1.1 This directive takes effect on October 1, 2009.
1.2 It replaces the Policy on Account Verification (dated May 11, 1998).
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 Policy on Internal Control by outlining the responsibilities of the chief financial officer, individuals delegated signing authority for section 34 of the Financial Administration Act , and financial officers regarding the verification process of payments and settlements.
3.2 The spending of public money requires that integrity, accountability and transparency are maintained to a high standard. This requires the establishment of responsible account verification processes that maintain sound stewardship of financial resources. As part of the account verification process, transactions are reviewed for accuracy such as ensuring that the payment is not a duplicate, that discounts have been deducted, that any charges not payable have been removed and that the amount has been calculated correctly.
3.3 Account verification provides a means to ensure that the work has been performed, the goods supplied or the services rendered, relevant contract or agreement terms and conditions have been met, the transaction is accurate, and all authorities have been complied with. As required by the Financial Administration Act , all payments and settlements are to be certified pursuant to sections 33 and 34. Financial signing authorities are to be exercised according to the requirements of the Financial Administration Act , the Directive on Delegation of Financial Authorities for Disbursements and departmental delegation documents.
3.4 This directive is to be read in conjunction with the following:
3.5 This directive is issued pursuant to sections 7 and 34 of the Financial Administration Act .
Definitions to be used in the interpretation of this directive are in the Appendix .
To ensure that accounts for payment and settlement are verified in a cost-effective and efficient manner while maintaining the required level of control to ensure prudent management of financial resources.
The chief financial officer is responsible for:
6.1.1 Establishing risk-based management practices and controls to ensure effective internal controls over account verification that specify the following:
6.1.2 Documenting and communicating account verification management practices and controls to individuals and financial officers responsible for certifying payments and settlements.
6.1.3 Ensuring that persons exercising delegated authority for sections 33 and 34 of the Financial Administration Act do so in accordance with requirements on separation of duties found in the Directive on Delegation of Financial Authorities for Disbursement .
6.1.4 Determining that training has been provided as specified in the Policy on Learning, Training and Development and in the Directive on the Administration of Required Training for those departments to which the 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.
6.1.5 Approving and reviewing on a regular basis sampling plans that have been selected by financial officers while conducting their quality assurance and verification responsibilities.
Individuals who have been delegated authority to confirm and certify entitlement are responsible for the following:
6.2.1 The performance of account verification on a timely basis and for the correctness of the payment requested.
6.2.1.1. They are to confirm and certify the following, as applicable. Note that section 34 of the Financial Administration Act applies.
6.2.1.2. In addition, they are to verify the following:
6.2.2 Ensuring that there is auditable evidence of verification; that is, ensuring that the process identifies individuals who performed the account verification or ensures there is an electronic audit trail .
Financial officers are responsible for the following:
6.3.1 Ensuring that payments and settlements are verified according to the following requirements:
6.3.1.1. When exercising payment authority pursuant to section 33 of the Financial Administration Act , ensuring that:
6.3.1.2. In addition, when exercising payment authority, ensure that:
6.3.2 Establishing sound sampling plans and practices, such as statistical and computer assisted sampling, based on the risk level of transactions, through an analysis of the cost-effectiveness of implementing such a practice. Criteria to evaluate the risk level include: impact, likelihood, the type of payment, the dollar value, the supplier or payee and the current error rate from particular organizations.
6.3.3 Ensuring that sampling practices and related techniques that are selected are sufficiently accurate and enable reporting on results to demonstrate the overall adequacy and reliability of the account verification process.
6.3.4 Although account verification is normally performed prior to payment, completing account verification after the payment has been made is permitted in certain situations (e.g. monthly acquisition card consolidated payments made at the departmental level), provided the claim for payment is considered reasonable based on the following criteria:
6.3.5 Documenting post-payment verification procedures for the specific payments that are paid subject to the provisions of paragraph 6.3.4 of this directive.
6.3.6 Reporting for income tax purposes, according to the Canada Revenue Agency requirements when payments for service contracts and for mixed goods and services contracts are made.
6.3.7 Requesting corrective action when critical errors are identified during the quality assurance process for payment authority.
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.
This section identifies other significant departments with respect to this directive. In and of itself, it does not confer an authority.
The Treasury Board Secretariat, Office of the Comptroller General is responsible for development, oversight and maintenance of this directive and for providing interpretative 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
Email:
fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233
Fax: 613-952-9613
Audit trail (piste de vérification) – Are the elements that allow tracking of a complete process. These include delegation of authorities' matrices, user profiles, data and files required to reconstruct the sequence of events and the transactions processed.
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.
Risk criteria (critères de risque)
High(élevé) – Includes highly sensitive transactions, for example, when an error in payment is non-recoverable, or when payments that are largely judgmental, subject to interpretation, involve very large dollar amounts, or considered highly error prone.
Low (faible) – Includes transactions that are not sensitive in nature, have little or no potential financial loss associated with them, or have a low error rate with a low dollar-value impact of error, usually low to medium dollar value, and are recoverable.
Medium(moyen) – Includes transactions not considered either high risk or low risk.