D. Payment Processing Procedures

D.1 Expense Authority Certification

Core Policy - 4.3

1. Further to policy 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, that GST is not charged, discounts and credits are taken, and item was not previously paid;
   • qualified receiver sign off of the direct invoice (or coding sheet/equivalent); and
   • filing support documentation and processing payments.
2. 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.
3. 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. It is recommended that expense authorities review these areas at least once each year.
4. 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.

D.2 Cheque Stub Printout

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 .

D.3 Contract Payments

Core Policy - 6.3.6

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 and address of the supplier;
• 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; 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) 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.

D.4 Payments in U.S. Funds

Payments in U.S. Funds to Suppliers Located in U.S.A.

Payments to suppliers located in the United States should be in US funds, unless otherwise specified. For all payments in US funds, payment requests will be drawn on the US$ Bank account. Cheques drawn on the US$ account are eligible for the United States clearing system; therefore, should not cause any difficulties to the US supplier.

When U.S. Dollar Value Exceeds Canadian Dollar

When the value of the US dollar exceeds the Canadian dollar, the payment request will be completed as follows:

1. Enter the amount of the cheque in US funds; and
2. Enter the US exchange rate as a premium and indicate the exchange amount as a credit to STOB 4612.

When the Canadian Dollar Value Exceeds U.S. Dollar When the value of the Canadian dollar exceeds the US dollar, use the procedures in a) above with the exchange amount shown as a debit to STOB 4612.

Social Service Tax

When paying for goods subject to social service tax where the supplier is not registered to collect the tax, a direct credit must be made to revenue STOB 4006 for the amount of the tax. The tax is calculated on the Canadian value of the purchase.

Transactions of CA$ 50 (equivalent) up to US$ 50,000

To process payments of CA$ 50 (equivalent) to US$ 50,000 payable in US funds and destined for a supplier located in the United States, ministries will use the quarterly US exchange rate as provided by the Financial Management Branch, Office of the Comptroller General. Rate changes will be transmitted by electronic memorandum to ministry contacts before the quarter and earlier if the quarterly rate requires adjustment.

Note: Ministries are advised by email of rate changes. Exchange rates are posted at http://www.fin.gov.bc.ca/ocg/fmb/manuals/CPM/us-exch.pdf

Transactions of US$ 50,001 to US$ 99,999

For payments of $50,001 to $99,999 in US funds and destined for a supplier located in the United States, on the day the payment is to be made, ministries will obtain a daily rate of US exchange from the Bank of Canada website or contact the Payments Manager, Banking/Cash Management Branch at (250) 387-7110. The ministry will use the US exchange daily rate to determine the Canadian equivalent of the US funds required.

Transactions of US $100,000 to US $4,999,999

The ministry must notify Provincial Treasury, Banking/Cash Management Branch, of the amount in US funds required at least 48 hours before the payment day. On the day the payment is to be made, the ministry must obtain the US exchange daily rate from Provincial Treasury, Banking/Cash Management Branch to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Payments in US Funds to Suppliers Located In Canada

Periodically, Canadian suppliers will request payment in US funds. Prior to processing such requests, ensure that the payment amount in equivalent Canadian funds is not acceptable.

Transactions of CA $50 to US $50,000

To process payments of CA $50 (equivalent) to US $50,000 payable in US funds to Canadian suppliers, the payment request is treated as a normal US payment using the quarterly US exchange rate.

Transactions of US $50,001 to US $99,999

To process payments of $50,001 to $99,999 payable in US funds to Canadian suppliers, on the day the payment is to be made, ministries will obtain a daily rate of US exchange from the Bank of Canada website www.bankofcanada.ca or contact the Payments Manager, Banking/Cash Management Branch at (250) 387-7110 t. The ministry will use the US exchange daily rate to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Transactions of US$ 100,000 to US$ 4,999,999

The ministry must notify Provincial Treasury, Banking/Cash Management Branch, of the amount in US funds required at least 48 hours before the payment day. On the day the payment is to be made, the ministry must obtain the US exchange daily rate from Provincial Treasury, Banking/Cash Management Branch to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Transactions Payable in US Funds for US$ 5,000,000 and More for Suppliers Located In Canada and United States

Ministries must notify Provincial Treasury, Banking/Cash Management Branch, well in advance for special arrangements to requisition US fund payments for such very large amounts. It may take from five to fifteen days to free up the short-term investments for such large amounts.

D.5 Payments to Foreign and Out-of-Province Suppliers

Payments to suppliers in foreign countries other than in the United States should be made in that country's currency (i.e., England-pound sterling, France-French franc, etc.). However, when an invoice specifies payment in a currency other than that of the originating country, payment may be requisitioned in the specified currency. For example, a supplier from England may request payment in US funds.

Where practicable ministries will make payments in Foreign Funds either from petty cash for amounts up to the petty cash transaction limit (Canadian equivalent), or from the CFO Bank Account for amounts up to CA$1,000 (Canadian equivalent), by purchasing money orders or drafts, preferably from the Provinces principal banker.

Social Service Tax

When paying for goods and services that are subject to the Social Service Tax, and the supplier is not registered to collect the tax, a direct credit must be made to Revenue STOB 4006 for the amount of the tax. The tax is calculated on the Canadian value of the purchase.

This applies to out-of-province, as well as foreign purchases.

Application of Exchange Rates

The applicable exchange rate must be applied to the invoice to determine the Canadian equivalent (CA$). The ministry should contact the Payments Supervisor, Banking/Cash Management Branch at 250 387-7111. Ministries shall specify the amount of foreign currency when obtaining the exchange rates. Provincial Treasury will book the monies with the bank at the daily rate of foreign exchange.

Exchange Rate Requests

Requests for exchange rates must be received by Provincial Treasury by 9:00 a.m. of the day the payment is to be processed or one business day prior to the payment. Ministry officers should be made aware that the bank will not cancel the booked daily rate of foreign exchange. The Province must absorb the gain or loss if the cheque is not presented to the bank for payment on the date that the rate is booked.

Canadian Fund Requests

When foreign suppliers request payment in Canadian funds, show the invoice amount in Canadian funds and the exchange rate as "NIL".

D.6 Certification – Invoices and Other Supporting Documents

Core Policy - 4.3.4

Supporting documentation shall include: original 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 original invoices with the payment requests.
• All invoices or other claims for payment must be date stamped immediately upon receipt with a stamp clearly identifying the ministry (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 Cardholer and made out to the ministry.

Required Information

Invoices/supporting documents shall contain the following information:

• the name and address 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);
• description of goods or services being charged:

Invoices for goods shall show:

• a description of each item purchased,
• the cost per unit;
• the quantity purchased; 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;
• reference to a contract or agreement;
• if the invoice is for delivery charges, then a copy of the waybill (or equivalent) is required; and
• if the invoice is for air travel, then the departure and arrival date/time of each trip and the name of each employee travelling must be shown.
• the total amount charged.

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 an original 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 or duplicate invoices unless a thorough investigation has been carried out to ensure that previous payment has not been made and the invoice is certified accordingly, by affixing the rubber stamp certification or written certification: "Certified that this copy has not been previously passed for payment."
• statements.

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]).

D.7 Travel Charge Direct Billings

Core Policy - 10.3.17

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.

Charges billed directly to ministries must be exclusive of GST. Provide the certification clause (see B.6) to suppliers where necessary.

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.

D.8 Payments of Deputy Minister Car Allowance

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 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 Electronic Deposit of Payments

D.9.1 Electronic Deposit of Payments to Supplier

D.9.2 Returned / Rejected Electronic Deposits

D.9.3 Recall of Electronic Deposits

D.9.1 Electronic Deposit of Payments to Suppliers

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 and employee suppliers’ bank account data has been established in the CAS Supplier Maintenance data base;
• payments are made in Canadian dollars; and
• the suppliers’ bank account is held at a financial institution within Canada.

3. Requests to update the supplier maintenance bank account module need to be completed by use of a Direct Deposit Application Form (FIN 312).

4. Original signed forms need to be submitted for processing to minimize the potential for fraud and financial loss to the province.

5. 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.

6. Ministries can obtain printed forms from the Office Products Centre (OPC 7530951069) to provide to suppliers, or use the fillable Direct Deposit Application Form (FIN 312) pdf. Refer to the OCG - Financial Forms site and follow the instructions to complete the form, or Provincial Treasury, Payment Services for additional information.

7. Agency roles and responsibilities with respect to handling and processing the Direct Deposit Application Form (FIN 312) are as follows:

Ministry CAS Contacts for Supplier Maintenance:

• for review, accuracy and authorization of the forms
• to submit forms to Provincial Treasury, Payment Services

Provincial Treasury, Payment Services:

• 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 forward forms on to CAS

CAS Security and Data Administration:

• for form review to ensure that supplier information is current and valid
• to link bank account information to individual supplier number
• to maintain, file & archive the original form and supporting documentatio

D.9.2 Returned / Rejected Electronic Deposits

Periodically, electronic deposits cannot be made in line with the banking information on file, and are rejected and returned to the Province.

1. 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 oracle.

2. As required, ministries may issue a replacement payment by cheque following the process outlined in the CAS Oracle AP User Manual, Chapter 6.

D.9.3 Recall of Electronic Deposits

Ministries may require an electronic deposit to be recalled after the payment has been created and released to Provincial Treasury.

1. 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;
• oracle a/p payment number;
• payee/supplier name;
• amount; and
• payment due date.

2. Recall requests need to be received by Provincial Treasury not later than 10 am on the business day prior to the payment due date.

3. 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).

D.10 Cheque Management

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

Agency and Ministry Roles and Responsibilities

Treasury Payment Services (TPS):

• Maintains the Cheque Management System which records cashed cheque, stop payment, replacement and returned undeliverable/unclaimed information for the following Province of BC cheque only issuance accounts:
  • General – Canadian;
  • General – US;
  • Senior Supplement;
  • Medical Services Plan;
  • Government Agent (issued by Service BC); and
  • Province of BC Payroll

• Responsible for receipt, review, accuracy and timeliness of the recording of:
  • stop payment requests;
• cheques returned as undeliverable;
• replacement cheque details*; and
• redirected cheques.

• Responsible for management of the:
  • returned undeliverable / unclaimed cheque items account;
  • cashed cheque data process;
  • 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).

* only recorded in the Cheque Management System (CHQ) if the replacement cheque is issued using special handling code “X”.

** 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.

D.10.1 Cashed Cheque Records

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.

1. Cheque Enquiry
1. Ministries need to ensure that their financial service / administrative contacts have online access to CHQ.
2. 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 / Replacement Requisition / Payment Cancel form (FIN 358) to TPS for cheque “Enquiry” only.
   
2. 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.

1. TPS can provide digital image copies to authorized ministry contacts upon request by email using the Cheque Copy Request form (FIN 243). 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.
2. Requests for cheque copies received from Canada Revenue Agency or law enforcement agencies must be redirected to TPS.
3. 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.
4. Original cashed cheques will only be released to Crown prosecutors for restricted use in a court of law.

D.10.2 Stop Payment or Cancellation of Cheque Payments

1. Ministry Requested Stop Payment or Cancellation of Cheque Payment

This is processed by submission of a completed FIN 358 form to Treasury Payments Services (TPS). Ministries need to:

• review TPS CHQ online cheque information to determine the status of a cheque payment;
• when the issue date is prior to the information available in CHQ, 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; and
• ensure that a completed Indemnity form (FIN 369A for payments not exceeding $5,000 CAD, or FIN 369 for payments that exceed $5,000 CAD) or original cancelled cheque is on hand before requesting a stop payment.

2. CAS Oracle Payment Void Transaction

   • TPS will void the original payment transaction in CAS Oracle within 2 business days following the stop payment date
   • Void transactions cannot be reversed
   • Ministries need to refer to CAS User Manual 6.2.3 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.  

1. Definitions:
   
   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.

2. 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 #250.953.4765
Email: FIN PT BCM CHQ


3. 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 insitution 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 CAS Oracle;
  • once confirmation of credit has been received, TPS will notify the requesting ministry contact to initiate a replacement cheque.

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:

1. reimburse the cashing agency;
2. set up an account receivable (refer to CPPM Chapter 7); and
3. 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.

D.10.3 Issuance of Replacement Cheque Payments

Replacement cheque payments should only be issued if:

1. the stop payment is confirmed.  Online cheque enquiry in the Cheque Management System (CHQ) will confirm that the stop payment has been recorded;
2. the original payment transaction is voided in CAS Oracle.  CAS payment enquiry will confirm that the void transaction has been completed; and
3. a completed Indemnity form (FIN 369A for payments not exceeding $5,000 CAD, or FIN 369 for payments that exceed $5,000 CAD) or original cancelled cheque is on hand.

Refer to CAS User Manual 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. 

1. Indemnity
   

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.

1. Indemnity is not required if the original cheque has been returned to the ministry or Treasury Payment Services.
2. For replacement of cheque payments not exceeding $5,000 CAD, use Indemnity form FIN 369A.
3. For replacement of cheque payments that exceed $5,000 CAD, use Indemnity form FIN 369 (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 FIN 358 form. 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.

4. Replacement Cheque – Government Agent

The Government Agent which originally issued a cheque payment can issue a replacement cheque once there is confirmation that the original cheque payment has been stop paid, and payment has been voided in CAS Oracle.  Alternately, the originating ministry may process the replacement cheque via CAS Oracle using the process which is outlined in the CAS User Manual.

D.10.4 Returned Undeliverable and Returned Undeliverable Unclaimed Cheque Payments

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).

1. 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.

Province of BC US Cheques: are recorded in CHQ and then directed to the issuing ministry.

Province of BC Payroll Cheques: will be redirected to the employee if a new address is available in the Province of BC Global address book. If no address is available the cheque will be returned to Solutions BC, Payroll Services.

2. 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 CAS Oracle.

   • 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". Staple a self-adhesive label typed with the new mailing address (including payee name) to the report and return to TPS.

• Payment cancellation

If the ministry has determined that the payment is no longer valid or required, attach a completed FIN 358 form to the CHQ05 Report and return it to TPS. (Refer to CPPM D.10.2 for additional information on Stop Payment /Replacement process).

• 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.


3. Returned Undeliverable – Posted / Added to Unclaimed
   
   If, after 90 calendar days (from the date the cheque was recorded in CHQ and no longer than 6 months from issue date), no action is taken regarding a returned cheque, the returned cheque will be added to the Provincial Treasury's Unclaimed Account. A copy of the Cheques Posted to Unclaimed Report is forwarded to the issuing ministry for review and action. If no action is taken by the ministry after 10 calendar days, the cheque is deposited to Provincial Treasury's Unclaimed Account.
   
   Note:  Once a cheque payment has been added to the unclaimed account, TPS cannot remail the cheque to the supplier or cancel the payment.

   • Recovery of Payments added to the Provincial Treasury's Unclaimed Account

Where a ministry determines that the cheque payment is no longer valid or if the ministry is contacted by the supplier after a cheque has been added to Provincial Treasury's Unclaimed Account, the ministry can recover the funds by submitting a request by email to TPS The ministry needs to provide the original cheque payment information and the ministry service line coding.

• Recovery of Provincial Treasury's Account to Consolidate Revenue Fund (CRF)

Effective September 2006, cheque payments that remain unclaimed for a period of 7 fiscal years will be recovered to the CRF.  All records for cheque payments recovered to the CRF will be separately and securely maintained to enable future payment enquiries and claims.

D.11 Batch Release

Core Policy 4.3.3

Batch Release of payment is permitted for high volume transactions from program areas where EA and QR 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.