Policy on Receipt and Control of Public Money

For questions or comments, please contact us: NC-CFOB-Financial_Policy_Questions_Politique_Financière-GD 

Revised: September 2013

Please Note: This policy/document is currently under review and is being updated to reflect new procedures and terminology associated with the implementation of myEMS (SAP)

Table of Contents:

  1. Policy Objective 
  2. Policy Statement 
  3. Application 
  4. Policy Requirements
  5. Roles and Responsibilities
  6. Monitoring and compliance 
  7. Definitions 
  8. References

    Appendix A: Electronic Forms 
    Appendix B: Guidelines for the Receipts of Counterfeit Bills 
    Appendix C: Questions and Answers 
    Part I: Acceptance of Cash 
    Part II: Acceptance of Cheques 
    Part III: Acceptance of Credit Cards 
    Part IV: Acceptance of Debit Cards 
    Part V: Acceptance of Foreign Currency 
    Part VI: Receipts 

 

1. Policy Objective

To ensure that all receipts of money is appropriately controlled, deposited and accounted for in an accurate and timely manner.

 

2. Policy Statement

It is departmental policy to ensure that all public money received is promptly deposited and accurately accounted for in order to prevent or reduce error, fraud or omission.

This policy must be read in conjunction with Treasury Board’s Directive on Receipt, Deposit and Recording of Money and applies to both Service Canada and Human Resources and Skills Development Canada (HRSDC).

 

3. Application

The legislative authority for the receipt and control of public money is contained in the Financial Administration Act (FAA).

Section 78 of the FAA states that "where, by reason of malfeasance or negligence by any person employed in collecting or receiving any public money, any sum of money is lost to Her Majesty, that person is accountable for the sum as if that person had collected and received it and it may be recovered from that person as if that person had collected and received it."

THIS ESTABLISHES THE RESPONSIBILITY FOR SAFEGUARDING FUNDS AND THE RESPONSIBILITY FOR LOSSES UNDER MALFEASANCE/NEGLIGENCE. 

Section 80 of the FAA requires that every person connected with the collection, management or disbursement of public money who has knowledge of a violation of the FAA, associated regulations or any revenue law or of fraud against Her Majesty must report it in writing to any superior officer.

THIS ESTABLISHES THE RESPONSIBILITY FOR REPORTING CONTRAVENTIONS. 

 

4. Policy Requirements

4.1 Generality

4.1.1 Ensuring that training has been provided as specified in the Treasury Board’s Policy on learning, Training and Development, and the Directive on the Administration of Required Training and that training has been provided in order to recognize counterfeit bills using Bank of Canada information packages and quick verification tools for employees receiving cash payments, which are all available on the Bank of Canada’s Web Site.

4.1.2 Employees whose responsibilities include accepting payments and/or opening and receiving mail containing public monies must be formally identified.

4.1.3 Only employees assigned to receive public money should accept cash or negotiable instruments.

4.1.4 Employees become responsible for money and negotiable instruments as soon as such monies are received from the client, either in person or receipt by mail.

4.2 Security & Safeguarding

4.2.1 In offices where money is received by mail, employees responsible for opening the mail (if other than cashiers) should be designated as having the responsibility for receiving public funds and should receive appropriate training.

4.2.2 Offices where money is received or stored shall ensure that secure storage facilities for the safekeeping of money are in place and approved by the proper security authority.

4.2.3 All money, including money awaiting deposit and security deposits received from contractors or received in respect of any debs, obligations or claim, is safeguarded at all times. The establishment of a follow-up system is necessary to ensure that post-dated cheques are always deposited on the date of the cheque or within appropriate time frames.

4.2.4 All documents/equipments relating to the use of credit cards must be kept in secure area location equipment when not in use.

4.2.5 At no time unprotected PANs are to be sent via end-user messaging technologies.
(Please contact National Accounts Receivable for further information)

4.2.6 Only authorized persons should have access to secure storage equipment.

4.2.7 A valid reliability status (previously known as enhanced reliability check) is the minimum security level requirement for all Government of Canada employees.

4.3 Control of Public Money

4.3.1 Only one authorized person at a time can be responsible for an individual cashbox. In situations where there are multiple authorized people receiving money, only one authorized person at a time can be responsible for each cashbox.

4.3.2 Transfer of control of money or cashboxes should not be done until such time as the money has been balanced and a transfer certificate has been completed and signed by the receiving employees. This policy applies even when an employee expects to transfer responsibility for money for a short period of time.

4.3.3 All receipts must be reconciled against category of payment prior to deposit or transportation of funds for deposit.

4.4 Payments

4.4.1 All payments made by clients must be accepted. Offices should make every effort to ensure that all methods of payments can be accommodated (some restrictions may apply depending on the service offered for example Scheduled Outreach Service). Offices should also be aware that accepting cash increases risk of loss and that it would be easier and less expensive to use debit.

4.4.2 Payments can be in the form of cash, cheques, debit/cash cards, drafts, traveler's cheques, bills of exchange, postal notes, money orders, postal remittances, Visa, MasterCard, Amex and any other legal form of payment (Note that Credit Card payments cannot be accepted for overpayments). Government cheques and warrens may also be accepted where it is the intention of the client to apply the cheque to an overpayment.

4.4.3 All cheques should be made payable to the Receiver General for Canada. However, if a cheque is not made out to the Receiver General, it should still be accepted if it is clear that the intention of the drawer is to have the cheque deposited to the credit of the Receiver General for Canada. For example, if the cheque is made out to "Human Resources" or "Canada Student Loans" the cheque should be accepted and deposited.

4.4.4 As soon as a negotiable instrument is received, it should be stamped by the appropriate stamp (see national guidelines receipt and deposit) "FOR DEPOSIT ONLY TO THE CREDIT OF THE RECEIVER GENERAL FOR CANADA".

4.4.5 Foreign currency cheques should only be accepted as payment towards existing debt and if the bank will accept deposits in that currency. Clients should be encouraged to pay in Canadian currency.  Clients must be informed that they are responsible for the cost of conversion and that the payment will be applied in Canadian currency.

4.5 Receipts

4.5.1 Official Receipts must be issued and are provided for every form of payments to all clients via Local Web Receipt System (LWR) except for post dated cheques which should not be the subject of receipts.

4.5.2 Payment in full should never be written on a receipt.

4.5.3 When an error is made on an official receipt form, the form must be voided and kept on file.

4.6 Shortages

4.6.1 Shortages must be reported to the appropriate manager/supervisor and financial services officer immediately.

4.6.2 A Cash Shortage Report must be completed when a shortage is discovered (suggestion of minimum 5 dollars).

4.6.3 All Shortages must be recorded in the departmental financial system as a separate line to Cashier's Shortage so that the net amount will equal the actual amount deposited, and the shortage must be reported as a debit.

4.7 Overages

4.7.1 All overages must be deposited to the credit of the Receiver General for Canada at the time of deposit.

4.7.2 Overages are recorded in the departmental financial system as Miscellaneous Revenue without completing a report.

4.7.3 If an overage is discovered it must be returned to the client if the client can be identified and can be located (suggestion of minimum 20 dollars).

4.8 Deposits

4.8.1 All money is deposited to the credit of the Receiver General for Canada in the Consolidated Revenue Fund (CRF) as soon as possible and within appropriate time frames.

4.8.2 Negotiable instruments and cash should be deposited at least once each banking day. If it is not cost effective to do so, negotiable instruments and cash should be deposited, at a minimum, once per week or when the amount reaches 500 dollars.

4.8.3 Negotiable instruments and cash should be transferred to the regional office responsible for making the deposits at least once each banking day. If it is not cost effective to do so, negotiable instruments and cash should be transferred, at a minimum, once per week or when the amount reaches 500 dollars. Receiving offices should deposit money each banking day where feasible, as per sub-section 3.8.2 of this policy.

4.8.4 Negotiable instruments and cash must be deposited with the Bank of Canada or one of its agencies, or with a branch of a recognized financial institution.

4.8.5 Deposits must be made at the financial institution where the office making a deposit has an authorization number (i.e., deposit facility).

4.8.6 A deposit slip for all negotiable items must be prepared.

4.9 Dishonoured Cheques or Other Chargebacks

In the case of a dishonoured payment (e.g., NSF cheques), the amount of the payment will be reversed, including appropriate interest or administrative charges where applicable.

4.10 Monitoring

The manager should regularly monitor sums of money received or waiting to be deposited and the frequency of deposits, as well as the receipt and deposit procedure at Service Canada Centers.

4.11 Record of Retention

4.11.1 All payment details must be entered into the departmental financial system.

4.11.2 Departments must obtain and retain documents related to deposits for audit purposes.  Detailed financial records are required to be maintained for a minimum period of six fiscal years.  Financial records include receipts provided by financial institutions at the time of the deposit, and public money transfer records.  Please refer to Retention Guidelines for Common Administrative Records of the Government of Canada for additional information on this topic.

4.11.3 Receipts of money must be recorded in the fiscal in the year in which they are received.

4.11.4 All modified documents must be retained for 6 years.

 

5 Roles and Responsibilities

5.1 Chief Financial Officer

5.1.1 The Chief Financial Officer must ensure that procedures for safeguarding and transporting sums of money meet the standards established and administered by the Chief Security Officer.

5.1.2 The Chief Financial Officer must ensure that there is a clear delineation of responsibilities for the handling of money and the transfer of funds.

5.2 Managers

5.2.1 Managers must be familiar with the legislative, policy, and procedural requirements with regard to the receipt and control of public money, in particular their liability for not instituting appropriate procedures with regard to the losses of public money.

5.2.2 Managers are responsible for ensuring that all employees who receive and/or account for public money have read and understood the relevant legislative authorities, policies, and procedures with regard to the handling, safeguarding and transfer of money.

5.2.3 Managers are responsible for formally identifying positions where handling and safeguarding funds is part of the work description.

5.2.4 Managers must ensure that employees who handle money receive appropriate training and the resources necessary to carry out their responsibilities to ensure accountability and prevent fraud.

5.2.5 The manager must ensure that there is a clear delineation of responsibilities and adequate separation of duties for the handling of money and the transfer of funds.

5.2.6 Managers must ensure that employees who handle money have a valid reliability/security status, a credit check, and sign a statement of responsibility.

5.3 Employees

5.3.1 Employees assigned as cashiers or who otherwise receive or handle money must be familiar with and understand their responsibilities under the Financial Administration Act (FAA), in particular, their responsibility for safeguarding funds and their accountability with regard to the losses of public money.

5.3.2 Employees who handle public money must have read and understood this policy, the associated procedures from the Departmental Receipt and Deposit National Directive; and they must sign a statement of responsibility.

5.4 Losses of Money or Official Receipts and Fraud

5.4.1 Employees are required to report losses of money, official envelope and the transaction record debit and credit to their manager/supervisor.

5.4.2 When losses of money or receipts occur, managers are to initiate an investigation in accordance with established procedures. For more information on this topic, managers should consult security personnel and refer to the Policy on Losses of Money and Illegal Acts against the Crown (DOC, 170 KB).

5.4.3 Employees who receive cash payments and who suspect receiving counterfeit money should follow the procedure as described in Appendix B.

 

6. Monitoring and Compliance

This policy and the achievement of expected results will be monitored in a variety of ways including but not limited to assessments under the Management Accountability Framework (MAF), examinations of Treasury Board submissions, Departmental Performance Reports, results of audits, evaluation and studies.

 

7. Definition

Term 

Definition 

Cash 

Coin or paper money

Cashier/Citizen Service Officer 

The employee responsible to receive money and to issue receipts in acknowledgment of such payments when required.

Defalcation 

The embezzlement or misappropriation of public funds by a public official.

Fraud 

The deliberate act of deception, manipulation or trickery, with the specific intent of gaining an unfair or dishonest advantage.  Is illegal and liable of conviction.

LWR  

Local Web Receipt System 

Malfeasance 

An unlawful act (i.e., the wrongful doing of an act that the doer has no right to do or that the doer is obligated not to do by contract, statute, regulation etc.).

Money 

All cash and negotiable Instruments

Negligence 

The failure to exercise the care that a prudent person usually exercises or to follow policies and procedures set by the department.

Negotiable Instrument  

All cheques, debit/cash cards, drafts, traveler’s cheques, bill of exchange, postal notes, money orders, postal remittances, credit cards and electronic funds transfers such as electronic data interchange, wire transfers, direct deposits and pre-authorized debits.

Nonfeasance 

Omission or failure to perform some distinct act, duty or undertaking that one is obliged to do or undertake.

PAN 

Unique payment card number (typically for credit or debit cards) that identifies the issuer and the particular cardholder account (Primary Account Number).

Receipt for Cash (Official) 

An acknowledgment of monies received via the LWR system

Receipt (General) 

An acknowledgement of payment, which can be an official receipt (via LWR), a cancelled cheque, a debit/credit card transaction slip.

Secure Storage 

Offices shall ensure that secure storage facilities for the safekeeping of money are in place.  The following constitutes secure storage equipment:

  • Safe
  • Locked Cash Register Drawer
  • Safety Deposit Box
  • Anti-Holdup Drop Safe in safe location
  • Filing Cabinet equipped with a bar and approved padlock

(In the security equipment guide, RCMP recommends using the ULC ratings for safes for negotiable)
Minimum requirements are a filling cabinet with locking bar and hasp, and an approved padlock.  If such facilities do not exist, you should contact the responsible security officer.



8. Reference

For more detailed information concerning the subjects covered in this policy, please refer to the following:

Legislation and Regulations

Treasury Board Directives and Policy

Departmental Financial Policies and Directives

Departmental Manuals

Receiver General Directives

Other References

 

Appendix A: Electronic Forms

List of electronic forms available from Government of Canada E-Forms Web site 

 

Appendix B: Guidelines for the Receipt of Counterfeit Bills

If you suspect a bill is counterfeit, do not use it. Take it to your local police for verification. It is illegal to knowingly use a counterfeit bill or to keep one without a lawful reason.

If you work with customers:

 

Appendix C: Questions and Answers

I - Acceptance of Cash

When accepting cash, add up the amount received in the presence of the client. Always count the change twice before giving it to the client to ensure the amount is correct, then place the money in the secure storage facility until deposit.

Can $50 and $100 bills be accepted?

YES. However, bills larger than $100 should not be accepted.

Do I have to accept payments in small change?

YES, but you can refuse if it exceeds the following:

  • Pennies up to 25 cents
  • Nickels up to $5
  • A combination of pennies and other coinage up to $10

Why do I have to issue a receipt for cash?

Unless a receipt is issued, the client has no record of payment and the federal government has no record of the payment.

ll - Acceptance of Cheques

Shouldn't I issue a receipt for a payment by cheque?

The Local Web Receipt System (LWR) will issue receipts for all payments, including cheques. The LWR will issue a receipt specifically designed for a payment by cheque.

Can stale-dated cheques (more than six months old) be Deposited?

NO. The cheque should be returned to the drawer with an explanatory note. Certified cheques, money orders, bank drafts and government cheque can be deposited regardless of the date. The government cheque is never outdated.

Can I add the missing information on a check?

If the date is missing: Instructed by the payer, insert the current date.

If it is Stale-dated (over 6 months old): Return to payer with explanation. Certified cheques, money orders and bank drafts can be deposited regardless of the date.

If there is no signature: Return to payer with explanation.

If the payee is missing: Insert "Receiver General for Canada"

If the payee is misspelt or incorrect, ex. the Department: Endorse "For Deposit to Credit of the Receiver General for Canada" on back and deposit.

If either the written or the numeric amount is missing: Insert the missing amount.

If both amounts are missing: Insert both amounts based on the instructions received from the payer. If no instructions can be obtained, return the item with explanation.

If the amounts differ: Use the written amount as the amount to deposit.

The information on a cheque must never be altered.

To whom should the cheque be made to?

All cheques should be made payable to the Receiver general for Canada, but should be accepted if it is clear that the intention was that it be deposited to the credit of the Receiver General for Canada. (For example if made out to "Human Resources Development" or "Canada Student Loans"). (Réf. section 4.4.3)

Can I accept a Government Cheque?

Yes, Government of Canada cheques (including E.I Warrants) may be deposited if the cheque has been endorsed and it is clearly the client's intention to make payment to the credit of the Receiver General for Canada.

lll - Acceptance of Credit Cards

How will I know if a credit card is valid?

Check for the following indicators:

  • The card has not expired;
  • The card has been signed;

Can I accept a credit card that is not presented by its holder?

NO. Only the holder of the card may use it.

Can I accept a Visa, MasterCard, or Amex from any financial institution?

YES, as long as the Visa or MasterCard symbols are on the card and the card is valid. (Note: temporary credit cards are not accepted).

Must I ask for other identification when a credit card is used?

NO, except when you have doubts about the identity of the cardholder, then you may request to see other identification such as a driver's license or other identification, and you should call the authorization center.

Do I need phone authorization for the acceptance of credit cards?

Authorization is only required in cases where electronic authorization machines are not available.

What information does the authorization centre need?

When authorization is necessary, the following information should be provided:

  • The name of the cardholder and his/her card number;
  • The department's member number (i.e. the number on the merchant deposit card);
  • The total amount of payment being made;
  • The effective and/or expiry date of the card.

Is the expiry date shown on the credit card the beginning or the end of the month?

The expiry date on the card is the end of the month.

When a client wants to cancel a transaction, can I refund a client with cash when a credit card was used to make a payment?

NO. All payments by credit cards are never refunded. They can only be cancelled or reversed. The transaction (reverse) must be on the same day and on the same credit card.

What must I do if the client forgets his/her credit card?

Place the card in secure storage. Telephone the cardholder and advise them that you still have the credit card. If you cannot contact the client and if the card is not reclaimed within 24 hours, cut the card in half lengthwise and return it to the financial institution which issued the card.

lV - Acceptance of Debit Cards

When a client wants to cancel a transaction, can I refund a client with cash when a debit card was used to make the payment?

The debit transaction can be reversed, and a transaction slip is produced, which shows the reversal.

V - Acceptance of Foreign Currency

Can I charge the amount in foreign currency to the credit card?

NO. All credit card payments must be recorded in Canadian dollars on the sales draft/slip. The credit card company will calculate the conversion and report the charge on the client's statement in the appropriate currency.

What foreign currencies are acceptable in Canada?

Most foreign currencies are accepted only as payment towards an existing debt, but we should strongly encourage clients to pay in Canadian currency. The client must understand that he will have to assume the cost of conversion and that the amount applied will be in Canadian currency. If in doubt, verify with your financial institution that they will accept a deposit of a particular currency.

VI - Receipts

What name must be entered on the receipt?

The name of the person making the payment must always be entered on the receipt, regardless of whether the person making the payment is the debtor or not.