CPPM Procedure Chapter D: Payment Processing
This chapter of the Core Policy and Procedures Manual describes procedure requirements that are supplementary to Chapter 4.3 on the authorization of expenses and post-payment review, and Chapter 6 on contract payments.
This chapter provides direction on travel direct billing, deputy minister car allowance, electronic fund transfers, and stop payment and replacement cheques.
- D.1 Expense Authority Certification
- D.2 Cheque Stub Printout
- D.3 Contract Payments
- D.4 Payments in US Dollars to Suppliers Located in the United States
- D.5 Payments to Other Foreign Suppliers
- D.6 Certification – Invoices and Other Supporting Documents
- D.7 Travel Charge Direct Billings
- D.8 Payments of Deputy Minister Car Allowance
- D.9 Electronic Deposit of Payments
- D.10 Cheque Management
- D.11 Batch Release
- D.12 Wire Transfer Payments
- D.13 Block Suppliers
- Further to policy CPPM 4.3.2, the expense authority may receive assistance from staff to fulfill his/her responsibilities. However, the expense authority is accountable for expenditure approval, and approval of payment requisitions for direct invoices (i.e., vendor invoices or items not matched to a purchase order or contract using iProcurement). Staff assistance includes:
- requisitioning, account coding, and receiving of goods and services;
- qualified receiver confirmation of goods and services received, agreement with support documentation, and completion of the electronic receipt (for an iProcurement invoice);
- checking accounts for correct amounts, noting the sales taxes charged, and that discounts and credits are taken, and the item was not previously paid;
- qualified receiver approval of the direct invoice (or coding sheet/equivalent); and
- filing support documentation and processing payments.
- The expense authority approval is evidenced by a written or electronic signature. All other methods of signing or certification (such as rubber signature stamps, adhesive slips, or mechanically produced signatures, etc.) are prohibited.
- Ministries shall ensure expense authorities are certain of their responsibilities when making the approval. For example, expense authorities should acknowledge (as part of signing the Expense Authority Specimen Signature Card), that they have read and understand the related financial policy and training bulletin (PDF). It is recommended that expense authorities review these areas at least once each year.
- The Corporate Compliance and Controls Monitoring Branch, Office of the Comptroller General may at times request verification that an expense authority has, in fact, been exercised in accordance with financial policy.
To ensure that the supplier receives adequate information to identify the payment, quote both the invoice number and account number where provided. In the absence of invoice and account numbers, quote the supplier's reference as indicated on the invoice (i.e., expenses incurred for the month of June 1998).
Quote invoice dates whenever this information may assist the supplier in identifying the payment. Where payment of a statement is acceptable, the statement date and account number should be quoted.
If an adjustment has been made to an amount payable, provide the reason for the adjustment (if the supplier has not already been notified).
Ministries may consider including their customer service contact and telephone number as part of the cheque stub information.
Ministries must ensure that a system is in place to provide the OCG with ready access to all contracts generated by that ministry.
Required Invoice Detail
Invoices for contracts must contain sufficient detail to be identified with the specific contracts. This will include information as per schedule "B" of the standard contract format. Suppliers are encouraged to use numbered invoices. Where a standard contract is not used, the invoice should, as a minimum, contain:
- the name of the ministry or agency;
- the name and address of the supplier, and Business Number (if registered);
- the date of the invoice;
- a description of the services provided;
- the rate of pay (by the hour, day, etc.);
- the dates and/or hours being charged;
- the sales tax charged (if registered);
- the total amount charged; and
- reference to the (non-standard) contract or agreement.
Note: Evidence of expenses incurred must be provided in support of expenses claimed. Documentation could include receipts/copies of receipts or itemized statements. Adequate controls in the ministry must be in place to prevent duplicate payments.
Expense Authority Responsibility
Expense authorities are responsible for ensuring that the invoice account verification procedures are carried out. Ministries shall use a contract summary or an equivalent record to administer and control invoice contract payments.
Contracts Without Invoices
Further to above, where the lease, rental, or other contractual agreement provides for a schedule of regular payments without invoices, expense authorities shall submit, in lieu of an invoice, an appropriate alternative supporting document with each payment request. This also applies to payments out of ministry bank accounts. Where expenditure agreements are subject to annual appropriations of funds, then the non-invoice payment terms must also be subject to the annual appropriation provisions.
Where a supplier elects to not send invoices after the original contractual agreement has been signed, and where the expense authority deems it not practicable to sign a formal contract addendum, the expense authority may submit, in lieu of a formal addendum, an appropriate alternative addendum document. For example, a copy of the supplier's notice of new payment terms, signed by an expense authority, will suffice. The expense authority shall submit an appropriate supporting document, in lieu of an invoice, with the first and with each subsequent payment request.
Ministries may not make such "non-invoice" payment arrangements for fee-for-service contracts, unless specifically approved by Office of the Comptroller General.
The supporting document(s) in lieu of invoices for "contracts without invoices" shall be:
- Contract Summary form (FIN 163) (PDF) (government access only) or
- a ministry designed "Non-Invoice Contract Summary" form.
If a ministry non-invoice contract summary form is being designed, ministries shall follow the requirements of forms management.
Pre-authorized payment plans, or any other methods, in which a supplier generated withdrawal form charges a Province of BC bank account, are not permitted. Only Provincial Treasury and Office of the Comptroller General may make such arrangements.
Post-dated cheques are not generally permitted. In certain circumstances a designated officer of Provincial Treasury or Office of the Comptroller General may approve such transaction arrangements.
Payments to suppliers located in the United States should be in US dollars, unless otherwise specified. For payments in US funds to suppliers located in foreign countries other than the US, refer to D.5.
Payments in US funds are made by cheque payment drawn on the Province of BC US General Account. Alternatively, the corporate purchasing card may be used for US fund purchases when expense authority pre-authorization has been obtained (subject to limitations outlined in the Purchase Card Manual, Chapter 6).
Note that a cheque issued on the Province of BC Canadian General Account cannot be cleared outside of Canada and should not be used to pay a supplier located outside the country. If such a supplier received a cheque, their banker would have to remit the cheque to the Province’s banker resulting in additional bank service fees, which may not be cost effective.
In addition, electronic fund transfer (EFT) or electronic deposit (D.9) cannot be used unless the US supplier has an account at a Canadian financial institution and the payment is to be made in Canadian dollars.
US General Account Payment Requests to US $50,000
To process US cheque payments up to $50,000 US and destined for a supplier located in the US, ministries will use the Bank of Canada’s Currency Converter USD-CAD daily rate, which is rounded to the nearest cent, to determine the CA$ equivalent. The daily rate is an indicative rate, derived from averages of transaction price quotes from financial institutions.
Payment requests need to be completed as follows:
- Enter the amount of the cheque requisition in US funds;
- Determine the Canadian dollar equivalent amount by use of the Bank of Canada's Currency Converter. Enter the cheque requisition US funds (amount a) as the "Amount", click on the "Reverse" button to indicate "From" the U.S. dollar amount, and then click on the "Convert" button to display the Canadian dollar equivalent.
US Cheque Payments of Transactions of US$ 50,001 to US$ 250,000
Note: Wire transfer is the preferred payment method for fund requests greater than $50,000 to US suppliers. The related bank fees are nominal compared to the potential cost of payments delayed or lost on route. Refer to D.12 for the use of wire transfer payments.
For US cheque payments of $50,001 to $250,000 US destined for a supplier located in the United States, ministries will use the Bank of Canada’s Currency Converter USD-CAD daily rate, which is rounded to nearest cent, to determine the CA$ equivalent.
US Payments of Transactions of US$ 250,001 to US$ 5,000,000
All US payments over $250,000 must be made by wire transfer (D.12). Treasury Payment Services, Provincial Treasury will provide the Canadian dollar equivalent, once the wire transfer has been confirmed by the Province’s banker, to process the payment.
US Payments over US$ 5,000,000
Ministries must notify Provincial Treasury, Cash Management, in advance for special arrangements to requisition large value US payments. Ministries should allow for up to 5 business days when requesting a US wire transfer payment of over $5,000,000.
Where a U.S. supplier’s invoice includes sales taxes, GST charged to the GST/HST Paid STOB 1575 and PST charges need to be adjusted for in the same way the payment request is completed above.
Note: For payments in US dollars to suppliers located in the U.S.A., refer to D.4.
Payments to suppliers located in other foreign countries can be requisitioned by wire transfer in that country's currency (e.g. Europe - Euro, Japan - Yen, etc.) or in Canadian dollars when specified by invoice. Some foreign currency may be restricted (not available outside of the foreign country, e.g. Chinese Renminbi) and payment of the foreign currency should be made converting to the Canadian dollar equivalent (refer to Exchange Rates, below).
Note that cheques issued on the Province of BC General Account cannot be cleared outside of Canada (except US General account cheques which can be cleared by some US banks), and should not be used to pay those suppliers located outside of Canada. If a foreign supplier did receive such a Province of BC General Account cheque, their banker would have to remit it to the Province’s banker resulting in additional bank service fees, which may not be cost effective.
In addition, electronic fund transfer (EFT) or electronic deposit (D.9) cannot be used unless the foreign supplier has an account at a Canadian financial institution and the payment is made in Canadian dollars.
Foreign Supplier Payments not exceeding $1,000 (Canadian Equivalent)
For small cost-effective payments to foreign suppliers, ministries should wherever possible:
- use the corporate purchasing card when expense authority pre-authorization has been obtained (subject to limitations outlined in the Purchase Card Manual, Chapter 6); or
- purchase a money order or draft using petty cash, up to the Canadian equivalent of the current petty cash limit, and where permissible (refer to CPPM B.2.3); or
- purchase a money order or draft using the CFO Bank Account for amounts up to the Canadian dollar equivalent of $1,000 (note the restrictions on use CPPM B.3.2.1).
Foreign Supplier Payments over $1,000 (Canadian Equivalent)
Where a payment to a foreign supplier is required that is greater than the Canadian equivalent of $1,000 ministries should request payment by wire transfer, which is a secure electronic and irrevocable method of payment. Refer to D.12 for the use of wire transfer payments to foreign suppliers.
For indication of the foreign exchange rate for conversion purposes (not the actual exchange rate used when the payment is issued), ministries can obtain the daily exchange rate from the Bank of Canada website.
When the corporate purchasing card is used, cardholders should estimate the total cost of the foreign currency funds in Canadian funds to avoid exceeding either cardholder limits or the expense authority approval limit. Note that the amount appearing on the purchasing card statement will be based on the exchange rate at the time the transaction is processed by the bank and may differ slightly from the estimated converted value.
When a money order is purchased, ministries need to contact the issuing bank for the exchange rate.
The exchange rate for a wire transfer payment will be provided to ministries by Treasury Payment Services, Provincial Treasury on request and the completion of the wire transfer by the Province’s banker. Refer to D.12 for wire transfer payments to foreign suppliers.
Where a foreign supplier’s invoice includes sales tax, GST charged to the GST/HST Paid STOB 1575 and PST charges need to be adjusted for the foreign exchange. The exchange rate will be the same one used to record the invoice in the ministry’s accounts.
Supporting documentation shall include: invoices, letters (memorandums) authorizing payments in specific amounts (i.e., for grant payments), Treasury Board approvals, petty cash replenishment reports, business expense approval forms, accountable advance applications, waybills (or equivalent), packing slips, etc.
- Where invoices are required by contract and/or by Treasury Board policies, ministries shall submit supporting invoices with the payment requests.
- Ministries must record the date of receipt of all invoices or other claims for payment (CPPM 4.3.8(2)). It must be clear that the date refers to the date the claim for payment was received and not the date of certification for contract performance or expense authority.
The Purchasing Card is the primary instrument for making small dollar value purchases. In lieu of using the card, an invoice may only be accepted from a merchant when:
- it is in government's best interest to deal with that merchant;
- the merchant is unwilling to accept the Purchasing Card; and
- the invoice is requested by the Cardholder and made out to the ministry.
Invoices/supporting documents shall contain the following information:
- the name, address and Business Number of the supplier (or recipient);
- the name of ministry and address where goods or services supplied;
- the date of the invoice (or other claim for payment); and
- a description of goods or services being charged to identify taxable supplies.
Invoices for goods shall show:
- a description of each item purchased,
- the cost per unit;
- the quantity purchased;
- the sales taxes charged (if there are one or more taxable supplies and one or more supplies to which taxes do not apply, the tax status of each must be disclosed);
- the total amount charged; and
- the number of the purchase order authorizing the sale.
Invoices for services shall show:
- a description of the services provided;
- the rate of pay (by the hour, day, etc.);
- the number of hours/days;
- the hours/dates being charged;
- the total amount of sales taxes (if there are one or more taxable supplies and one or more supplies to which taxes do not apply, the tax status of each must be disclosed);
- the total amount charged; and
- reference to a contract or agreement.
Note: Only current charges will be processed for payment in the normal manner; charges to old year in April require separate batching/grouping. An adding machine tape is required where there are multiple invoices.
Non-acceptable Invoices/Claims for Payment
The following documents are not to be used in lieu of a supporting invoice for initiating payment to a supplier:
- packing slips or waybills;
- work orders;
- counter slips (where an invoice is subsequently billed by the supplier);
- facsimiles and photocopies of invoices unless a thorough investigation has been carried out to ensure no previous payment and the copy is certified that it has not been previously passed for payment; or
Note: Exceptions to payment of a statement include those issued with original waybills or charge slips, and where the company does not issue an invoice.
Early Payment Discounts
The acceptable discount rate for early payments of invoices under the CPPM 4.3.8(8) is 2% or greater. (Note: An early payment discount is not required for early payment if the payment date is set by contract).
Early payment should only be taken provided the discount amount will exceed the cost of "fast tracking" the payment (approximately $12.50) plus the foregone interest (invoice amount X prime interest rate X [number of days remaining to the normal payment date divided by 365]).
The following travel charges may be billed directly by suppliers to ministries and paid on a payment request form:
- Air travel invoices (includes airline "quick tickets").
- Accommodation expenses incurred by ministers and parliamentary secretaries.
- Taxi company invoices:
- incurred by designated employees in "travel status", and
- incurred by employees "not in travel status" where ministries have made billing arrangements with taxi companies to charge for transportation within their headquarters' area location or geographical location, and
- Board and lodging expenses exempted by Treasury Board Regulation or Directive:
- incurred by ministries for employees, when not in travel status, assigned to temporary headquarters where board and lodging are arranged and supplied by the Employer in either Employer-operated camps or by means of local community services
The expense authority must ensure that:
- The person who travelled has been authorized to incur the expense;
- It is certified that services have been rendered (ministries will determine how this certification is done); and
- The direct billing is not being claimed on a travel voucher and has not been previously claimed on a payment request form.
Each deputy minister (and associate deputy minister), who does not have an automobile provided by the Government, is entitled to an annual allowance of $6,960 to defray the costs of using a personal vehicle for business purposes.
Canada Revenue Agency has determined that this allowance is taxable to the extent of that portion of the allowance that is not expended on business travel.
The full amount of the allowance must be included in the individual's taxable income and reported on the employee's T4 slip. The total amount is subject to payroll deductions of tax, CPP contributions and EI premiums.
When completing his or her individual income tax return, the employee can deduct the relevant expenses provided they are deductible under paragraph 8(1)(F) or 8(1)(H) of the Income Tax Act (Canada) and the employee files Form T2200, Declaration of Conditions of Employment.
The individual is responsible for submitting any offsetting claim for business automobile travel by personal vehicle when submitting a tax return. The offsetting claim for business use when submitting a tax return must be supported by receipts and a daily log of kilometres travelled for business purposes.
The ministry chief financial officer is responsible for preparing a letter authorizing payment for each deputy minister (and associate deputy minister) receiving a car allowance. Each letter of authorization is to be submitted to the payroll office for processing prior to the first bi-weekly or monthly payment. The chief financial officer is required to notify the payroll office to end payment when the deputy minister (or associate deputy minister) ceases employment.
STOB 5220 - Taxable Benefits has been added to the CHIPS Account Code Table effective July 9, 2000. Deputy minister car allowance payments are to be coded to this STOB. Enter STOB 5220 in the account code field on the payline.
Note: The vehicle distance allowance does not apply when a deputy minister or associate deputy minister elects to receive a vehicle allowance.
- D.9.1 Electronic Deposit of Payments to Supplier
- D.9.2 Returned / Rejected Electronic Deposits
- D.9.3 Recall of Electronic Deposits
Electronic deposit of payments to suppliers is the Province of B.C.'s preferred method of payment. Ministries should encourage general and employee suppliers to receive payment by electronic deposit:
- to reduce cost;
- to ensure the timely and secure delivery of payment; and
- to assist in meeting the Province's environmental initiatives (where electronic deposit is combined with receipt of payment statements by email)
- General suppliers may elect to receive electronic deposit of payments. Provincial government employees are required to receive reimbursement of expenses by electronic deposit.
- Note: an employee in receipt of business related funds, such as petty cash, can request these funds only not be by electronic deposit to a personal account. To process a cheque instead, ministry accounts payable staff need to change the pay group to GEN CHQ from GEN EFT.
- To provide electronic deposit of payments ministries need to ensure that:
- general and employee suppliers’ bank account data has been established in the Corporate Financial System (CFS) Supplier Maintenance database;
- payments are made in Canadian dollars; and
- the suppliers’ bank account is held at a financial institution within Canada.
- Direct Deposit Application form (FIN 312) (PDF) (government access only) completed by a General Supplier is used to request an update to the CFS Supplier Record.
- Employee suppliers’ bank account information is updated on the Employee Self Service application. The same bank account information used for payroll is used for reimbursement of expenses.
- Original signed forms need to be submitted for processing to minimize the potential for fraud and financial loss to the province.
- Ministries need to ensure that forms (or copies) are maintained and transferred in a secure manner to guard against any unauthorized release of personal information.
- Agency roles and responsibilities with respect to handling and processing the Direct Deposit Application form (FIN 312) are as follows:
- Ministry CAS Contacts (government access only) for Supplier Maintenance:
- for review, accuracy and authorization of the forms
- to provide the correct supplier # and site # the account information is to be added to
- to make any necessary CFS supplier record address updates, including adding email address if provided
- to make any necessary changes to the ministries financial system supplier record if required
- to submit forms to Provincial Treasury, Payment Services (TPS)
- Provincial Treasury, Payment Services (government access only):
- for review to ensure that banking information meets Canadian Payment Association (CPA) requirements, and to accurately enter and maintain the bank accounts in accordance with the authorized form
- responsible for the receipt, review and release of electronic payment files, excluding the specific payments/receipts data within those files
- for the maintenance of the CPA Bank/Transit file and providing updated CPA account validation edits
- to add bank account information to CFS Supplier record as requested
- to maintain, file & archive the original form and supporting documentation
- Ministry CAS Contacts (government access only) for Supplier Maintenance:
Periodically, electronic deposits cannot be made in line with the banking information on file, and are rejected and returned to the Province.
- Provincial Treasury Payment Services receives notification of returned electronic deposits and notifies the issuing ministry financial services' contact (by fax or email). The notification includes:
- payment detail information;
- reason for return; and
- confirmation that the banking information has been inactivated and voided in CAS Corporate Financial System (CFS).
- As required, ministries may issue a replacement payment by cheque following the process outlined in the CAS CFS AP User Manual, Chapter 6 (PDF) (government access only).
Ministries may require an electronic deposit to be recalled after the payment has been created and released to Provincial Treasury.
- Only an authorized ministry financial service representative can request Provincial Treasury to recall an electronic deposit by forwarding the request by email, and by providing the:
- reason for recall;
- CFS payment number;
- payee/supplier name;
- amount; and
- payment due date.
- Recall requests need to be received by Provincial Treasury not later than 10 am on the business day prior to the payment due date.
- Provincial Treasury confirmation of the recall will be forwarded to the ministry contact by returned payment notification once the payment has been returned and credited to the Province (generally the business day after due date).
- Please ensure email subject line indicates “Request for EFT Recall”, the payee/supplier name and due date.
Cheque Management is a key area of control for the provincial government. For cheque production, timely and systematic monitoring of cheque clearing and efficient administration of stop payments reduce the risk of financial loss due to fraud or error. Cheque Management in this section refers to the administration of cheque payments after issuance. The process is outlined in the following sub-sections:
- D.10.1 Cashed Cheque Records
- D.10.2 Stop Payment or Cancellation of Cheque Payments
- D.10.3 Issuance of Replacement Cheque Payments
- D.10.4 Returned Undelivered and Returned Undeliverable Unclaimed Cheque Payments
- D.10.5 Uncashed or Unclaimed Cheques
Agency and Ministry Roles and Responsibilities
Treasury Payment Services (TPS) (government access only):
- Maintains the Cheque Management System which records cashed cheque, stop payment/cancellation and returned undeliverable information for the following Province of BC cheque only issuance accounts:
- General – Canadian;
- General – US;
- Senior Supplement;
- Medical Services Plan; and
- Province of BC Payroll
- Responsible for receipt, review, accuracy and timeliness of the recording of:
- stop payment requests;
- cheques returned as undeliverable; and
- redirected cheques.
- Responsible for management of the:
- returned undeliverable aging process;
- cashed cheque data process;
- stop payment including return / reinstatement of cashed cheques;
- CAS Corporate Financial System (CFS) payment void process for cheques stopped or cancelled; and
- returned / reinstatement item process; and
- review, approval and co-ordination of Forged Endorsement/Intended Payee Not paid Claims, and Holder in due Course Claims.
Note: TPS deals directly with Contacts at Ministry Corporate Financial Service / Administration Branches*. Program areas forward cheque management requests through their appropriate ministry corporate financial service / administration branch contact (refer to the government directory or your ministry directory for contact information).
* excludes authorized high volume payment programs.
Ministry Corporate Financial Service / Administration Branches:
- Responsible to ensure that contacts are appropriate and authorized, and have online access to the Cheque Management System.
- Provide administration services for cheque issuance accounts held within the ministry (i.e. imprest, trust accounts).
- Accountable for the authorization and documentation of any internal ministry cheque management or administration processes.
Contacts at Ministry Corporate Financial Service / Administration Branches are responsible for:
- review, accuracy, authorization and records management of Stop Payment request forms and subsequent submission to TPS;
- collection, review, accuracy and records management of Indemnity forms completed by suppliers;
- management of any applicable processes relating to cancellation or replacement of a cheque payment submitted for stop payment;
- timely review of Return Undeliverable Cheque Management reports received, and for appropriate direction to TPS for the disposition of outstanding items; and
- communication and correspondence with ministry program contacts or suppliers.
The Province’s banker provides daily electronic cashed cheque information files to update the Cheque Management System (CHQ). Cashed cheque information is available online one business day after the cheque has been cashed by the supplier/payee. Online cashed cheque records are maintained for the current fiscal year and the last fiscal year.
- Cheque Enquiry
- Ministries need to ensure that their financial service / administrative contacts have online access to CHQ.
- When access is not available or where the cheque issue date is prior to the information available online, ministries need to submit a completed Cheque Enquiry/Stop Payment/Cancellation form (FIN 356) (PDF) (government access only) to TPS for cheque “Enquiry” only.
- Cashed Cheque Copy
Ministries need to provide the payee with the cash date of the cheque payment and request they review their bank records before requesting a cashed cheque copy. In all cases, ministries must only provide a cheque copy when the request is received in writing from the payee.
- TPS can provide digital image copies to authorized ministry contacts upon request by email using the Request for Cheque Copy form (FIN 243) (PDF) (government access only). The information on the cheque copy is subject to the provisions of the Freedom of Information Privacy & Protection Act and must only be provided to the payee as recorded on the issued cheque payment. Contact your ministry FOI office for direction and additional information when requested to provide a copy of a cashed cheque to any third party.
- Requests for cheque copies received from Canada Revenue Agency or law enforcement agencies must be redirected to TPS.
- Requests from internal ministry investigators, internal auditors and the Office of the Auditor General may be directed to TPS if the payment information is provided.
- Original cashed cheques will only be released to Crown prosecutors for restricted use in a court of law.
1. Ministry Requested Stop Payment or Cancellation of Cheque Payment
This is processed by submission of a completed Cheque Enquiry/Stop Payment/Cancellation form (FIN 356) (PDF) (government access only) to Treasury Payments Services (TPS).
Ministries need to:
- review TPS CHQ online or CAS CFS AP Payment Inquiry or Payment Overview** cheque information to determine the status of a cheque payment;
- when the issue date is prior to the information available in CAS CFS, forward a cheque enquiry to TPS;
- unless fraud or theft is suspected or the payee is not entitled to the payment, allow 10 business days after the issue date before requesting a stop payment;
- where a replacement payment is to be issued ensure that a completed Indemnity form (FIN 369A) (PDF) (government access only) for payments not exceeding $5,000 CAD, or Indemnity form (FIN 369) (PDF) (government access only) for payments that exceed $5,000 CAD) or original cancelled cheque is on hand before requesting a stop payment; and
- where a stop payment/cancellation only of a cheque payment is being requested ensure the payee is notified and request the original cheque be voided and returned or destroyed.
Instructions are available for completion of the above financial forms at the OCG Financial Forms site (government access only).
** Cleared status and Cleared Date information is available only on cheques issued from CAS CFS after 1 April 2003.
2. CAS Corporate Financial System (CFS) Payment Void Transaction
- TPS will void the original payment transaction in CAS Corporate Financial System (CFS) within 2 business days following the stop payment date
- Void transactions cannot be reversed
- Ministries need to refer to CAS CFS AP User Manual, Chapter 6.2.3 (PDF) (government access only) for additional information regarding void transactions.
3. Forged Endorsement / Named and Intended Payee Not Paid Claim
A recovery solution is available to recover funds where the ministry has determined the intended payee has not cashed or received value for a cheque payment, and a replacement cheque is to be issued.
- Forged Endorsement -- means an endorsement in the name of the payee that is not made by that person or by someone authorized to sign on that person's behalf, but does not include an endorsement in the name of a payee when the payee name on the face of the item has been altered without authorization.
- Intended Payee Not Paid -- means that the named and intended payee(s) of a payment item did not receive the funds, but does not include an item where the payee name on the face of the item has been altered without authorization.
- For detailed information, refer to Canadian Payments Association Rule A4.
- Initiation of a Forged Endorsement or Named and Intended Payee Not Paid Claim
- Where the intended payee has reviewed a copy of the cashed cheque payment and has determined that the endorsement is forged, and where the intended payee has not been paid or received value, a ministry may choose to request a forged / intended payee not paid claim.
- To do this, the issuing ministry has to provide all relevant cheque payment details and any correspondence from the payee, and forward the request to:
- Treasury Payment Services
PO Box 9414 Stn Prov Govt
Victoria, BC V8W 9V1
Fax: 250 953-0485
Email: FIN PT BCM CHQ
- Treasury Payment Services
- Claim Review – TPS
- Claims will not be initiated if:
- the cheque payment is less than $100;
- the claim is not submitted within 12 months of the cash date (with the exception of items over $5,000);
- the negotiating financial institution has confirmed that the cheque payment was deposited to an account in the name of the payee. (Note that if cheque payment has been issued with only an initial and surname, the claim will be rejected if the account is held by a person with the same surname).
The ministry contact will be notified of a claim rejection and with the reason for the rejection. Claims cannot be initiated when the cash date is more than 7 years after the cheque date.
- Claim initiation:
- TPS forwards the applicable declaration to the requesting ministry contact;
- the ministry is required to send the declaration to the payee to complete and sign in the presence of a Notary Public, a Canadian Law Enforcement Officer or a Commissioner for Taking Affidavits in the Province of BC;
- the completed declaration is to be returned to TPS (see address above) no later than 3 months from the date the claim was initiated;
- TPS will cancel the claim and notify the ministry contact if documents are not received within 5 months. A claim will not be re-opened if cancelled.
Refer to the Provincial Treasury Intranet (government access only) for more information on forged endorsement claims.
- Issuance of a Replacement Cheque Payment:
- TPS will return the original cashed cheque and declaration to the negotiating financial institution;
- the financial institution is permitted 10 business days to trace the cashed cheque and/or dispute the claim;
- TPS records a stop payment and voids the cheque payment in the CAS Corporate Financial System (CFS);
- once confirmation of credit has been received, TPS will notify the requesting ministry contact to initiate a replacement cheque.
- Claims will not be initiated if:
4. Lost in Clearing
All requests from financial institutions for items lost in the financial clearing system should be directed to the Manager, Treasury Payment Services for further instructions.
5. Holder in Due Course Claims
All requests from financial institutions or other cheque cashing agencies for holder in due course claims, under Section 55 of the Bills of Exchange Act, should be directed to TPS. TPS will review the claim and notify the ministry if reimbursement is required to be paid.
The initiating ministry is required to:
- reimburse the cashing agency;
- set up an account receivable (refer to CPPM 7); and
- recover the original payment from the payee
6. Handling of Cheque Payments (previously stop paid or cancelled)
Ministries periodically recover cheques that have been previously stop paid or cancelled. Do not deposit these cheques. Write Cancelled across the face of the cheques and file them with the stop payment documentation.
7. Province of BC Payroll
Requests for stop payment / cancellation / replacement with respect to Province of BC Payroll cheque payments should be directed to the Contact Centre Payroll & HR Systems.
Replacement cheque payments should only be issued if:
- the stop payment is confirmed. Online cheque enquiry in the Cheque Management System (CHQ) will confirm that the stop payment has been recorded;
- the original payment transaction is voided in the CAS Corporate Financial System (CFS). CAS payment enquiry will confirm that the void transaction has been completed; and
- a completed Indemnity form (FIN 369A) (PDF) (government access only) for payments not exceeding $5,000 CAD, or Indemnity form (FIN 369) (PDF) (government access only) for payments that exceed $5,000 CAD, or original cancelled cheque is on hand.
Refer to CAS CFS AP User Manual, Chapter 6 (PDF) (government access only) for replacement cheque process details. Where ministries have issued the replacement cheque using special handling code “X”, Treasury Payment Services (TPS) will record the replacement cheque information in CHQ.
Indemnity provides legal protection should the original cheque be cashed after a replacement has been issued. Its purpose is to indemnify the Province against the duplicate payment. By signing the indemnity, the payee is stating that he/she has either:
- never received, or
- received and subsequently lost the original cheque
and should it be found, it would not be presented for payment.
- Indemnity is not required if the original cheque has been returned to the ministry or Treasury Payment Services.
- For replacement of cheque payments not exceeding $5,000 CAD, use Indemnity form (FIN 369A) (PDF) (government access only).
- For replacement of cheque payments that exceed $5,000 CAD, use Indemnity form (FIN 369) (PDF) (government access only) available from Product Distribution.
2. Stale Dated Cheque Payments
Ministries should not hold any cheques issued by the Province that have been returned to them for any reason, or that cannot be forwarded to the payee. If the payee is not entitled to the cheque, it should be cancelled by Provincial Treasury using the Cheque Enquiry/Stop Payment/Replacement Requisition/Payment Cancel form (FIN 358) (PDF) (government access only). Where the payee cannot be located the ministry should return the item to TPS as Returned Undeliverable.
3. Replacement Cheques
Industry standard of a six-month stale date policy applies to all of the Province's accounts. Therefore, ministries will be required to issue replacement cheques for any stale dated cheques (i.e., over six months old).
Note: If the original cheque is available, it can be used in place of the Indemnity.
Province of BC Cheque payments that cannot be delivered by Canada Post are returned to Treasury Payment Services (TPS). TPS records each Returned Undeliverable cheque payment in the Cheque Management System (CHQ).
- Notification of Returned Cheques
TPS forwards a Returned Cheque Report (CHQ05) to the issuing ministry the business day after the cheque has been recorded in CHQ.
- Disposition of Returned Cheques
Ministries are responsible for determining the disposition of their undeliverable returned cheques. Ministries are asked to make every effort to check the accuracy of the payee address on the issued cheque payment. On the Returned Cheque Report there is a space provided for "Instructions for Disposition".
Note: Ministries can view the address on the issued cheque payment by viewing the payment information on the CAS Corporate Financial System (CFS).
- Remail to same address
If after contacting the payee, it is determined that the address on the cheque is correct, the instructions to Provincial Treasury will be "Remail to Same Address".
Note: Provincial Treasury will not remail to the same address more than once.
- Remail to new address
If, after contacting the payee, a new address has been obtained, the instructions to Provincial Treasury will be "Remail to New Address". Email instructions to TPS providing the cheque # and the full Canada Post mailing address including the payee name in a format that can be copied to a label application.
- Payment cancellation
If the ministry has determined that the payment is no longer valid or required, submit a Cheque Enquiry/Stop Payment/Cancellation form (FIN 356) (PDF) (government access only). Please indicate cheque is on hand at Treasury (Refer to D.10.2 for additional information on Stop Payment/Replacement process).
Note: the indemnity requirement (D.10.2(1)) is waived if issuing a replacement payment when the original cheque payment has “Transferred to Unclaimed” status.
- Remail to ministry
A ministry may request TPS to remail a returned cheque payment to the ministry if they determine that the cheque payment requires special handling to deliver the cheque to the payee.
- Remail to same address
- Returned Undeliverable – Posted / Transferred to Unclaimed
- Posted to Unclaimed - Status
If, after 30 days from the date a returned undeliverable cheque is entered into CHQ and, no action is taken by the issuing ministry, the status of the cheque is changed from on hand to “Posted to Unclaimed” and a report is sent to the ministry.
A second “Posted to Unclaimed” report is sent after 60 days. This is a reminder only that the cheque is still on hand, and if no ministry action is taken, the returned undeliverable cheque will be transferred to unclaimed status (i.e. 90 days after entry into CHQ).
- Transferred to Unclaimed - Status
If, after 60 calendar days from the date the returned undeliverable cheque status changed to “Posted to Unclaimed”, or 180 days from the cheque issue date, and no action is taken by the ministry, the cheque status will be changed to “Transferred to Unclaimed” and the original cheque will be destroyed. The ministry will receive a “Transferred to Unclaimed” status report and a cheque enquiry will display an “Unclaimed Cheque” record.
Note: once a cheque has been transferred to unclaimed status, TPS cannot remail the cheque to the payee.
- Cheques added to Unclaimed prior to March 31, 2012
If the added to file date on an unclaimed cheque record is prior to March 31, 2012, funds have been recovered to the CRF (refer to D.10.5). Any cheque added to unclaimed prior to March 31, 2012 cannot be cancelled or stop paid. If a replacement payment is required the ministry must issue a new payment from the current year appropriation.
- Posted to Unclaimed - Status
Treatment of over 1 year old (stale-dated) uncashed or unclaimed cheques
Effective April 2014, the OCG will run a quarterly report on government’s stale-dated cheques (uncashed or unclaimed after 1 year of the cheque issue date) and journal voucher those amounts to STOB 3003 AP Uncashed Cheques. All stale-dated cheques associated with each ministry will be allocated to their own ministry portion of the accounts payable liability account.
Ministries will have another year to review and determine whether further action is required on their uncashed or unclaimed cheques.
Treatment of over 2 year old outstanding or unclaimed cheques
The OCG will recover any cheque which remains uncashed or unclaimed for more the 2 years after cheque issue date to the consolidated revenue fund (CRF). Ministries will still be able to access recovered cheques by running reports from the CAS Data Warehouse.
If the vendor/supplier is requesting payment after the cheque has been recovered, it is the ministry’s responsibility to determine whether a valid obligation still exists and whether a new payment should now be issued to settle this obligation. The new payment will come out of the ministry’s current year appropriation.
Treatment of stale-dated cheques that are presented for payment
Despite the fact that the government uncashed or unclaimed cheques are recovered to the CRF after two years of issue date, government will continue to honour their payment in fairness to the payee.
Ministries are required to honour any requests submitted by a payee for the replacement of a stale-dated cheque provided (a) no stop pay was requested, and (b) they are bona-fide and verified to CAS CFS records to have never been paid. Where a replacement cheque is required, D.10.2 Stop Payment or Cancellation of Cheque Payments procedures must be followed. This general practice extends to uncashed or unclaimed cheques that are recovered.
Stale-dated cheques drawn on the government’s central accounts presented for payment by a financial institute will be returned as per Canadian Payment Association returned cheque guidelines.
In support of the above general practice, records of uncashed or unclaimed cheques and unclaimed accounts that are recovered to the CRF (after 2 years of cheque issue date), must be separately and securely maintained in a retrievable format to enable future payment enquiries.
Batch Release of payment is permitted for high volume transactions from program areas where Expense Authority and Qualified Receiver are not recorded electronically, or where legacy systems remain in use.
Ministry batch releasers do not have expense authority, but can be best positioned to ensure efficient and timely payment of transactions on behalf of an EA. The ministry chief financial officer has the responsibility to ensure that the financial control framework is preserved and the use of Batch Approval:
- is supported by appropriate procedures and compensating controls;
- is restricted to a limited number of users;
- will be for business processes that would otherwise require Force Approval or the use of an Administrative EA and will not circumvent iProcurement initiatives;
- provides segregation of incompatible duties; and
- includes supporting and verifiable EA and QR original documentation.
Wire transfer payment is a secure electronic payment method for the bank to bank transfer of funds. However, high transaction costs and service fees limit the use of wire transfer payments to large value, low volume, time sensitive, emergency, or foreign supplier payments where the mail system may be compromised.
Wire transfer payments:
- are irrevocable and provide suppliers immediate access to the funds after receipt;
- can be used for the same day delivery of funds to suppliers within Canada; and
- within 2 business days for foreign suppliers located outside of Canada.
Wire transfer payments within Canada should only be requested for time sensitive, emergency or large value payments when there is insufficient time for the supplier to be set up to receive payments by electronic funds transfer (e.g. less than 5 business days).
Wire transfer payments to foreign suppliers (located outside of Canada, including the US), should only be requested where use of the corporate purchasing card or money order is not possible or cost effective, and when a foreign currency payment greater than the Canadian equivalent of $1,000 is required. (For small payments to foreign suppliers, refer to D.5)
Ministry suppliers seeking payment by bank to bank wire transfer must provide ministries with complete routing instructions. If the supplier is unsure of the wire transfer routing instructions they should contact their financial institution (FI) to obtain routing instructions for wire transfers initiated from Canada and for the specific currency to be received.
Ministry Request for Wire Transfer
Ministries need to submit the applicable Request for Wire Transfer form (see below) and ensure that the completed form has been reviewed and signed by the appropriate expense authority. The expense authority is accountable for the accuracy and completeness of the wire transfer information provided on the form.
- a form may be rejected if the payment and routing information is incomplete, or the expense authority provided is not valid or appropriate;
- ministries are responsible for any costs resulting from the return of a wire transfer payment, these cost may include bank service fees and foreign exchange losses; and
- Treasury Payment Services will provide a confirmation notification once the wire transfer has been processed and confirmed by the Province’s banker.
Ministry Entry of Payment in CAS Corporate Financial System
Ministry wire transfer payment requests must be entered into CFS Accounts Payable using pay group ‘WIR GLP’ and special handling code ‘N’ (for detail refer to CAS CFS Accounts Payable User Documentation). This pay group is limited to entry of invoices for payment by wire transfer. Expense Authority approval is required to authorize WIR GLP entries.
Canadian Dollar Request for Payment to a Canadian Financial Institution
- Use the Request for Wire Transfer (To a Canadian Financial Institution) (FIN 130CDN) (PDF) available at the OCG financial forms site (government access only). The completed FIN 130CDN will be processed by Treasury Payment Services within 1 business day after the WIR GLP entry has been approved in CAS Accounts Payable.
Foreign Currency or Canadian Dollar Request for Payment to a Non-Canadian Financial Institution
- Request for Wire Transfer (To a non-Canadian Financial Institution) (FIN 130) (PDF) available at the OCG financial forms site (government access only). The completed FIN 130 will be processed by Treasury Payment Services (TPS).
- CAD $ - will be processed by Treasury Payment Services within 1 business day after the WIR GLP entry has been approved in CAS Accounts Payable.
- Foreign Currency - within 2 business days after receipt of the request.
- TPS will provide the ministry contact with the foreign exchange rate and the Canadian dollar equivalent amount, as applicable, once the wire transfer has been confirmed by the Province’s banker.
Ministries send completed Request for Wire Transfer forms to: Treasury Payment Services.
Fax: (250) 953-0485 or scanned to PDF by email to FIN Treasury Payment Services.
Block suppliers are created and used to make payments to multiple payees under a single supplier number. Block supplier names begin with a “Z” prefix and are generic in title.
When a block supplier is used for payment, the payee information is manually entered and only identified within the payment details. This introduces the following risks and limitations:
- payments made using a block supplier are not individually identified in the Public Accounts; therefore, full accounting by individual payee is not possible;
- increased risk of duplicate payments and incorrectly addressed cheques as some preventative controls are bypassed; and
- legally encumbered payments will not be automatically diverted by the CAS stop payment function. Failure to honour a legal garnishment order can result in the Province becoming financially and legally liable.
There are limited circumstances where the use of a block supplier number is appropriate and this includes instances where:
- privacy and/or confidentiality is required. Examples may include witness and victim services payments; and
- one-time payments of a similar nature are made to multiple payees, the payment amounts are not material and it is not feasible to set up each payee as a supplier. An example is the onetime Climate Action Dividend in 2008.
Submissions for approval to use a block supplier number must be made to the Comptroller General through the Financial Management Branch, OCG. Submissions must:
- fully describe why the payments cannot be made using CAS AP;
- cite the authority for privacy and/or confidentiality requirements;
- fully describe the nature of one-time payments;
- describe compensating controls in place to mitigate risks inherent with the use of a block supplier number;
- describe how information will be provided to 3CMB, OCG for legal encumbrance payment diversions;
- cite authority if payment diversions do not apply; and
- provide a date on which the need for the block supplier number will lapse.
The Comptroller General may time limit approval.
Ministries are responsible for only using block suppliers in appropriate circumstances and as approved by the Comptroller General1. Usage must be minimized, closely monitored and proper compensating controls must be in place.
1 Refer to these Guidelines (PDF) (government access only) to review payment processing alternatives and for information on the corporate financial architecture. The guidelines are also intended to support engagement between ministries and OCG.