Directive on Acquisition Cards
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1. Effective date
1.1 This directive takes effect on October 1, 2009.
1.2 It replaces the following:
- Policy on Acquisition Cards (dated January 1, 1998);
- Information Notice, Government Acquisition Card Contract
(dated November 5, 2001);
- Policy Notice, Policy on Acquisition Cards – Internet Transactions
(dated April 9, 2001);
- Information Bulletin, Credit Cards Security Issue (dated December 3, 1999);
- Information Bulletin, Corcan-Acceptance of Acquisition Credit Card (dated November 29, 1999);
- Information Bulletin, Acquisition Cards (dated September 14, 1999); and
- Information Bulletin, Corcan-Acceptance of Acquisition Credit Card (dated March 1, 1999).
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 policy 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 policy 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 roles and responsibilities of chief financial officers, departmental acquisition card coordinators, responsibility centre managers, and individual cardholders when administering and using acquisition cards. This directive establishes a consistent approach that ensures effective financial controls for the administration of acquisition cards within departments.
3.2 Acquisition cards are charge cards that provide a convenient and practical method of procuring and paying for goods and services while maintaining financial control. They simplify the process of procuring and paying for goods and services thereby generating savings in procurement and expenditure processing. Procurements using an acquisition card are subject to the requirements of contracting policies and various Acts, Regulations, trade agreements and Comprehensive Land Claim Agreements, as applicable.
3.3 The use of acquisition cards is recommended for purchases of day to day expense items for standard maintenance, repair and operational goods and services, excluding large dollar purchases, complex transactions, fleet-related operating expenses, travel and capital assets. Although the use of an acquisition card is not mandatory, it is strongly encouraged when the purchase is within delegated transaction authority and it is efficient, economical and operationally feasible to do so.
3.4 Although acquisition cards are typically issued in the name of an individual, in exceptional circumstances it is possible to have acquisition cards issued in the name of an organizational asset, such as a vessel, provided adequate controls are in place. This exception provides certain departments with the required flexibility to charge large dollar operating transactions to an acquisition card directly related to a mobile asset, such as a vessel.
3.5 This directive is issued pursuant to section 7 of the Financial Administration Act.
3.6 This directive is to be read in conjunction with the following:
- Policy on Internal Control ;
- Contracting Policy ;
- Policy on the Application of the Goods and Services Tax and the Harmonized Sales Tax in the Departments and Agencies of the Government of Canada - For FIS compliant Departments and Agencies ;
- Policy on the Collection and Remittance of Provincial Sales Taxes (Application of Reciprocal Taxation Agreements and Comprehensive Integrated Tax Coordination Agreements)
- Directive on Expenditure Initiation and Commitment Control ;
- Directive on Account Verification ; and
- Government Security Policy. .
Definitions to be used in the interpretation of this directive are in the Appendix.
5. Directive statement
To provide a cost-effective, secure and convenient method of procuring and paying for government goods and services while ensuring effective financial control.
5.2 Expected results
- 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 reduction or elimination of more costly and burdensome transaction procurement and payment methods such as the use of Receiver General cheques, requisitions and purchase orders.
6.1.1 Identifying a departmental acquisition card coordinator;
6.1.2 Ensuring that responsibilities of the departmental acquisition card coordinator, managers and cardholders are communicated;
6.1.3 Providing documentation to and training for cardholders;
6.1.4 Ensuring that payment terms as specified in the contracts with card issuers are communicated;
6.1.5 Establishing the types of items that may be purchased, the dollar limits of purchases, and any limitation on certain types of purchases, notwithstanding acquisition card issuer limitations on purchases;
6.1.6 Where acquisition cards are used for capital asset purchases, ensuring such transactions are properly recorded. Note that TBAS 3.1 applies for determining threshold levels;
6.1.7 Ensuring that the following applications and restrictions for acquisition cards are specified and communicated, notwithstanding card issuer limitations on purchases:
- Cards are to be used solely for authorized government business-related purchases of goods, services and pre-approved hospitality expenditures;
- Cards are not to be used for the following:
- most operating and maintenance expenses of fleet vehicles but excluding vehicle licence fees, routine procurement of vehicle supplies for the sole purpose of accumulating an inventory of items such as batteries, tires, oil, filters, spare parts, etc., or when a fleet credit card is not accepted by a supplier;
- travel status-related expenses;
- obtaining cash advances. Charge card advance cheques are not to be requested or, if received, are not to be used; and
- interdepartmental transactions (except for transactions with CORCAN, a special operating agency of Correctional Service of Canada).
6.1.8 Ensuring that payment to the acquisition card companies is made by the due date. Payments made in advance of the standard due date are encouraged in order to maximize early payment rebates received from the charge card issuer. Note that the Directive on Payment Requisitioning and Cheque Control applies;
6.1.9 Approving the circumstances when an acquisition card may be issued in the name of an organizational asset, such as a vessel (e.g. ship) and ensuring that all such requests go through the PWGSC/Banking Arrangements Directorate;
6.1.10 Ensuring economical, effective and secure use of acquisition cards issued in the name of an organizational asset by establishing separate controls and procedures and taking into account the unique risks associated with the organizational asset.
6.2 Departmental acquisition card coordinators are responsible for the following:
6.2.1 Authorizing the issuance of acquisition cards and ensuring that they are issued in the name of an individual or when issued in the name of an organizational asset, that the pre-approval of the chief financial officer was obtained;
6.2.2 Obtaining a written acknowledgement of responsibilities and obligations from the cardholder prior to issuing an acquisition card;
6.2.3 Ensuring that the use of acquisition cards is monitored; and
6.2.4 Managing the departmental acquisition card program.
6.3 Responsibility centre managers are responsible for the following:
6.3.1 Recommending which employees should be cardholders;
6.3.2 Recommending reasonable credit limits based on planned use and for reassessing the need on a periodic basis or when responsibilities change;
6.3.3 Ensuring that there is a sufficient unencumbered balance available before entering into acquisition card transactions. Note that subsection 32(2) of the Financial Administration Act and the Directive on Expenditure Initiation and Commitment Control apply;
6.3.4 Ensuring account verification is performed. Note that the Directive on Account Verification applies;
6.3.5 Certifying the cardholders' statements at least monthly. Note that section 34 of the Financial Administration Act applies; and
6.3.6 Ensuring the card is returned to the departmental acquisition card coordinator upon employee departure.
6.4 Cardholders are responsible for the following:
6.4.1 Ensuring that the person whose name appears on the card is the only one who uses it and that cards are used to make authorized official government purchases and payments within the limitations established pursuant to this directive and according to limits established in the departmental delegation of authority document;
6.4.2 Providing a written acknowledgement of responsibilities and obligations prior to receiving an acquisition card from the departmental acquisition card coordinator;
6.4.3 Ensuring that when the card is issued in the name of an organizational asset, the person who uses the card, for the purpose of acquiring goods or services on behalf of the asset, is authorized to use it;
6.4.4 Obtaining sufficient and appropriate authorization, before making purchases, from the incumbent who has expenditure initiation and transaction authority, if the cardholder does not have formal delegated expenditure initiation or transaction authority;
6.4.5 Ensuring that they do not exercise financial signing authority for the settlement of their own acquisition card statements under any circumstances. Note that sections 33 and 34 of the Financial Administration Act apply;
6.4.6 Ensuring that transactions are not split into two or more transactions in order to avoid limits set for purchases pursuant to section 6.1 of this directive;
6.4.7 Claiming provincial sales tax exemptions at the time the purchase. Note that the Policy on the Collection and Remittance of Provincial Sales Taxes (Application of Reciprocal Taxation Agreements and Comprehensive Integrated Tax Coordination Agreements) applies;
6.4.8 Ensuring that refunds or credits in relation to acquisition card purchases are requested using the same acquisition card used for the original transaction, and not by cash or cheque issue unless refunds or credits are not available from the supplier;
6.4.9 Providing evidence of approval of transactions and documentation to support the monthly or periodic acquisition card statement. Note that the Directive on Account Verification applies;
6.4.10 Safeguarding card information and ensuring that the card is kept in a secure location at all times as advised by the Departmental Security Officer. Note that the Policy on Government Security and related standards apply;
6.4.11 Confirming website security and obtaining assurance that the transaction is with the desired supplier prior to making purchases over the Internet;
6.4.12 Notifying the departmental acquisition card coordinator and card issuer immediately when a card is lost or stolen or when erroneous or fraudulent transactions are noted; and
6.4.13 Returning cards upon departure from the department or when requested to do so.
6.5 Monitoring and reporting requirements
6.5.1 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.
6.5.2 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.
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 the contracts for the acquisition cards;
- Developing and issuing operating instructions related to the administration of the acquisition card program;
- Receiving and evaluating requests from departments and acquisition card issuers to expand the existing program; and
- Monitoring the operation of the acquisition card program and departmental payment patterns, and taking corrective action when required.
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.
9.1 Other relevant legislation and regulations
- Financial Administration Act (R.S. 1985, c. F-11) sections 2, 7, 32, 33 and 34
9.2 Related policy instruments and publications
- Contracting Policy
- Hospitality Policy
- Directive on Losses of Money and Property
- Directive on Expenditure Initiation and Commitment Control
- Directive on Account Verification
- Policy on the Application of the Goods and Services Tax and the Harmonized Sales Tax in the Departments and Agencies of the Government of Canada - For FIS compliant Departments and Agencies
- Policy on the Collection and Remittance of Provincial Sales Taxes (Application of Reciprocal Taxation Agreements and Comprehensive Integrated Tax Coordination Agreements)
- Directive on Payment Requisitioning and Cheque Control
- Directive on Delegation of Financial Authorities for Disbursements
- Directive on Fleet Management – Executive Vehicles
- Directive on Fleet Management – Light Duty Vehicles
- Guide to Fleet Management
- Receiver General Manual _ Chapter 9 _ "Government of Canada Acquisition Card Program"
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
10.2 For enquiries related to the administration of the acquisition card program and departmental relationships with the card issuing financial institutions, departmental headquarters should contact:
Banking Arrangements Directorate
Accounting, Banking and Compensation Branch
Public Works and Government Services Canada
Gatineau QC K1A 0S5
Appendix — Definitions
- Acquisition card (carte d'achat)
- Is a charge card issued under a contract between card issuers and the Government of Canada for the procurement and the payment of goods and services that are authorized official government business transactions.
- Cardholder (détenteurs de carte)
- Is an employee who is identified by his/her responsibility centre manager to be issued an acquisition card in his/her name, or, when an acquisition card is issued in the name of an organizational asset, is an employee to whom the card is assigned for the purpose of acquiring goods or services on behalf of the organizational asset named on the card.
- Management practices and controls (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, fulfil its obligations and achieve its objectives.
- Organizational asset (actif d'organisme)
- Is a high-value mobile asset, such as a vessel (e.g. ship) or aircraft (excluding motor vehicles), requiring frequent large dollar transactions to support its operation.
- Periodic (périodique)
- Is an interval of time determined to be reasonable by the chief financial officer based on risk and on the particular departmental circumstances (e.g., volume of transactions, automation of systems, size and structure of organization)
- Transaction authority (pouvoir d'exécuter une opération)
- Is the authority to enter into contracts, including acquisition card purchases, or sign-off on legal entitlements (e.g. employment insurance payments).