authority to administer DBAs.

3.2 A DBA is a bank account established in a financial institution by the Receiver General allowing a department to make expenditures in locations where the normal facilities for the issuance of Receiver General cheques are not immediately available. There are two types of DBAs  -  zero-balance accounts, used in Canada, and imprest accounts, used in foreign countries.

3.3 The use of DBAs is a costly payment method and should be avoided in most cases.  The Receiver General's Standard Payment System (SPS) is the usual and most cost-effective means for making regular government payments.  Other preferred payment methods include the use of acquisition cards, travel cards, or SPS priority payments, which are processed either electronically by Public Works and Government Service Canada (PWGSC) or by cheque issuance at a PWGSC or departmental cheque print site.  

3.4 An application is submitted for approval to the Receiver General before a DBA is established, from which only certain types of expenditures may be made pursuant to section 7 of Part II of the Cheque Issue Regulations.

3.5 Only the Receiver General may establish DBAs within Canada at financial institutions. Outside of Canada, accounts are to be established through the Receiver General at a financial institution designated by the minister of Finance.  For example, the Department of Foreign Affairs and International Trade has established DBAs to provide services to diplomatic missions abroad.

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:

3.11 Part II and III of the Cheque Issue Regulations; and

3.12 Directive on Payment Requisitioning and Cheque Control.

4. Definitions

Definitions to be used in the interpretation of this directive can be found in Appendix A.

5. Directive statement

5.1 Objective

To ensure that departmental bank accounts are used effectively and are properly controlled.

5.2 Expected outcome

  • Financial resources are used appropriately, based on the right authority, and losses due to waste, abuse, mismanagement, errors, frauds, omissions and other irregularities are minimized;
  • The use of DBAs is limited to locations where normal facilities for the issuance of Receiver General cheques are not immediately available; and
  • DBAs are established or DBA cheques are issued only if other preferred methods of payment are not feasible or cost-effective.

6. Requirements

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

6.1.1 The effective use and proper control of DBAs whereby all DBA payments are governed by and limited to the specific approvals received from the Receiver General or the Treasury Board;

6.1.2 Establishing risk-based management practices and controls for processing transactions and for procuring, safekeeping, controlling and handling of cheques.

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; and

6.1.4 Ensuring that the authority to make DBA expenditures that fall outside of the standard classes of payments, exceed the maximum amounts allowed or carry only one signature, is obtained from Treasury Board (see Appendix B for Treasury Board submission requirements).  Note that the Cheque Issue Regulations apply.

6.2 Managers with the delegated authority to administer DBAs are responsible for the following:

6.2.1 Respecting Receiver General and Treasury Board directivesfor establishing and operating DBA a zero-balance account (i.e., a DBA in Canada).  Note that Receiver General Directive1999-7R2, Departmental Bank Accounts (DBA) for Departments and the Directive on Payment Requisitioning and Cheque Control apply;

6.2.2 Contacting the Banking Arrangements Directorate of PWGSC to establish an imprest account (i.e., a DBA in a foreign country); and

6.2.3 Ensuring that deposits to imprest accounts are restricted to funds that either establish, replenish or augment the account, and to refunds or repayments of expenditures or advances made from the account.

6.3 Monitoring and reporting requirements

6.3.1 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.

6.3.2 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. Consequences

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.

8. Roles and responsibilities of government organizations

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 the following:

  • Tendering and issuing standing offers and contracts for DBA cheques;
  • Ensuring cheques ordered meet government and Canadian Payment Association standards;
  • Establishing and closing cheque issue locations;
  • Reimbursing the Bank of Canada for amounts drawn on zero-balance accounts;
  • Reconciling amounts transferred to DBAs with the statements from the financial institutions, as well as reconciling the accounts in the Receiver General-General Ledger for outstanding cheques;
  • Providing cheque redemption services; and
  • Liaising with the Department of Finance to confirm which financial institutions have been designated for use outside of Canada.

For a detailed listing of the Receiver General's responsibilities for DBAs, refer to Receiver General Directive 1999-7R2.

8.2 The Department of Finance designates the financial institutions outside Canada that may be used to establish imprest accounts.

8.3 The Treasury Board Secretariat, Office of the Comptroller General is responsible for development, oversight and maintenance of this directive and for providing interpretation advice.

9. References

9.1 Relevant legislation and regulations

9.2 Related policy instruments and publications

10. Enquiries

10.1 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

Email: fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233
Fax: 613-952-9613

10.2 For details concerning banking arrangements, departmental headquarters should contact:

Director
Banking Arrangements Directorate
Banking and Cash Management Sector
Accounting, Banking and Compensation Branch
Public Works and Government Services Canada
Gatineau QC  K1A 0S5

Telephone: 819-956-2945
Facsimile: 819-956-7595

10.3 For details concerning designated financial institutions outside Canada, departmental headquarters should contact:

Director
Financial Markets Division
Financial Sector Policy Branch
Department of Finance
Ottawa ON K1A 0G5

Telephone:613-947-2353
Fax: 613-943-2039

Appendix A — Definitions

cheque print site (imprimerie de chèques)
Is a facility in a department or at Public Works and Government Services Canada where the printing of priority Receiver General cheques is carried out.
foreign currency wire (câble en monnaie étrangère)
Is a service provided by financial institutions for transferring money to and from foreign countries.
imprest account (compte d'avance fixe)
Is a departmental bank account located in a foreign country. These bank accounts are set up by the Receiver General in the name of a department, and are funded through an advance issued in compliance with the Accountable Advances Regulations. Departments may make restricted deposits to and issue cheques from this account.
management practices and control (pratiques et contrôles de gestion)
Are policies, processes, procedures and systems that enable a department to operate its programs and activities, use its resources effectively, exercise sound stewardship, fulfill its obligations and achieve its objectives.
priority payment (paiement prioritaire)
Is a cheque or an electronic payment processed on a priority basis.
Standard Payment System (SPS) (système normalisé des paiements [SNP])
Is the Receiver General's system for processing Receiver General payments, whether payments by cheque or by electronic means such as direct deposit.
zero-balance account (compte à solde zéro)
Is a departmental bank accountused in Canada and funded in Canadian dollars. The Receiver General sets up these accounts in the name of a department with a financial institution in Canada. These accounts are only used to issue cheques for authorized classes of payments.

Appendix B — Submissions to the Treasury Board for Departmental Bank Accounts

Specific Treasury Board approval is required to use a departmental bank account (DBA) for payments that are:

  • Outside of the standard classes of expenditures;
  • In excess of the maximum amounts allowed (note that the Cheque Issue Regulations apply); or
  • Issued with a single signature on the cheque.

The submission is to contain the following information, as applicable:

  • Name of the account;
  • Cheque-issuing location(s);
  • Proposed classes of expenditures to be made from the account, including the estimated number of payments that will be made monthly;
  • Number of signatures required on cheques from each cheque-issuing location;
  • Position titles and levels of the proposed signing officers;
  • Treasury Board authorization requested and reason for the exception;
  • Dollar limits required by class of expenditure proposed for the DBA; and
  • In the case of an imprest account, the amount needed to fund the account that minimizes the reimbursement cycle.

For further information consult Guide to Preparing Treasury Board Submissions.