Directive on Delegation of Financial Authorities for Disbursements
This directive replaces:
1. Effective date
1.1 This directive takes effect on October 1, 2009.
1.2 It replaces the following:
- Policy on Delegation of Authorities (dated December 1, 1993); and
- Information Bulletin, Delegation of Financial Authorities (dated October 23, 1996).
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 In any large organization, the responsible and risk-based delegation of functional authorities in such areas as finance, contracting and human resources is an essential element of sound management. Delegation of financial payment authorities constitutes a key internal control mechanism that plays an essential role in the expenditure process and achieving departmental and government priorities and objectives. The appropriate delegation of authorities can empower the employees of the organization and permit their development and growth while maintaining accountability. It allows leaders to free up their time, their skills and their abilities to yield the greatest benefits to the organization.
3.2 In support of the Policy on Financial Management Governance and the Policy on Internal Control, this directive sets out specific requirements for the delegation of financial authorities under sections 33 and 34 of the Financial Administration Act and the chief financial officer's responsibilities for establishing internal controls for delegations of financial authority regarding the expenditure process.
3.3 The directive does not specify requirements for the delegation of non-financial authorities due to the numerous departmental legislative configurations in place and the nature of each department. Note that the Directive on Expenditure Initiation and Commitment Control establishes the requirements for the delegation of authorities for expenditure initiation and the recording of commitments. For other authorities, senior officials should seek legal advice before delegations are formalized.
3.4 When applying this directive, other acts, policies and directives that further restrict delegation are to be considered.
3.5 This directive is issued pursuant to sections 7 and 34 of the Financial Administration Act
3.6 This directive is to be read in conjunction with the Policy on Internal Control.
Definitions to be used in the interpretation of this directive are in the Appendix.
5. Directive statement
To ensure that appropriate financial and operational management controls are applied to the delegation of financial authorities associated with the expenditure process.
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.
- Responsibilities and accountabilities related to delegation of financial authorities within departments are clearly defined.
- Delegations are assigned and managed in a manner that clearly demonstrates responsibility and accountability.
- Departmental management controls are designed in a way to efficiently and effectively manage delegations of authorities.
The chief financial officer is responsible for supporting the deputy head in the implementation of this directive and the management of delegated authorities by ensuring the following:
6.1 Financial authorities
6.1.1 Financial authorities delegated by the appropriate minister for his or her portfolio, or by the deputy minister for his or her department solely, in accordance with sections 33 and 34 of the Financial Administration Act are communicated in writing. Such delegations are consistent with subsection 6.1.1 of the Directive on Account Verification. Note that not all deputy heads have the status of deputy minister.
6.1.2 No person is permitted to exercise financial authorities unless the appropriate minister or the deputy minister has formally delegated these authorities as established under sections 33 and 34 of the Financial Administration Act and the incumbent's supervisor or superior has formally designated that person.
6.1.3 When financial authorities are to be delegated under a memorandum of understanding between departments or in other circumstances, the signature of either the minister or deputy minister is obtained.
6.1.4 Persons designated to exercise financial authorities do not delegate these authorities to others.
6.1.5 Limits on financial authority to requisition payments or charges against an appropriation include a maximum dollar amount for each position, unless "full" authority is granted. When the incumbent of a position is granted authority for requisitioning pay transactions, in addition to other payment requisitions, two different limits may be shown.
6.2.1 Authorities are delegated to positions identified by title, not to individuals identified by name.
6.2.2 Persons with delegated authority do not exercise the following:
- Certification authority and payment authority on the same payment;
- Spending, certification or payment authority for an expenditure from which they can directly or indirectly benefit (e.g., when the payee is the individual with financial signing authority or when the expenditure is incurred for the benefit of that individual).
6.2.3 The appointment of a new minister does not automatically nullify existing authorities. However, a new document for delegated authorities is to be prepared for signature by the minister or deputy minister or both within 90 days following the appointment of a new minister.
6.3 Management practices and controls
6.3.1 Management practices and controls are established to ensure the following:
- Delegations are risk based.
- Delegation documents are standardized for the department.
- Timelines are respected for completion of a new delegation document following the appointment of a new minister (see subsection 6.2.3 of this directive).
- No person exercises delegated authorities unless he or she has successfully completed the required training or has validated knowledge associated with his or her professional or legal responsibilities. The Policy on Learning, Training and Development and the Directive on the Administration of Required Training specify the training requirements for those departments to which the training policy and directive apply. For departments not subject to this policy and directive, the chief financial officer or a person designated by the deputy head, is required to establish departmental training requirements relevant to this directive.
- At a minimum, controls pertaining to all delegated financial authorities are reviewed and updated annually. These include delegation instruments, electronic authorization matrices, specimen signature documents, validation processes and authentication processes in use in departments.
- Signatures (e.g., written and electronic) of persons authorized to exercise financial authorities can be authenticated before or after the processing of the transaction for expenditure decisions.
- The following functions are kept separate when responsibility is assigned to individuals involved in the expenditure
- Authority to enter into a contract (transaction authority);
- Certification of the receipt of goods and the provision of services according to section 34 of the Financial Administration Act (certification authority);
- Determination of entitlement, verification of accounts and preparation of requisitions for payment or settlement according to section 34 of the Financial Administration Act (certification authority);
- Certification of requisitions for payment or settlement according to section 33 of the Financial Administration Act (payment authority); and
- If the process or other circumstances do not allow such separations of duties as identified above, alternate control measures are implemented and documented.
6.4 Monitoring and reporting requirements
6.4.1 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.
6.4.2 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 is responsible for the authentication of requisitions for payment and interdepartmental settlements.
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 , sections 2, 7(3), 32, 33, 34, 41(1), 76, 155, 155.1, and 156
- Interpretation Act , sections 3 and 24
- Department of Public Works and Government Services Act
- Government Contracts Regulations
- Personal Information Protection and Electronic Documents Act
- Secure Electronic Signature Regulations
9.2 Related policy instruments and publications
Please direct enquiries about this directive to your departmental headquarters and legal services. 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
- Authentication (authentification)
- Is the process by which an authorization is verified to ensure, before further processing, that the authorizer can be positively identified, that the integrity of the authorized data was preserved and that the data are original.
- Certification authority (pouvoir d'attestation)
- Is the authority, according to section 34 of the Financial Administration Act to certify, before payment, contract performance and price, entitlement or eligibility for the payment.
- Commitment authority (pouvoir d'engager des fonds)
- Is the authority to carry out one or more specific functions related to the control of financial commitments as required in the Directive on Expenditure Initiation and Commitment Control.
- Delegate (also delegated or delegation) (déléguer [aussi délégué ou délégation])
- Is an action by which a person (i.e., delegator), vested with specific statutory authority, assigns a specific power or function to another.
- Deputy minister (sous ministre)
- For the purpose of this directive, is a deputy of a minister referred to in section 24 (2) (c) of the Interpretation Act.
- Designate (désigner)
- Is the act of appointing a person to exercise specific authorities or functions.
- Expenditure initiation authority (pouvoir d'engagement des dépenses)
- Is the authority to incur an expenditure or to make an obligation to obtain goods or services that will result in the eventual expenditure of funds. This includes the decision to hire staff, to order supplies or services, to authorize travel, relocation or hospitality or to enter into some other arrangement for program purposes.
- Expenditure process (processus de dépenses)
- Includes both spending and financial authorities.
- Financial authorities (pouvoirs financiers)
- Is certification and payment authority for purposes of this directive.
- Full authority (pleins pouvoirs)
- Is the authority that extends to the limit of the associated budget allocated to the position. It is limited by applicable legislation, policies and directives.
- Incumbent or officeholder (titulaire)
- Is the holder of a position or office including a person appointed to an office on an acting or temporary basis. An incumbent does not have to be a federal public service employee.
- 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, fulfill its obligations and achieve its objectives.
- Payment authority (pouvoir de payer)
- Is the authority to requisition payments according to section 33 of the Financial Administration Act.
- Spending authorities (pouvoirs de dépenser)
- Consists of three elements: expenditure initiation authority, commitment authority and transaction authority.
- 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).