Treasury Board of Canada Secretariat
Comptrollership Policy on Pay Administration
Comptrollership Policy on Pay Administration
(Publié aussi en français sous le titre Politique sur l’administration de la paye)
Table of Contents
1. Effective date
1
2. Policy objective
1
3. Policy statement
1
4. Application
1
5. Policy requirements
1
6. Monitoring
2
7. References
2
7.1 Legislation
2
7.2 Treasury Board Secretariat Publications
2
8. Enquiries
3
Appendix A - Guidelines
5
1. General
5
2. Departure procedures
5
3. Secondment and interchange agreements
6
4. Emergency salary advances
6
5. Garnishment of salaries and wages
6
6. T4-A's for Taxable Benefits
7
7. Workers' Compensation
8
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Comptrollership Policy on Pay Administration
Appendix B - Delegation of financial authorities to human resources
personnel - Elements of a control framework
9
1. General
9
2. Major principles and policy elements - Section 34 of the FAA
9
3. Responsibilities - Section 33 of the FAA
10
4. Responsibilities - Section 34 of the FAA
10
5. Other
11
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Comptrollership Policy on Pay Administration
1.
Effective date
This document contains the entire text of the revised policy that became effective
April 1, 1997. This policy supersedes section 9.15, “Role and Responsibilities of
Financial Officers in Pay Administration and Payroll Matters”, of the Guide on
Financial Administration, consolidated revision, April 1991.
2.
Policy objective
To ensure that adequate controls are established and implemented for financial pay
transactions, and to ensure the efficiency and effectiveness of the pay process within
the framework of departmental financial management.
3.
Policy statement
It is government policy to maintain an efficient and effective pay administration in a
manner that ensures its probity.
4.
Application
This policy applies to all organizations considered to be departments within the
meaning of section 2 of the Financial Administration Act (FAA).
5.
Policy requirements
Departments must establish policies and procedures to ensure that:
–
adequate financial controls are designed and implemented as part of
the departmental pay process;
–
the senior financial officer in conjunction with senior human
resources management develops efficient and effective accounting
procedures to ensure that all pay input documents meet the requirements
of the policy on account verification relating to sections 33 and 34 of the
FAA and the requirements of the Payment Requisitioning Regulations;
–
missing or delayed direct pay deposits are handled in accordance
with the Direct Deposit Regulations and not by means of emergency salary
advances;
–
proper accounting records are maintained and T4-A Supplementary
forms are issued for the amounts paid to individuals who are hired locally
within Canada and to Canadians who reside outside Canada and perform
local services for the government, who are not paid through Public Works
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Comptrollership Policy on Pay Administration
and Government Services Canada pay offices;
–
appropriate and accurate records of payments and taxable benefits
are maintained for employees in order to meet the reporting requirements
of the Income Tax Act and provincial income tax acts; and
–
the elements of the control framework found in Appendix B are
adhered to where financial authorities for section 33 of the FAA are
delegated to human resources personnel.
6.
Monitoring
(a)
Departments should conduct periodic reviews and audits of their compliance
with this policy.
(b)
Treasury Board of Canada, Secretariat will monitor the effectiveness of this
policy by reviewing departmental internal audit reports.
(c)
Performance indicators should relate primarily to the accuracy, effectiveness
and efficiency of the processes for handling and recording pay-related transactions.
7.
References
7.1
Legislation
–
Financial Administration Act (R.S.C., 1985, Chapter F-11) sections 32,
33 and 34
–
Payment Requisitioning Regulations, SOR/85-999, as amended by
SOR/86-68, 93-258 and 96-135
–
Direct Deposit Regulations, SOR/84-974, as amended by SOR/85-222,
85-1000, 86-732, 93-179 and 94-402
–
Accountable Advance Regulations, SOR/86-438, as amended by
SOR/93-258, s. 2(f)
7.2
Treasury Board of Canada, Secretariat Publications
Human Resource Management
Compensation
–
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Additions to Basic Pay
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Comptrollership Policy on Pay Administration
–
Recovery of Amounts Due to the Crown
–
Deductions from Pay
–
Pay Administration — General
Insurance and Related Benefits
–
Workers’ Compensation
–
Injury-on-Duty Leave
Employee Entitlements
–
Relocation Directive
–
Special Relocation Authorities
Comptrollership
–
Account Verification (Policy)
–
Policy on Receivables Management
–
Policy on Delegation of Authority
The above publications are available in electronic format on the TBS Web site on the
Government Enterprise Network (GENet), the federal government internal network,
at the following address:
http://publiservice.tbs-sct.gc.ca/
They are also available on the TBS Web site on the Internet at the following address:
http://www.tbs-sct.gc.ca/
8.
Enquiries
Enquiries concerning this policy should be directed to your departmental
headquarters. For interpretation of this policy, headquarters may contact the
following office:
Financial and Contract Management Sector
Deputy Comptroller General Branch
Treasury Board of Canada, Secretariat
Ottawa, Ontario
K1A 0R5
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Comptrollership Policy on Pay Administration
Telephone: (613) 957-7233
Facsimile: (613) 952-9613
Email:
Internet: DCG-SCGInformation@tbs-sct.gc.ca
X400: c=ca; a=govmt.canada; p=gc+TBS.SCT; s=DCG-SCGInformation
For enquiries concerning human resources issues, headquarters may also contact the
following office:
Labour Relations and Human Resources Management Division
Human Resources Branch
Treasury Board of Canada, Secretariat
Ottawa, Ontario
K1A 0R5
Telephone: (613) 952-3206
Facsimile: (613) 952-3009
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Comptrollership Policy on Pay Administration
Appendix A
Guidelines on Pay Administration
1.
General
Departments should ensure that:
–
control over the custody and distribution of cheques and direct
deposit payment statements is performed by a person who does not have
signing authority in the areas of staffing, classification, compensation
administration, staffing transactions or pay input transactions;
–
the person who is responsible for cheque and direct deposit payment
statement distribution must, for this purpose, take functional direction from
the senior financial officer;
–
where it is impractical to record commitments for salaries and wages
on an individual basis, departmental procedures provide alternative means
of taking the impact of these commitments into account (for example,
departments may control commitments by using the average salary for a
category multiplied by the total number of positions for that category, and
adjusting for the effect of major collective bargaining agreements); and
–
the verification of pay input data by the financial organization does
not duplicate the work already performed by human resources personnel.
It should, however, consist of a thorough verification of those areas within
the scope of financial responsibilities and those aspects which are required
for financial control.
2.
Departure procedures
(a)
To minimize the possibility of an employee leaving the federal Public Service
owing money or any other material (e.g. outstanding accountable advances such as
travel advances, standing advances, emergency salary advances, petty cash funds,
change floats, etc.; acquisition cards; travel cards; identity cards; overdrawn leave;
and equipment, tools, manuals, etc. on loan), departments should establish a
departure report and checklist that would require specific organizations such as
human resources, security, materiel management, administration, library and
financial services to sign off before the final payment to the employee is released.
(b)
Financial organizations should always sign off last to ensure that all other
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areas have been cleared and that no money is owed to her Majesty: only then
should the final payment be released. If authority under section 33 of the FAA has
been delegated outside the line authority of the senior financial officer, the
organizations to which that authority has been delegated should be the last to sign
off.
3.
Secondment and interchange agreements
(a)
Internal procedures and proper records must be established and maintained
for secondment and interchange agreements to ensure that recovery as indicated in
respective agreements is carried out.
(b)
When an employee is seconded to another government department, the
agreement may provide for salary expenses, including the department's share of
benefits, to be reimbursed by the host department (since the employee remains on
the payroll of the home department). Similarly, non-public servants, or provincial
or municipal public servants assigned to the Public Service will continue to be paid by
their usual employer. These employers will recover the salary from the department
to which the individuals have been assigned. Any difference in salary is the
responsibility of the individuals’ usual employers.
(c)
If the amount that the host organization is prepared to pay is less than the
salary being paid to the employee, the home department absorbs the difference.
4.
Emergency salary advances
Departments are responsible for taking immediate action to requisition an
emergency salary advance whenever a regular salary cheque payment is not available
to the employee on the due date. For more information, Pay Administration —
General, published by Treasury Board of Canada, Secretariat, and the Accountable
Advance Regulations.
5.
Garnishment of salaries and wages
(a)
Amendments to the Garnishment, Attachment and Pension Diversion Act,
were proclaimed on February 19, 1997 and came into effect on May 1, 1997.
(b)
Part I of the Garnishment, Attachment and Pension Diversion Act permits
creditors and others to garnishee salaries and other remuneration paid to
government employees, as well as money owned to individuals employed under
contracts for services.
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(c)
Departments are required to designate positions whose incumbents are the
Garnishee Contact as the initial point of contact for all garnishee summons. Upon
receipt of a summons, the Garnishee Contact should immediately determine
whether:
–
the individual subject to garnishment is an employee of the
department, agency or departmental corporation; or
–
the individual is working under contract.
(d)
Departments should ensure that when a Crown debt has been assigned or a
power of attorney or garnishment order is in effect, payment is made to the
assignee, attorney, or judgement creditor as the case may be.
(e)
Departments are required to place garnisheed money in the hands of the
court or the office indicated in the garnishee summons:
–
salary (employees), within 15 calendar days after the last day of the
pay period in which they are withheld;
–
other remuneration, including fees, honoraria, etc. (contractors),
within 15 calendar days after they are garnisheed.
(f)
Financial officers should be familiar with procedures for garnishment of
salaries. These procedures are contained in Deductions from Pay, published by
Treasury Board of Canada, Secretariat.
(g)
Financial officers should also be familiar with the procedures to garnish public
servants' salaries when the garnishment cannot be accomplished by payroll
deduction within the required time frame, or when a one-time payment is involved.
In addition, financial officers should be knowledgeable about garnishment of money
due to a person hired through a personal services contract, as well as procedures to
remit the garnisheed amount to the court. These procedures are contained in the
relevant Receiver General Directive.
(h)
Individuals involved with the administration of the garnishment legislation
should be familiar with the Act, its regulations, and the procedures contained in
Deductions from Pay, published by Treasury Board of Canada, Secretariat.
6.
T4-A's for Taxable Benefits
(a)
Refer to Additions to Basic Pay, published by Treasury Board of Canada,
Secretariat, for amounts to be included in T4-A’s.
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(b)
Financial organizations in departments must ensure adequate record-keeping
to meet the requirements for the preparation of T4-A's. This includes maintenance of
proper accounting records to ensure that a T4-A Supplementary is issued to the
employee for taxable benefits on or before the last day of February.
7.
Workers' Compensation
(a)
Where an employee has been injured and is receiving full salary during the
pre-determined period as established by the employer, any other salary replacement
from other sources, such as a workers' compensation board, must be repaid to the
Receiver General. However, such money does not have to be repaid, when the
salary replacement stems from a personal disability policy for which the employee or
the employee’s agent has paid the premium. Revenue Canada has ruled that
employment-injury benefits received from the Workers' Compensation Board to be
non-taxable.
(b)
For additional information concerning workers' compensation and injury on
duty leave departments should consult Workers’ Compensation and Injury-on-Duty
Leave, published by Treasury Board of Canada, Secretariat.
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Appendix B
Delegation of financial authorities to human resources
personnel — Elements of a control framework
1.
General
(a)
The wording of sections 34 and 33 of the FAA allows organizations to delegate
these authorities to persons outside the finance organization. As long as the
minister designates the person in writing, that person can exercise these authorities
on the minister’s behalf.
(b)
Ministers and deputy heads must delegate and communicate financial
authorities in a manner and form that provide controls on the disbursement of public
money by adequately enforcing an appropriate division of responsibilities.
(c)
Departments must establish policies and procedures to ensure an adequate
level of control over delegated authorities exists and that persons with delegated
authorities understand their responsibilities.
(d)
Only persons to whom these authorities have been formally delegated may
exercise such authorities.
(e)
The process must ensure that delegated authorities are authenticated before
the transaction is processed further.
(f)
Authorities must be delegated to the incumbents of positions identified by
title, and not to individuals identified by name.
(g)
No person may exercise the authorities delegated to a position unless an
officer to whom the incumbent of the position reports has properly designated the
person to act.
(h)
Officers with delegated authority cannot redelegate that authority.
2.
Major principles and policy elements — Section 34 of the FAA
(a)
All transactions affecting the Consolidated Revenue Fund (i.e., payment
transactions) must be verified and certified under section 34 of the FAA.
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(b)
Primary responsibility for verifying individual accounts rests with officers who
have the authority to confirm and certify entitlement under section 34 of the FAA.
Persons with this authority are responsible for the correctness of the payment and of
the account verification procedures. For pay transactions, under section 34 of the
FAA, the person certifies that:
–
the payee is entitled to or eligible for the payment;
–
the payment conforms with relevant contract or agreement terms
and conditions;
–
the transaction is accurate and the financial coding has been
provided; and
–
the transaction complies with all relevant statutes, regulations,
orders in council, and Treasury Board policies, such as overtime policies.
(c)
The process for verifying accounts must leave auditable evidence of
verification, including the identification of the various individuals involved.
3.
Responsibilities — Section 33 of the FAA
(a)
Financial officers with payment authority under section 33 of the FAA must
ensure that an adequate process is in place to verify accounts under section 34 of the
FAA, and that the process is being properly and conscientiously followed.
(b)
Section 33 of the FAA authority can be delegated to a person outside the line
authority of the senior financial officer (SFO) of the department. In such cases, the
SFO, being responsible for the overall quality of financial management, remains
entirely responsible for the effectiveness and efficiency of the person exercising that
authority.
(c)
Therefore, the SFO should establish procedures and, probably, an audit
program to ensure that authority under section 33 of the FAA is exercised in
accordance with departmental standards and control objectives. As well, the SFO
must ensure that proper mechanisms are in place to allow the person with authority
under section 33 of the FAA to verify the legality of the payment and the availability
of funds.
4.
Responsibilities — Section 34 of the FAA
(a)
Persons who have been delegated authority under section 34 of the FAA must
receive a set of instructions or procedures to ensure that they respect all
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departmental, legal and regulatory requirements.
(b)
Those officers who are delegated payment authority under section 33 of the
FAA are responsible for issuing these instructions and for the system for verifying
accounts and related financial controls.
5.
Other
(a)
Two other principles must be observed:
–
no person shall exercise signing authority under both sections 33 and
34 of the FAA with respect to a particular payment; and
–
no person shall exercise spending authority (section 34 of the FAA)
with respect to a payment from which he or she personally can benefit,
directly or indirectly.
(b)
Finally, procedures must be in place to ensure adequate processing of
assignments of Crown debts or powers of attorney recognized in force by the
Receiver General.
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