Guideline on Common Financial Management Business Process 3.3 - Manage Other Payments

This guideline defines Manage Other Payments, which involves those common ^{See footnote [6]} payment transactions not covered by Manage Interdepartmental Settlements (Business Process 2.2), Manage Procure to Payment (Business Process 3.1), Manage Travel (Business Process 3.2), Pay Administration (Business Process 5.1), and Manage Grants and Contributions (Business Process 6.1).

The following categories of common payment transactions are covered in this guideline:

• Other operational payments result in charges against appropriations and include awards, honoraria, ex gratia payments, repayable loans, employee reimbursements, returns as described in section 20 of the Financial Administration Act (FAA), accountable advances (excluding travel advances, which are covered in Manage Travel (Business Process 3.2)), and imprest funds. These payments do not use a purchase order to initiate a transaction and do not follow a formal procurement process.
• Legal payments also result in charges against appropriations and include settlements, claims against the Crown, and nugatory payments. These transactions are triggered by a court or a tribunal decision rather than by a program requirement. Because these transactions do not involve the acquisition of goods or services, there is no procurement process. A legal opinion and documentation, such as the copy of the court or tribunal decision, are required before the payment can be made.
• Payments not impacting appropriations are made out of the Consolidated Revenue Fund and include garnishments, other deductions, remittances of taxes collected, payments against imprest funds, repayment of contractor holdbacks, and some types of payments against specified purpose accounts. ^{See footnote [7]} Although these transactions do not result in charges against appropriations and there is no acquisition of goods or services, FAA certification and payment authority are still required.
• Periodic payments are recurring (usually monthly) payments resulting from a multi-year agreement established under Manage Procure to Payment (Business Process 3.1), starting with the second and subsequent payments of the agreement. These payments can be a fixed amount (for example, leases and rent) or usage-based (for example, telecommunications, utilities and taxis) and result in a reduction in appropriations. There is no need to identify the requirements or to obtain expenditure initiation authority. Some organizations may conduct a reallocation exercise, to ensure that the costs are properly attributed to responsibility centres.

This guideline covers the following subprocess groups:

• Manage Requirements;
• Control Commitments;
• Manage Payables; and
• Manage Payments.

Some financial management activities described in this guideline are also related to internal controls. The intent is neither to provide a complete listing of controls, nor to produce a control framework; but the process description may provide useful content for the development of a department's control framework.

The remainder of this guideline is structured as follows: Section 4 provides an overview of the roles that carry out Manage Other Payments. Section 5 presents a detailed description of the Manage Other Payments business process, including subprocess groups, subprocesses, activities and responsible roles. Appendix A provides definitions of terminology used in the guideline, and relevant abbreviations are listed in Appendix B. Appendix C describes the methodology used in the guideline, and Appendix D elaborates on the roles and responsibilities outlined in Section 4. The process flow for the use and reconciliation of petty cash is described in Appendix E. Finally, the process flow for managing payments related to the relocation of employees is described in Appendix F.

The following references apply to this guideline.

3.3.1 Acts and Regulations

• Accountable Advances Regulations
• Federal Accountability Act
• Financial Administration Act
• Garnishment, Attachment and Pension Diversion Act
• Payments and Settlements Requisitioning Regulations, 1997

3.3.2 Policy Instruments

• Directive on Account Verification
• Directive on Accountable Advances
• Directive on Claims and Ex Gratia Payments
• Directive on Delegation of Financial Authorities for Disbursements
• Directive on Departmental Bank Accounts
• Directive on Executive Compensation
• Directive on Expenditure Initiation and Commitment Control
• Directive on Financial Management of Pay Administration
• Directive on Payment Requisitioning and Cheque Control
• Directive on Specified Purpose Accounts
• Directive on the Administration of Required Training
• Directive on the Management of Expenditures on Travel, Hospitality and Conferences
• Directive on the Stewardship of Financial Management Systems
• Foreign Service Directives
• Guideline on Accountable Advances
• Guideline on Claims and Ex Gratia Payments
• National Joint Council (NJC) Relocation Directive
• Policy on Financial Management Governance
• Policy on Internal Control
• Policy on Learning, Training and Development
• Policy on the Stewardship of Financial Management Systems
• Standards on Knowledge for Required Training

3.3.3 Other References

• Addendum - Initial Appointees Relocation Program
• Common Human Resources Business Process
• Executive Group (EX) and Governor In Council Appointees (GIC) - Relocation Provisions
• Management Accountability Framework
• Receiver General Control Framework
• Receiver General Manual

The following organizational roles act in support of legislation, such as the Financial Administration Act (FAA) and the Federal Accountability Act, and define policy or processes that must be followed.

• The Office of the Comptroller General is the policy authority for financial management and for the management of assets and acquired services.
• The Office of the Chief Human Resources Officer is the policy authority for human resources management, but some functions are also performed by the Public Service Commission of Canada.
• The deputy head is responsible for providing leadership by demonstrating financial responsibility, transparency, accountability and ethical conduct in financial and resource management. This includes compliance with legislation, regulations, Treasury Board policies and financial authorities. ^{See footnote [8]}
• The Receiver General – Accounting, Banking and Compensation Branch issues directives and guidance to federal departments on government accounting, payment and deposit.

The following organizational roles act in response to financial management policy and process requirements—for example, from the Office of the Comptroller General and from deputy heads.

• The corporate finance role supports the deputy head and the chief financial officer in meeting their financial management accountabilities by developing, communicating and maintaining the departmental financial management framework and by providing leadership and oversight on the proper application and monitoring of financial management across the department. ^{See footnote [9]}
• The strategic and corporate planning role coordinates input into the department-specific strategic, integrated, and operational planning processes defined within the department and in support of central agency requirements.
• The financial services role carries out the day-to-day transactional financial management operations.
• The responsibility centre manager role is responsible and accountable for exercising the following delegated authorities:
  • Initiating expenditures;
  • Controlling commitments pursuant to section 32 of the FAA;
  • Entering into contracts, which is known as transaction authority—this authority is outside the scope of Manage Other Payments and is covered in Manage Contracts (Subprocess 3.1.5) of Manage Procure to Payment (Business Process 3.1); and
  • Performing account verification and certification pursuant to section 34 of the FAA.

The following organizational roles act in response to policy and process requirements from the Office of the Chief Human Resources Officer, deputy heads, and the Office of the Comptroller General. These roles are not financial in nature but are included in order to provide a comprehensive description.

• The compensation role receives requests for pay transactions, confirms that the employee is eligible for the payment, performs any required calculations, and enters the transaction into the Regional Pay System (RPS). This role also performs part of the FAA section 34 certification of pay transactions and for remittance of other payroll deductions.
• The other human resources management functions role provides critical information (for example, classification decisions, identification of successful candidates in a staffing action, decisions on disciplinary actions, or identification of recipients and amounts for special awards) to responsibility centre managers, compensation and employees—information that can result in pay transactions. Note that this role does not administer pay transactions.
• The asset and materiel management services role carries out the day-to-day transactional operations for the management of assets and acquired services and for the procurement of goods and services.
• The employee role is performed by a federal government person, “who is any person currently paid a salary or remunerated from the Consolidated Revenue Fund.” ^{See footnote [10]} Employees can initiate or be the recipient of accountable advances and reimbursable expenses.

The following organizational roles provide a central service to other government departments.

• The Receiver General – Banking and Cash Management Sector manages the treasury functions of the government, which includes issuing most payments on behalf of the government and controlling the government's bank accounts.
• The legal services role is provided by the Department of Justice Canada to federal departments. The Department of Justice Canada is responsible for providing legal opinions and advice, including negotiation advice, and conducting litigation by or against the Crown and against its servants. ^{See footnote [11]} Legal services are consulted about payments such as garnishments, ex gratia payments, and claims against the Crown.

As illustrated in Figure 3, the Manage Other Payments business process comprises seven subprocesses (3.3.1 to 3.3.7). These are arranged in four subprocess groups:

• Manage Requirements;
• Control Commitments;
• Manage Payables; and
• Manage Payments.  

Because not all subprocesses apply to all categories of payments, the payment categories have different entry points to the Manage Other Payments business process, as illustrated in Figure 3. In addition, the order in which Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.1), Verify Unencumbered Balance (Subprocess 3.3.3) and Manage Commitments (Subprocess 3.3.4) are performed may differ from what is depicted in Figure 3, depending on department-specific policy or procedures.

The subprocesses within each subprocess group and the roles and responsibilities relevant to each subprocess are summarized below.

Manage Requirements

• Determine Requirements (Subprocess 3.3.1): The responsibility centre manager or an employee identifies the requirements for an expenditure on the basis of the approved plan and budget or an ad hoc requirement, and prepares the justification. This subprocess applies to other operational payments.
• Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2): The responsibility centre manager ensures that he or she has been delegated the appropriate expenditure initiation authority and exercises the authority or obtains approval. ^{See footnote [12]} This subprocess applies to other operational payments and legal payments.

Control Commitments

• Verify Unencumbered Balance (Subprocess 3.3.3): The responsibility centre manager verifies that a sufficient unencumbered balance is available before proceeding with the payment. This subprocess applies to other operational payments, legal payments and periodic payments.
• Manage Commitments (Subprocess 3.3.4): After the availability of a sufficient unencumbered balance is confirmed, a commitment is created. Commitments are recorded and updated according to department-specific policy or procedures. This subprocess applies to other operational payments, legal payments and periodic payments.

Manage Payables

• Manage Payables (Subprocess 3.3.5): Following receipt of the invoice, claim, agreement or remittance, account verification is performed pursuant to section 34 of the Financial Administration Act (FAA). Certification authority is exercised by the responsibility centre manager, ^{See footnote [13]} and a request for payment is prepared and sent to financial services. Account verification is performed by the responsibility centre manager, financial services or compensation, depending on the transaction. This subprocess applies to all four payment categories.

Manage Payments

• Perform Payment Authority (Subprocess 3.3.6): Manage Payments starts with the receipt of a request for payment. During the payment process, quality assurance is performed by financial services as part of exercising payment authority pursuant to section 33 of the FAA. This subprocess applies to all four payment categories.
• Issue Payment (Subprocess 3.3.7): The payment requisition is sent to the Receiver General for payment issuance. The payment requisition files are edited and validated, and the payments are released by the Receiver General. The Receiver General produces a generic return file containing unique payment references for control purposes. The payment records are updated in the departmental financial and materiel management system ^{See footnote [14]} by financial services, and the Manage Other Payments business process ends. When quality assurance is performed, the process flow continues to Manage Financial Close (Business Process 8.2). When quality assurance is not performed, the process flow continues to Manage Post-Payment Verification (Business Process 8.1). This subprocess applies to all four payment categories.

Table 1 illustrates the relationship between the subprocesses and the four payment categories covered by this guideline.

Table 1. Manage Other Payments (Business Process 3.3) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Note A: For periodic payments, Determine Requirements (Subprocess 3.3.1) and Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2) occur as part of Manage Procure to Payment (Business Process 3.1).
3.3.1 Determine Requirements	Applies	Does not apply	Does not apply	Does not apply( See table 1 Note A)
3.3.2 Determine and Exercise Expenditure Initiation Authority	Applies	Applies	Does not apply	Does not apply( See table 1 Note A)
3.3.3 Verify Unencumbered Balance (FAA, section 32)	Applies	Applies	Does not apply	Applies
3.3.4 Manage Commitments (FAA, section 32)	Applies	Applies	Does not apply	Applies
3.3.5 Manage Payables (FAA, section 34)	Applies	Applies	Applies	Applies
3.3.6 Perform Payment Authority (FAA, section 33)	Applies	Applies	Applies	Applies
3.3.7 Issue Payment (Receiver General)	Applies	Applies	Applies	Applies

Manage Requirements is the start of the Manage Other Payments business process for other operational payments and legal payments, beginning with the approved plan and budget from Manage Planning and Budgeting (Business Process 1.1), an ad hoc requirement, or a copy of the court or tribunal decision. This subprocess group involves the definition of requirements, prepared by an employee or the responsibility centre manager, and the determination and exercising of expenditure initiation authority.

5.2.1 Determine Requirements (Subprocess 3.3.1)

As illustrated in Table 2, this subprocess applies to other operational payments.

Table 2. Determine Requirements (Subprocess 3.3.1) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments See footnote [15]
Determine Requirements	Applies	Does not apply	Does not apply	Does not apply

Based on the approved plan and budget or an ad hoc requirement, the justification for the other operational payment is prepared by the responsibility centre manager or an employee. Figure 4 depicts the Level 3 subprocess flow for Determine Requirements.

5.2.1.1 Activities

Consistent with the approved plan and budget from Manage Planning and Budgeting (Business Process 1.1) or an ad hoc requirement, the responsibility centre manager or an employee identifies a need and prepares the justification (Activity 3.3.1.1 – Identify Needs). Other operational payments may be launched by a responsibility centre manager to disburse a monetary employee recognition award or a repayable loan established under an agreement. Alternatively, employees may submit a request to obtain an accountable advance or a reimbursement for expenses incurred—for example, for a professional development activity or for parking. Travel advances are outside the scope of this business process and are covered in Manage Travel (Business Process 3.2).

For some transactions, a consultation and a justification may be required when selecting a vendor (Activity 3.3.1.2 – Examine and Select Vendor)—for example, for employee reimbursements when the payee is the employee and the vendor is the third party selected by the employee. Although the payment is a reimbursement to an employee rather than to an external vendor, compliance with Treasury Board and departmental policies is still required.

The content of the justification varies with the type of transaction. The following are examples of the types of documentation required.

• Accountable Advances:  Employees submit a request conforming to the Directive on Accountable Advances ^{See footnote [16]} and other relevant policy instruments.
• Awards: A monetary award is supported by an awards plan and by a consultation with the other human resources management functions role, ensuring that the recognition is valid and appropriate.
• Reimbursements: For a reimbursement request related to training, learning or development, the supporting documentation should include an approved Personal Learning Plan. When the reimbursement is for hospitality, the request should be aligned with the annual budget and conform to the Directive on the Management of Expenditures on Travel, Hospitality and Conferences. 
• Repayable Loans: The posting assignment notice supports the request for a posting loan under FSD-10 of the Foreign Service Directives. Other repayable loans, excluding repayable contributions, are triggered by a loan application received and approved by the program area. (Repayable contributions are covered in Manage Grants and Contributions (Business Process 6.1)). The approval of the loan occurs in the appropriate program area, whereas this business process focuses on the loan disbursement. The collection of the loan is covered in Manage Revenues, Receivables and Receipts (Business Process 2.1).

5.2.1.2 Roles and Responsibilities

There are two potential scenarios for the activities of this subprocess. In the first scenario (S1), the employee initiates the transaction, as is the case with accountable advances and reimbursable expenses. In the second scenario (S2), the responsibility centre manager initiates the transaction. In both scenarios, the role initiating the transaction is responsible and accountable.

Table 3 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 3. Determine Requirements (Subprocess 3.3.1) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance DFMS: departmental financial and materiel management system EE: employee HR: other human resources management functions N/A: not applicable RCM: responsibility centre manager SCP: strategic and corporate planning
3.3.1.1 Identify Needs	Approved plan and budget Estimated costs Supporting documents	S1: EE S2: RCM	S1: EE S2: RCM	S1: CF, HR, RCM, SCP S2: CF, EE, HR, SCP	S1: RCM S2: N/A	S1: DFMS S2: DFMS
3.3.1.2 Examine and Select Vendor	Dates required Estimated costs Supporting documents	S1: EE S2: RCM	S1: EE S2: RCM	S1: CF, HR, RCM S2: CF	S1: RCM S2: N/A	S1: DFMS S2: DFMS

5.2.2 Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2)

As illustrated in Table 4, this subprocess applies to other operational payments and legal payments.

Table 4. Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Determine and Exercise Expenditure Initiation Authority	Applies	Applies	Does not apply	Does not apply

Responsibility centre managers ensure that they have been delegated the appropriate expenditure initiation authority and exercise or obtain that authority. ^{See footnote [17]}

For other operational payments, this subprocess continues from Determine Requirements (Subprocess 3.3.1). For legal payments, this subprocess represents the start of the Manage Other Payments business process and is launched when the department receives a copy of the court or tribunal decision. Figure 5 depicts the Level 3 process flow for Determine and Exercise Expenditure Initiation Authority.

The level of expenditure initiation authority is based on the department's delegation of authorities, according to the delegation documents approved by the minister and the deputy head, ^{See footnote [18]} where expenditure initiation authority is defined as “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 would include the decision…to order supplies or services.” ^{See footnote [19]} The creation and maintenance of the delegation of authority instruments is outside the scope of Manage Other Payments and is addressed in Manage Delegation of Financial and Spending Authorities (Business Process 7.4). Expenditure initiation authority is distinct from commitment authority, which “is the authority to carry out one or more specific functions related to the control of financial commitments.” ^{See footnote [20]} These authorities, together with transaction authority, make up spending authority. Transaction authority is outside the scope of this business process and is covered in Manage Contracts (Subprocess 3.1.5) of Manage Procure to Payment (Business Process 3.1).

5.2.2.1 Activities

The responsibility centre manager determines the appropriate expenditure initiation authority by consulting the delegation documents and Treasury Board policies (Activity 3.3.2.1 – Determine Required Expenditure Initiation Authority). When the responsibility centre manager does not possess the required expenditure initiation authority (for example, for ex gratia payments or settlements) or when the responsibility centre manager directly or indirectly benefits from the expenditure, ^{See footnote [21]} he or she should obtain the signatures of those with delegated expenditure initiation authority (Activity 3.3.2.2 – Exercise Expenditure Initiation Authority or Obtain Approval). Supporting documents, such as an agreement, an awards plan or a personal learning plan, are provided to the delegated authority.

In some situations, the authority to initiate other operational payments may not be obtained, in which case the requirements may be amended or the expenditure initiation process ends. However, departments must usually comply with a court or a tribunal decision, and therefore, expenditure initiation authority for legal payments must be obtained.

At the same time that expenditure initiation authority is being exercised, the availability of a sufficient unencumbered balance is determined ^{See footnote [22]} during Verify Unencumbered Balance (Subprocess 3.3.3). If an unencumbered balance is available, a commitment conforming to department-specific policy or procedures is created during Manage Commitments (Subprocess 3.3.4).

The Manage Requirements subprocess group ends when:

• The requirement is defined or the notice to disburse funds for legal payments is received and approved by the appropriate expenditure initiation authority;
• The unencumbered balance is confirmed during Verify Unencumbered Balance (Subprocess 3.3.3); and
• The commitment is recorded during Manage Commitments (Subprocess 3.3.4). ^{See footnote [23]}

The justification for expenditure initiation approval will vary with the type of transaction. The following are examples of the types of documentation required.

Other Operational Payments

• Accountable advances: Employees must complete a personal responsibility document, acknowledging responsibility for the advance. ^{See footnote [24]}
• Ex gratia payments: A legal opinion is required when signing off ex gratia payments ^{See footnote [25]} Ex gratia payments are approved by the appropriate delegated authority. ^{See footnote [26]}
• Repayable loans: Repayable loans are initiated in the program area where the loan agreement is completed. Approval in the form of a signed agreement is provided by the program manager with delegated authority.

Legal Payments

• Settlements: The documentation could include a settlement or an agreement duly signed by the delegated authority, or a copy of the court or tribunal decision. A legal opinion may be required. The Directive on Claims and Ex Gratia Payments provides guidance on thresholds and requirements—for example, claims over $25,000 require a legal opinion. ^{See footnote [27]} Because of the sensitive nature of settlements, the associated data should be kept confidential.

5.2.2.2 Roles and Responsibilities

There are two potential scenarios for Activity 3.3.2.1 – Determine Required Expenditure Initiation Authority. In the first scenario (S1), the employee initiates the transaction, as is the case with reimbursements. In the second scenario (S2), the responsibility centre manager initiates the transaction. In both scenarios, the role initiating the transaction is responsible and accountable.

For Activity 3.3.2.2 – Exercise Expenditure Initiation Authority or Obtain Approval, the responsibility centre manager is accountable for obtaining expenditure initiation authorization.

Table 5 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 5. Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance DFMS: departmental financial and materiel management system EE: employee N/A: not applicable RCM: responsibility centre manager
3.3.2.1 Determine Required Expenditure Initiation Authority	Delegation documents Description and type of good or service; and Estimated costs	S1: EE S2: RCM	S1: EE S2: RCM	S1: CF, RCM S2: CF	S1: RCM S2: N/A	S1: DFMS S2: DFMS
3.3.2.2 Exercise Expenditure Initiation Authority or Obtain Approval	Delegation documents	RCM	RCM	CF	EE	DFMS

The Control Commitments subprocess group involves verifying the availability of a sufficient unencumbered balance and creating and updating commitments according to department-specific policy or procedures. Control Commitments connects to two subprocess groups: Manage Requirements, to create the commitment; and Manage Payables, to ensure that sufficient unencumbered funds are available to proceed with the payment and to close the commitment once the request for payment has been issued.

5.3.1 Verify Unencumbered Balance (Subprocess 3.3.3)

As illustrated in Table 6, this subprocess applies to other operational payments, legal payments and periodic payments.

Table 6. Verify Unencumbered Balance (Subprocess 3.3.3) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Verify Unencumbered Balance	Applies	Applies	Does not apply	Applies

The responsibility centre manager ensures that a sufficient unencumbered balance is available before proceeding with the payment . ^{See footnote [28]} Figure 6 depicts the Level 3 process flow for Verify Unencumbered Balance.

The deputy head or other person charged with the administration of a program is responsible for establishing procedures to ensure that commitments are controlled and accounted for and that records pertaining to commitments are maintained. ^{See footnote [29]} In addition, departments should have processes in place to verify the availability of unencumbered balances at the time of expenditure initiation and prior to entering into a contract. ^{See footnote [30]} Commitment authority is delegated in writing to departmental officials by the deputy head. ^{See footnote [31]} The delegated official is responsible for ensuring that a sufficient unencumbered balance is available before entering into a contract or other arrangement. ^{See footnote [32]} The creation and the maintenance of the delegation documents are addressed in Manage Delegation of Financial and Spending Authorities (Business Process 7.4). Commitment control, which includes accounting for those commitments, is an ongoing activity throughout the Manage Other Payments business process.

5.3.1.1 Activities

Before proceeding with the payment, the responsibility centre manager initiating the expenditure ensures that a sufficient unencumbered balance is available by reviewing budget information, including a detailed analysis of outstanding or the previous year's commitments as well as unpaid invoices (Activity 3.3.3.1 – Determine Unencumbered Balance). Ongoing payments, such as periodic payments, require that continuing commitments are kept separate for the current fiscal year and for each future year within the most recently approved budget. ^{See footnote [33]} The unencumbered balance is reviewed when account verification is performed or when the commitment requires an update (Manage Payables (Subprocess 3.3.5)).

When a sufficient unencumbered balance is available, department-specific functions related to commitment authority are carried out (Activity 3.3.3.2 – Provide Authorization). It is essential to ensure that appropriate evidence exists to substantiate the authorization pursuant to section 32 of the Financial Administration Act, as stipulated by department-specific policy and procedures. ^{See footnote [34]}

When the unencumbered balance is insufficient, budgets are reviewed to identify alternative funding ^{See footnote [35]} or the Manage Other Payments business process ends. For legal payments, a budget reallocation is required, as described in Manage Forecasting and Budget Review (Business Process 1.2).

Further details about this subprocess are provided below for the payment categories to which it applies.

Other Operational Payments

• There are no additional details.

Legal Payments

• Given the obligatory nature of the disbursement, funds will need to be reallocated if they are not readily available.

Periodic Payments

• Anticipated periodic payments must be reflected in the approved plan and budget.
• Annually, the responsibility centre manager ensures that there are sufficient funds for upcoming periodic payments.
• It may be difficult to determine the amount of usage-based invoices because of their ad hoc nature. Typically, the amount is based on estimated expenditures, and the commitment is adjusted as needed once the invoices are processed, during Manage Payables (Subprocess 3.3.5).

5.3.1.2 Roles and Responsibilities

The responsibility centre manager is accountable for his or her commitments.

Table 7 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 7. Verify Unencumbered Balance (Subprocess 3.3.3) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance DFMS: departmental financial and materiel management system EE: employee FIN: financial services RCM: responsibility centre manager Note A: The individual exercising the delegated commitment authority may not be the same individual initiating the expenditure; the latter is therefore informed of the authorization decision.
3.3.3.1 Determine Unencumbered Balance	Appropriation Financial coding Financial data (budget, commitments, actuals to date) Payable amount	RCM	RCM	FIN	FIN	DFMS
3.3.3.2 Provide Authorization	Estimated payable Financial coding Specimen signature documents Supporting documents	RCM	RCM	CF	EE, RCM( See table 7 Note A)	DFMS

5.3.2 Manage Commitments (Subprocess 3.3.4)

While the unencumbered balance is being confirmed, the responsibility centre manager or financial services records or updates commitments according to department-specific policy or procedures. Once the unencumbered balance and the appropriate commitment control have been confirmed, section 32 of the Financial Administration Act has been exercised. Figure 7 depicts the Level 3 process flow for Manage Commitments. 

5.3.2.1 Activities

As illustrated in Table 8, this subprocess applies to other operational payments, legal payments and periodic payments.

Table 6. Verify Unencumbered Balance (Subprocess 3.3.3) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Manage Commitments	Applies	Applies	Does not apply	Applies

The responsibility centre manager is accountable for ensuring that the commitment, including a continuing commitment that affects future fiscal years, is recorded according to department-specific policy or procedures. The commitment is recorded or updated by asset and materiel management services, financial services or the responsibility centre manager. Throughout the Manage Other Payments business process, the commitment is monitored and updated as needed—for example, when the estimated use or value changes (Activity 3.3.4.1 – Record or Update Commitments).

Following receipt of the final invoice, the commitment is updated and closed out (Activity 3.3.4.2 – Close Out Commitments). The end objective of Determine and Exercise Expenditure Initiation Authority (Subprocess 3.3.2) and the Control Commitments subprocess group is to ensure that all commitments are managed and that responsibility centre managers do not exceed their allocated budgets or appropriations. ^{See footnote [36]}

It may be impractical to record individual commitments for payments of low-dollar value. Departments can implement alternative means of accounting for these commitments, provided that their department-specific policy or procedures indicate when it is appropriate to do so and how these commitments are to be accounted for. ^{See footnote [37]} Commitments are recorded according to the department's approved budget and serve to quantify the financial implications of the planned requirements.

Further details about this subprocess are provided below for the payment categories to which it applies.

Other Operational Payments

• Commitments are recorded according to department-specific policies or procedures.

Legal Payments

• Commitments are recorded according to department-specific policies or procedures.

Periodic Payments

• For ongoing, multi-year agreements covering rent, utilities or telecommunications, commitments must be recorded annually. ^{See footnote [38]} Department-specific policies or procedures could identify financial services or asset and materiel management services as roles supporting the responsibility centre manager in updating the commitments.
• Commitments are updated throughout the year.
• When monitoring or updating an agreement, Manage Contracts (Subprocess 3.1.5) and Administer Contracts and Deliverables (Subprocess 3.1.6) of Manage Procure to Payment (Business Process 3.1) are launched.
• The department may choose to allocate centralized costs to different responsibility centres or sub-activities for usage-based invoices, either when the commitment is created or when the invoice is received during Manage Payables (Subprocess 3.3.5), according to department-specific policy or procedures.

5.3.2.2 Roles and Responsibilities

The responsibility centre manager is accountable for his or her commitments.

Table 9 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 9. Manage Commitments (Subprocess 3.3.4) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend AMS: asset and materiel management services DFMS: departmental financial and materiel management system FIN: financial services N/A: not applicable RCM: responsibility centre manager
3.3.4.1 Record or Update Commitments	Commitment authorization Estimated payable Financial coding Financial data (budget, commitments, actuals to date) Invoice or claim data	AMS, FIN, RCM	RCM	FIN	N/A	DFMS
3.3.4.2 Close Out Commitments	Commitment data Financial data (budget, commitments, actuals to date) Invoice or claim data	AMS, FIN, RCM	RCM	FIN	RCM	DFMS

This subprocess group involves handling invoices, claims, agreements, remittances or deduction requests; completing the account verification; and providing certification authority pursuant to section 34 of the Financial Administration Act (FAA). This subprocess group is the starting point for payments not impacting appropriations, which are paid out of the Consolidated Revenue Fund (CRF). Typically the responsibility centre manager performs account verification and provides certification pursuant to section 34 of the FAA. However, for some non-pay employee-related payments, these activities may also be performed by the compensation role or, for legal payments and payments not impacting appropriations, by financial services.

5.4.1 Manage Payables (Subprocess 3.3.5)

As illustrated in Table 10, this subprocess applies to all payment categories.

Table 10. Manage Payables (Subprocess 3.3.5) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Manage Payables	Applies	Applies	Applies	Applies

Upon receipt of invoices, claims, agreements, remittances or deduction requests and the required supporting documents, the following takes place:

• Account verification is performed;
• Certification authority pursuant to section 34 of the FAA is exercised by the responsibility centre manager; and
• A request for payment or settlement is prepared and sent to financial services.

Figure 8 depicts the Level 3 process flow for Manage Payables.

Manage Payables (Subprocess 3.3.5) involves receiving, verifying and validating invoices, claims, agreements, remittances or deduction requests and other supporting documents. The agreements and any documents supporting the receipt of goods or the provision of services form part of the account verification process.

Manage Payables begins when the invoices, claims, agreements, remittances or deduction requests are received by the program area or by financial services. At this time, the date of receipt is recorded; the date of receipt is a key element in calculating interest, which is further described in Perform Payment Authority (Subprocess 3.3.6).

Account verification provides the necessary evidence to demonstrate that:

• The work has been performed;
• The goods have been supplied or the services have been rendered;
• The relevant agreement terms and conditions have been met;
• The transaction is accurate; and
• All authorities have been complied with. ^{See footnote [39]}

Primary responsibility for verifying individual accounts rests with the responsibility centre manager, who has the authority to confirm and certify entitlement pursuant to section 34 of the FAA. ^{See footnote [40]} All payments and settlements must be certified pursuant to section 34 of the FAA. Note that all payments made out of the CRF are governed by section 26 of the FAA, which states that “no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament.” ^{See footnote [41]}

To ensure adequate separation of duties, the following functions are kept separate when responsibility is assigned to individuals involved in the expenditures process: ^{See footnote [42]}     

• Authority to enter into a contract (transaction authority): This activity is outside the scope of the Manage Other Payments business process and is performed during Manage Contracts (Subprocess 3.1.5) of Manage Procure to Payment (Business Process 3.1);
• Certification of the receipt of goods and the provision of services pursuant to section 34 of the FAA (certification authority): These activities are outside the scope of the Manage Other payments business process and are performed during Administer Contracts and Deliverables (Subprocess 3.1.6) of Manage Procure to Payment (Business Process 3.1);
• Determination of entitlement, verification of accounts, and preparation of requisitions for payment or settlement, pursuant to section 34 of the FAA (certification authority): These activities are performed during Manage Payables (Subprocess 3.3.5); and
• Certification of requisition for payment or settlement, pursuant to section 33 of the FAA (payment authority): This activity is conducted during Perform Payment Authority (Subprocess 3.3.6).

If the process or other circumstances do not allow such separation of duties, alternative control measures are implemented and documented.

Furthermore, Section 6.2.2 of the Directive on Delegation of Financial Authorities for Disbursements requires that persons with delegated authority do not exercise:

• Certification authority and payment authority on the same payment; and
• Spending, certification or payment authority for an expenditure from which they can directly or indirectly benefit—for example, when the payee is the individual with financial signing authority or when the expenditure is incurred for the benefit of that individual. ^{See footnote [43]}

Although account verification is normally performed prior to payment, completing account verification following payment is permitted in certain situations, such as acquisition card purchases, provided that the claim for payment is reasonable and meets the criteria outlined in the Directive on Account Verification. ^{See footnote [44]}

5.4.1.1 Activities

The Manage Payables subprocess involves the following activities ^{See footnote [45]} that support verification and certification pursuant to section 34 of the FAA:

• Verifying that the following are complete:
  • The supporting documents provide an audit trail and demonstrate the agreed price and other specifications, the receipt of goods or the provision of services, and authorization according to the delegation of signing authorities; and
  • The original document (for example, claim, legal document, invoice or advance payment form) requesting that a payment be made is complete (Activity 3.3.5.1 – Verify That Documentation Is Complete);
• Confirming that:
  • The terms and conditions of the contract or agreement have been met, including price, quantity and quality;
  • Work has been performed;
  • Goods have been supplied, services have been rendered, or evidence that a liability exists has been provided; and
  • The price is reasonable when, because of exceptional circumstances, the price is not specified in the contract or the agreement (Activity 3.3.5.3 – Confirm That Requirements Are Met);
• Confirming that the payee is entitled to, or eligible for, the payment. This confirmation includes verifying that the payee is appropriate, particularly for an assignment of the supplier's debt or for an alternate payee (Activity 3.3.5.4 – Confirm That Payee Is Eligible for Payment);
• Ensuring the reasonableness of the amount or price by validating with supporting documents. This validation may include a three-way match (Activity 3.3.5.5 – Ensure That Amount or Price Is Reasonable);
• Ensuring that the payee information is accurate and valid (Activity 3.3.5.6 – Ensure That Payee Information Is Accurate). The payee information should also be verified against the vendor master data file. If the payee information is not accurate and changes are required, Manage Vendor Master Data File (Business Process 7.1) explains how to make changes to the vendor master data file;
• Verifying that the financial coding is accurate and complete (Activity 3.3.5.7 – Verify That Financial Coding Is Correct);
• Verifying that all relevant statutes, regulations, Orders in Council, policies and directives, and other legal obligations have been complied with (Activity 3.3.5.8 – Verify That Relevant Regulations Were Followed). In addition to the policies identified in Section 3.3, “References,” there may be other policy instruments specific to the transaction that should be consulted; and
• Verifying that the transaction is accurate, including that the payment is not a duplicate; that discounts, credits or contract holdbacks have been deducted; that charges not payable have been removed; and that the invoice or the claim total has been calculated correctly(Activity 3.3.5.10 – Verify the Accuracy of Transaction).

The following activities also occur when certifying certain types of other payments:

• Obtaining a legal opinion or ensuring that it has been obtained, when required for settlements, ex gratia payments, and certain types of garnishments or claims against the Crown (Activity 3.3.5.2 – Obtain Legal Opinion). The Department of Justice Canada is responsible for the administration of garnishment summonses for family support and other obligations debts against public servants' salaries, in accordance with the Garnishment, Attachment and Pension Diversion Act. Summonses are served directly to the Department of Justice Canada, which validates and forwards these documents to departments for immediate action; ^{See footnote [46]}
• Ensuring that the commitment balance is sufficient to proceed with the payment for other operational, legal and periodic payments (Activity 3.3.5.9 – Verify That Balance is Sufficient). If the commitment balance is insufficient, the process flow returns to the Control Commitments subprocess group, to determine whether sufficient unencumbered funds are available (Verify Unencumbered Balance (Subprocess 3.3.3)) and to update the commitment as needed (Manage Commitments (Subprocess 3.3.4));
• Ensuring that the liability account balance is sufficient before proceeding with payments not impacting appropriations. If the balance is insufficient, then either the account balance or the payment amount is corrected;
• Ensuring that the responsibility centre manager follows the departmental procedures for determining and validating whether a payment to an employee is taxable for the purposes of the T4 Statement of Remuneration Paid; the T4A Statement of Pension, Retirement, Annuity, and Other Income; or equivalent, as well as notifying the compensation role of the determination, as required; and
• Ensuring that the responsibility centre manager follows the departmental procedures for other tax slips specific to periodic and other operational payments—for example, the T1204 Government Service Contract Payments form or equivalent.

Departments must ensure that suppliers are paid by the due date. Departments that fail to pay by the due date ^{See footnote [47]} must pay interest, without demand from the supplier, in accordance with the payment terms specified in the agreement. The Directive on Payment Requisitioning and Cheque Control does not allow a department to elect a minimum threshold for payment of interest. Certain payments, such as periodic payments, are paid according to a fee schedule or according to the terms of an agreement. ^{See footnote [48]} In addition, payments to employees are to be paid as soon as possible. ^{See footnote [49]} Information on determining the due date is available in the “Payment on Due Date” section of the Directive on Payment Requisitioning and Cheque Control.

The account verification activity performed for periodic payments (for example, rental agreements for shared equipment or taxi invoices) may include a reallocation exercise to attribute the costs to responsibility centres. The reallocation exercise should be based on an appropriate allocation strategy, using actual cost, average cost, or prorated costs by percentage. In these cases, the account verification process may be performed centrally or may be decentralized, and certification pursuant to section 34 of the FAA  may be obtained through the participation of various individuals in different responsibility centres, or of different levels in the organizational hierarchy.

If, at any time during the account verification process, a discrepancy is identified or if the information is incomplete, the responsibility centre manager resolves the discrepancy by tracing the issue to its source (Activity 3.3.5.11 – Resolve Discrepancies). Once the issue is resolved, the account verification resumes or starts over.

Once the supporting documents have been verified and any discrepancies have been resolved, the account verification is complete and certification authority is exercised pursuant to section 34 of the FAA (Activity 3.3.5.12 – Exercise Authority or Obtain Approval). Certification is usually provided through a signature block on the documentation or a completed account verification checklist. The final output of the Manage Payables subprocess is an approved request for payment.

Account verification pursuant to section 34 of the FAA ensures that there is auditable evidence of verification—that is, the individuals who performed the account verification are identified and there is an audit trail.

The following are examples of the types of documentation required for the four payment categories when verifying or exercising certification authority:

Other operational payments

• Accountable advances: An approved request for an accountable advance.
• Awards: The awards plan and the justification for recognition.
• Ex gratia payments: An agreement and a legal opinion.
• Honoraria: The approved agreement.
• Reimbursements: The claim for a reimbursement, including evidence of research and the justification for the selected vendor as well as evidence of the receipt of deliverables, if applicable.
• Repayable loans: The approved loan agreement.

Legal payments

• Grievances and recourse: A claim.
• Other settlements: A copy of the court or tribunal decision for legal payments and other obligations resulting from a legal decision.

Payments not impacting appropriations

• A remittance, for provincial sales taxes; a deduction request, for voluntary payments; or a garnishee summons. For holdbacks, the responsibility centre manager certifies that the conditions for releasing holdbacks have been met. Information on deduction payments, specifically garnishments, often includes sensitive data that should kept confidential. 

Periodic Payments

• Invoices from vendors—for example utility, telecommunication and taxi companies. When the payment is a fixed amount (for example, rent or a lease—a payment schedule outlining the payments for the year should be available; and
• Documentation supporting the receipt of goods or services—for example, signed taxi chit carbons or logs tracking usage.

5.4.1.2 Roles and Responsibilities

There are three scenarios depending on the roles responsible and accountable for the completion of the account verification and the certification of documents, pursuant to section 34 of the FAA:

• In the first scenario (S1), compensation performs account verification for non-pay employee payments, such as garnishments or other deductions.
• In the second scenario (S2), financial services performs account verification for legal payments and payments not impacting appropriations, such as remittances of taxes collected.
• In the third scenario (S3), the responsibility centre manager performs account verification.

Table 11 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 11. Manage Payables (Subprocess 3.3.5) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance COMP: compensation DFMS: departmental financial and materiel management system EE: employee FIN: financial services HR: other human resources management functions LS: legal services N/A: not applicable RCM: responsibility centre manager Return to Table 11 Note A: The authoritative source for most policy instruments is outside the DFMS.
3.3.5.1 Verify That Documentation Is Complete	Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, HR, RCM S2: CF, HR, RCM S3: CF, EE, FIN, HR	S1: FIN, RCM S2. RCM S3: FIN	S1: DFMS S2: DFMS S3: DFMS
3.3.5.2 Obtain Legal Opinion	Legal opinion Policy instruments Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, LS, RCM S2: CF, LS, RCM S3: CF, FIN, LS	S1: N/A S2: N/A S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.3 Confirm That Requirements Are Met	Legal opinion (if applicable) Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, HR, RCM S2: CF, HR, RCM S3: CF, HR, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.4 Confirm That Payee Is Eligible for Payment	Alternate payee data (if required) Payee data Supporting documents Vendor data	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, HR, RCM S2: CF, HR, RCM S3: CF, FIN, HR	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.5 Ensure That Amount or Price Is Reasonable	Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, HR, RCM S2: CF, HR, RCM S3: CF, HR, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.6 Ensure That Payee Information Is Accurate	Payee data Supporting documents Vendor data	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, RCM S2: CF, RCM S3: CF, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.7 Verify That Financial Coding Is Correct	Chart of accounts Cost allocation formula Financial coding Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, RCM S2: CF, RCM S3: CF, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.8 Verify That Relevant Regulations Were Followed	Evidence of FAA, section 34 certification Legal opinion Policy instruments( See table 11 Note A) Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, HR, RCM S2: CF, HR, RCM S3: CF, FIN, HR	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.9 Verify That Balance Is Sufficient	Financial coding Liability account or commitment balance Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, RCM S2: CF, RCM S3: CF, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.10 Verify the Accuracy of Transaction	Financial coding Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, RCM S2: CF, RCM S3: CF, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS
3.3.5.11 Resolve Discrepancies	Credit memo data (if applicable) Payee data Supporting documents	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, EE, FIN, HR S2: CF, EE, HR S3: CF, EE, FIN, HR	S1: FIN S2: N/A S3: FIN	S1: DFMS S2: DFMS S3: DFMS
3.3.5.12 Exercise Authority or Obtain Approval	Certification authority Delegation documents Evidence of expenditure initiation authority (if applicable) Evidence of transaction authority (if applicable)	S1: COMP S2: FIN S3: RCM	S1: COMP S2: FIN S3: RCM	S1: CF, FIN, RCM S2: CF, RCM S3: CF, FIN	S1: RCM S2: RCM S3: N/A	S1: DFMS S2: DFMS S3: DFMS

The Manage Payments subprocess group completes the Manage Other Payments business process and involves performing quality assurance activities when applicable, exercising payment authorization pursuant to section 33 of the Financial Administration Act (FAA), completing and submitting payment requisitions, and finalizing payments. 

In some cases, reimbursements can be disbursed through petty cash; this is further described in Appendix E. In other cases, an acquisition card may be used; acquisition card statements are processed as part of the alternate process flow for acquisition cards, as described in Appendix E of Manage Procure to Payment (Business Process 3.1).

5.5.1 Perform Payment Authority (Subprocess 3.3.6)

As illustrated in Table 12, this subprocess applies to all payment categories.

Table 12. Perform Payment Authority (Subprocess 3.3.6) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Perform Payment Authority	Applies	Applies	Applies	Applies

Perform Payment Authority starts with the receipt of a request for payment. Quality assurance is performed by financial services as part of payment authorization pursuant to section 33 of the FAA. Figure 9 depicts the Level 3 process flow for Perform Payment Authority.

5.5.1.1 Activities

The request for payment issuance is received by financial services (Activity 3.3.6.1 – Receive Request for Payment). The request for payment includes the justification; claim or invoice data; payment details (date invoice received, deliverables acceptance date, due date and amount payable); payee data; payment type (regular or priority payment); and financial coding block.

As part of this subprocess, the financial officer delegated payment authority pursuant to section 33 of the FAA performs quality assurance (Activity 3.3.6.2 – Perform Quality Assurance). The financial officer exercises payment authority and is responsible for certifying and ensuring that: ^{See footnote [50]}

• There is auditable evidence demonstrating that account verification has taken place and has been certified by an individual with delegated financial signing authority, pursuant to section 34 of the FAA;
• No payment is made when the payment:
  • Is not a lawful charge against the appropriation;
  • Will result in an expenditure exceeding the appropriation; or
  • Will result in an insufficient balance in the appropriation to meet the commitments charged against it;
• When exercising payment authority:
  • All high-risk transactions are subjected to a full review; and
  • A sample of medium- and low-risk transactions is selected, using a sample selection methodology, and the most important aspects of each transaction are reviewed; and
• Certification of payments pursuant to section 33 of the FAA is provided to the Receiver General (Standard Payment System). ^{See footnote [51]}

If a discrepancy is identified during this process, for example a duplicate payment, the payment request is returned to the responsibility centre manager for resolution.

The department is responsible for defining high, medium and low risks based on its risk tolerance. Manage Post-Payment Verification (Business Process 8.1) describes the process of applying the quality assurance requirements of section 33 of the FAA after the payment has been made, which includes the sampling of medium- and low-risk transactions. The financial officer is responsible for requesting corrective action when a critical error is identified during the quality assurance process for payment authority. ^{See footnote [52]}

The next activity is to determine whether interest is due on the invoice and to calculate interest as appropriate, in accordance with the Directive on Payment Requisitioning and Cheque Control, using the Bank of Canada interest rate in effect for the previous month plus 3 per cent ^{See footnote [53]}(Activity 3.3.6.3 – Calculate Interest).

When calculating interest on late payment of an invoice, the date to be used is the latest of the following:

1. The original invoice receipt date;
2. The supplier's invoice date (to be used as the default if (a) is not captured);
3. The deliverables acceptance date; or
4. The shipment date (to be used as the default if (c) is not captured).  

Under the Directive on Payment Requisitioning and Cheque Control, if parts of an invoice are in dispute, the parts that are not in dispute are to be paid within the due date period. ^{See footnote [54]} Departmental invoice business processes should have the capacity to split supplier invoices into disputed items and non-disputed items, and to have adequate duplicate payment controls that can identify true duplicate payments versus multiple payments on the same supplier invoice.

To ensure adequate separation of duties, the following functions are kept separate when responsibility is assigned to individuals involved in the expenditures process: ^{See footnote [55]}

• Authority to enter into a contract (transaction authority): This activity is outside the scope of the Manage Other Payments business process and is performed during Manage Contracts (Subprocess 3.1.5) of Manage Procure to Payment (Business Process 3.1);
• Certification of the receipt of goods and the provision of services pursuant to section 34 of the FAA (certification authority): These activities are outside the scope of  the Manage Other Payments business process and are performed during Administer Contracts and Deliverables (Subprocess 3.1.6) of Manage Procure to Payment (Business Process 3.1);
• Determination of entitlement, verification of accounts, and preparation of requisitions for payment or settlement pursuant to section 34 of the FAA (certification authority): These activities are performed during Manage Payables (Subprocess 3.3.5); and
• Certification of requisition for payment or settlement pursuant to section 33 of the FAA (payment authority): This activity is conducted during Perform Payment Authority (Subprocess 3.3.6).

If the process or other circumstances do not allow such separation of duties, alternative control measures are implemented and documented.

Furthermore, Section 6.2.2 of the Directive on Delegation of Financial Authorities for Disbursements requires that persons with delegated authority do not exercise:

• Certification authority and payment authority on the same payment; and
• Spending, certification or payment authority for an expenditure from which they can directly or indirectly benefit—for example, when the payee is the individual with financial signing authority or when the expenditure is incurred for the benefit of that individual. ^{See footnote [56]}

When the financial officer is satisfied that all requirements have been met, the payment requisition is certified pursuant to section 33 of the FAA and electronic authorization and authentication (EAA) is performed (Activity 3.3.6.4 – Exercise Authority Pursuant to FAA, section 33 (Includes EAA)).

The payment requisition is then prepared and submitted to the Receiver General (Activity 3.3.6.5 – Submit Payment Requisition to Receiver General) in accordance with the:

• Payments and Settlements Requisitioning Regulations, 1997;
• Directive on Payment Requisitioning and Cheque Control; and
• Receiver General Manual, Chapter 4 – “Standard Payment System and Departments.” 

The requisitions within the payment file contain full payment details: name, date, amount, delivery address, financial institution routing information, stub detail (if required), and the type of payment. Departments assign a unique requisition number to each batch of payments. ^{See footnote [57]}

The Receiver General Control Framework and the Receiver General Manual provide additional details and steps for ensuring that the payment requisition is properly submitted to the Receiver General. Authorized requisitions can be paid using various types of payments. When selecting the type of payment, there are many characteristics to consider. ^{See footnote [58]}

Table 13 provides the relevant references as well as key characteristics of the most common types of payments.

Table 13. Common Types of Payments

Type of payment	Receiver General Control Framework	Characteristics
Regular payment	Section 7.2	Payment file should contain full payment details
Priority payment	Section 7.8	Priority payment indicator Time-sensitive deadline Pre-registration of payee information Advance notice of payment due date Adequate internal controls over cheques
Direct deposit	Section 7.2	Payment coding Correct banking information Recognized vendor
Large value transaction system	Section 7.7	Pre-registration of payee information Advance notice of payment 48 hours before due date Due diligence for every payment

Further details about this subprocess are provided below for the payment categories to which it applies:

Other Operational Payments

• Accountable advances: Reimbursements made through petty cash and the reconciliation of petty cash are described in Appendix E.
• Reimbursements: Because reimbursements for hospitality are often considered high-risk transactions, quality assurance is performed as part of the certification process pursuant to section 33 of the FAA.

Legal Payments

• When exercising certification pursuant to section 33 of the FAA, the financial officer ensures that appropriate documentation is obtained from subject-matter experts in compensation or legal services.
• Because legal payments are often considered as high-risk transactions, quality assurance is performed as part of the certification process pursuant to section 33 of the FAA.

Payments Not Impacting Appropriations

• Because these payments are often certified pursuant to section 34 of the FAA by financial services or corporate finance, the individual who exercises certification pursuant to section 33 of the FAA cannot the same person who exercises certification pursuant to section 34 of the FAA. ^{See footnote [59]}
• Information on deduction payments, specifically garnishments, often includes sensitive data that should be kept confidential.

Periodic Payments

• For this payment category, the subprocess is conducted in the same way as Manage Procure to Payment (Business Process 3.1).

5.5.1.2 Roles and Responsibilities

Financial services is responsible and accountable for managing payment requisitions and certifying payments pursuant to section 33 of the FAA.

Table 14 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 14. Perform Payment Authority (Subprocess 3.3.6) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance COMP: compensation DFMS: departmental financial and materiel management system FIN: financial services N/A: not applicable RCM: responsibility centre manager RG-BCM: Receiver General – Banking and Cash Management Sector
3.3.6.1 Receive Request for Payment	Claim or invoice data Payee data Payment details	FIN	FIN	COMP, RCM	RCM	DFMS
3.3.6.2 Perform Quality Assurance	Agreement data Claim or invoice data Legal opinion (if applicable) Delegation document Evidence of provision of spending authority Payee data Payment details Policy instruments Quality assurance results Risk level Section 34 of the FAA verification and certification Specimen signature documents	FIN	FIN	CF, COMP, RCM	RCM	DFMS
3.3.6.3 Calculate Interest	Bank of Canada interest rate Claim or invoice data Date deliverables received (if applicable)	FIN	FIN	CF	RCM	DFMS
3.3.6.4 Exercise Authority Pursuant to FAA, section 33 (Includes EAA)	Appropriation balance Approved payment requisition Delegation documents Liability account balance Quality assurance results (if applicable) Section 33 certification (signature)	FIN	FIN	CF	N/A	DFMS
3.3.6.5 Submit Payment Requisition to Receiver General	Electronic authorization and authentication details (FAA, section 33 ) Payee data Payment details Payment requisition file	FIN	FIN	N/A	RG-BCM	DFMS

5.5.2 Issue Payment (Subprocess 3.3.7)

As illustrated in Table 15, this subprocess applies to all payment categories.

Table 15. Issue Payment (Subprocess 3.3.7) – Applicability by Payment Category

Subprocess	Other Operational Payments	Legal Payments	Payments Not Impacting Appropriations	Periodic Payments
Issue Payment	Applies	Applies	Applies	Applies

After payment authorization pursuant to section 33 of the FAA is exercised, the payment requisition is sent to the Receiver General for payment issuance. The payment requisition files are edited and validated, and the payments are released by the Receiver General. The Receiver General produces a generic return file containing unique payment references for control purposes. At this time, the payment records should be updated ^{See footnote [60]} in the departmental financial and materiel management system. Manage Other Payments (Business Process 3.3) ends, and Manage Post-Payment Verification (Business Process 8.1) or Manage Financial Close (Business Process 8.2) begins.

In the unlikely event that an overpayment or a duplicate payment is issued and cashed by the vendor, two options should be considered: obtaining a credit memo to be applied to future invoices within the current fiscal year (section 29.1 of the FAA ^{See footnote [61]}) or obtaining a refund from the vendor. The credit memo should be processed as described in Manage Procure to Payment (Business Process 3.1). The refund should be processed as a receipt, as described in Manage Revenue, Receivables and Receipts (Business Process 2.1).

Figure 10 depicts the Level 3 process flow for Issue Payment.

5.5.2.1 Activities

Public Works and Government Services Canada uses the Standard Payment System (SPS) to issue Receiver General payments in Canadian and foreign currencies (Activity 3.3.7.1 – Issue Payment) and to process interdepartmental settlements (IS); the latter is addressed in Manage Interdepartmental Settlements (Business Process 2.2). All program, accounts payable and compensation payments are issued by the Receiver General on behalf of federal departments and are drawn from the Consolidated Revenue Fund. ^{See footnote [62]} The SPS is an integrated system, with various components and menus that incorporate the entire payment and document process. ^{See footnote [63]}

The following summarizes the SPS payment processing steps. ^{See footnote [64]}

Edit and Verification: On receipt of the requisition and payment details, the SPS confirms the authenticity of the electronic signature on the requisition and then edits the input to ensure that the requisition and payment details match and show no signs of tampering.

Assignment of Payment Reference Numbers: Each edited payment is assigned a 12-digit payment reference number (PRN) prior to loading into the SPS database. Each PRN is linked to the SPS requisition number assigned by the department.

Notification to Departments: Departments receive notification by return file that their payments have been edited and loaded into the SPS. Departments record the payment details (PRN, payment date, etc.) in their own departmental financial management system for control and future reference purposes.

Online Enquiry and Updates: Returned payments are recorded in the SPS. Departments are responsible for handling returned payments and may request the cancellation or the issuance of duplicate payments through the SPS. The SPS allows enquiries at all points of the payment life cycle.

Post-payment processing, including cheque replacement and exceptions, is part of Manage Financial Close (Business Process 8.2).

Departments receive notification by return file that their payments have been released by the SPS. Departments process the return payment file (Activity 3.3.7.2 – Process Return Payment File) and subsequently finalize and record the payment details (PRN, payment date, etc.) in their departmental financial management system (Activity 3.3.7.3 – Finalize Payment). Manage Other Payments (Business Process 3.3) ends, and Manage Post-Payment Verification (Business Process 8.1) or Manage Financial Close (Business Process 8.2) begins, depending on whether quality assurance is performed.

Departments are required to regularly reconcile the payment requisitions submitted to the SPS with the payment return or notification file sent by the SPS. Departments are also required to regularly reconcile the control account balances in the departmental financial and materiel management system with the control account totals received daily from the Receiver General – General Ledger (RG-GL), based on control data received from the SPS. Control account balance reconciliation is part of Manage Financial Close (Business Process 8.2).

At this point in the process, all payments are treated the same by the Receiver General; there are no differences between the payment categories.

5.5.2.2 Roles and Responsibilities

Financial services are responsible for recording completed payments, and the Banking and Cash Management Sector of the Receiver General is responsible for issuing payments.

Table 16 provides an overview of roles and responsibilities, using the Responsible, Accountable, Consulted, and Informed (RACI) approach. These roles and responsibilities are further described in Appendix D.

Table 16. Issue Payment (Subprocess 3.3.7) – RACI

Activity	Related Data	Responsible	Accountable	Consulted	Informed	Authoritative Source
Legend CF: corporate finance COMP: compensation DFMS: departmental financial and materiel management system EE: employee FIN: financial services N/A: not applicable RCM: responsibility centre manager RG-BCM: Receiver General – Banking and Cash Management Sector RG-SPS: Receiver General – Standard Payment System
3.3.7.1 Issue Payment	Payment details Payment return file	BCM	RG-BCM	FIN	FIN	RG-SPS
3.3.7.2 Process Return Payment File	Payment return file Payment Reference Number Requisition number	FIN	FIN	RG-BCM	N/A	RG-SPS
3.3.7.3 Finalize Payment	Payment details Payment return file Payment Reference Number Requisition number	FIN	FIN	RG-BCM	EE, RCM	RG-SPS