G.1
Cash Deposits
Core
Policy - 7.3.9
Where cash and/or
negotiable instruments are received through the mail on a regular basis,
at least two persons, where practicable, shall be present at the mail
opening. A daily record of such cash or negotiable instruments shall
be maintained and signed by all persons present at the mail opening
and by the person receiving the cash for deposit.
For regular deposits,
there are two basic cash deposit input processes that are in
effect to meet these requirements. Ministries may deposit:
- to an Accelerated
Deposit Transfer bank account (G.2 below); or
- to a Government
Agent (G.3 below).
For instructions
on handling a one-time deposit, incoming wire transfers or for
general deposit assistance see Banking/Cash
Management.
Ministries must
reconcile all receipted Deposit Forms or bank deposit slips to Corporate
Accounting System reports (or equivalent ministry financial management
reports) to ensure cash deposits are recorded in the correct ledger
accounts.
Note:
Cash Management Services, Provincial Treasury must be informed immediately
of any large ($1 million or more) deviation from your normal bank deposit
amount. Immediate reporting of this information will assist Provincial
Treasury in daily investment decisions.
Goods and Services
Tax
Some fees and revenue
sources of the government are subject to the GST. The GST portion of
the amount deposited should be coded to STOB value 3294. Depending on
the ministry revenue system, the GST liability may be recognized when
an invoice is issued or when payment is received. If the GST liability
is recorded when invoices are issued, then GST will not have to be recorded
again when payment is received. Staff involved in receiving revenue
should understand how their system operates, in order to avoid duplicate
recording of GST.
Payment by Cheque
Whenever payment
is made by cheque by a member of the public in person, ministries shall
ensure that:
- two pieces of
identification are presented and details therefrom entered on the
reverse side of the cheque including full name, address and telephone
number of the payer, unless these items appear on its face;
- the cheque bears
the current date;
- the amount written
in the body of the cheque is in agreement with the figure on the cheque;
- the cheque bears
a signature; and
- the person is
informed that a $20.00 service fee will be charged for each cheque
that is dishonoured subsequent to its deposit.
G.2
Accelerated Deposit Transfer Bank Accounts
Core
Policy - 7.3.10
Accelerated Deposit
Transfer bank accounts allow deposits to be recorded electronically
to the General Ledger on a daily basis. Ministries may establish these
accounts at the Canadian Imperial Bank of Commerce, Bank of Montreal,
Hongkong Bank of Canada and the Royal Bank of Canada. This section deals
only with those offices depositing to one of these four banks. If a
ministry prefers to deposit at another institution alternate procedures
are available through Provincial Treasury Banking Section to record
these deposits to the General Ledger on manually produced Journal Vouchers.
(see http://gww.fin.gov.bc.ca/pt/bcm/rev/revservBA.shtml#a ).
Deposit Procedures
Ministry branch
offices shall prepare the deposit slip and will physically deposit public
money to their bank account. Cheques will be endorsed as indicated per government
standards (government access only). These deposits are automatically
transferred to the Consolidated Revenue Fund bank account at the Victoria
branch of the appropriate bank. Daily, the four banks transmit files
to Provincial Treasury that detail all of the deposits processed for
the previous day.
Ministries may use
private couriers to transport cash (currency, coins) up to a daily limit
of $200 per location, per deposit, however, they do so at their own
risk as couriers cannot be held responsible for losses. When deposits
exceed this limit alternatives should be considered, such as armoured
car service or more frequent deposits. Deposits should be sent in tamperproof
pouches or sealed envelopes. Contact the Provincial Treasury for assistance
in establishing armoured car service for cash deposits. (see http://gww.fin.gov.bc.ca/pt/bcm/bank/bankservBCar.shtml government access only)
Treasury Deposit
Information System
Provincial Treasury's
TDI system receives deposit detail files daily from the Bank of Montreal,
Hongkong Bank of Canada, Canadian Imperial Bank of Commerce and the
Royal Bank of Canada. TDI creates and transmits an electronic journal
voucher file to the Corporate Accounting System to credit the General
Ledger accounts of depositing ministries. For more information on the
TDI system see Banking/Cash
Management.
G.3
Deposits through Government Agents
Whenever public
money is deposited with a Government Agent, a Deposit
Form FIN 278 (government access only) is to be completed by the
depositing ministry. A complete cash deposit submission will include
the Deposit Form, calculator tapes if more than one cheque or money
order is submitted and supporting documents as required.
The local Government
Agent will maintain a current list of Service Codes for reference purposes
by ministry district offices. Ministries should use Service Codes specifically
linked to general ledger accounts where these linkages exist. For a
deposit made to a general ledger account not linked to a specific Service
Code, use the blanket Service Code assigned to your ministry and specify
the full coding where the deposit is to be credited.
The Government Agent
Revenue Management System (GARMS) will verify these codes with the Corporate
Accounting System. Forms with incorrect coding will be returned to the
ministry office for correction.
Province of BC
Receipts – Form FIN 48
All ministry field
offices can order Province of BC Receipt forms FIN 48 from the Queen's
Printer.
Once revenue stock has been received and acknowledged by a ministry,
that ministry will be responsible for the control of the pre-printed
revenue stock document numbers.
Dishonoured
Cheques
Core
Policy - 7.3.12
See the Provincial
Treasury website for information on dishonoured cheques: http://gww.fin.gov.bc.ca/pt/bcm/rev/revservNSF.shtml (government access only)
Authenticating
Canadian Currency
There are numerous
security features found on Canadian bank notes that help identify a
genuine note. Please refer to the Bank of Canada website for information
on counterfeit detection: http://www.bank-banque-canada.ca/english/banknotes/counterfeit/index.html
Authenticating
US Currency
The following website
provides current information on new control features of U.S. Bills: http://www.moneyfactory.com/cd042500/gallery_index.html.
See also: http://www.ustreas.gov/usss/index.shtml
G.4
Deposits in US Currency
Core
Policy - 7.3.13
Billings for the
sale of goods and services and taxes levied, where possible, should
be issued in Canadian funds (CA$). All invoices and other forms of billing
issued by the province should carry a note that payment is to be made
in Canadian funds by cheque drawn on a Canadian financial institution
or by banker's draft or money order. This is particularly important
where experience indicates a high probability that payment will be tendered
in US funds. Where it is justified, billings may be issued in US funds
converted at the established quarterly exchange rate. Note: Cheques
issued in CA$ funds are not acceptable if drawn on a financial institution
outside of Canada.
US Deposits Exceeding
$10,000
See Provincial Treasury
deposit instruction at:
http://gww.fin.gov.bc.ca/pt/bcm/other/otherservRates.shtml#exch (government access only)
US Deposits of
$10,000 or Less
For processing receips
in US funds, refer to the posted exchange rates at:
http://www.fin.gov.bc.ca/ocg/fmb/manuals/CPM/us-exch.pdf
U.S. Fund Overpayments
Customer/client
U.S. fund overpayments as a result of an exchange rate differential,
when received by mail, shall be credited to a ministry's miscellaneous
revenue account.
This exchange overpayment
is calculated, in CA$, as the difference between:
- amount receivable
as per billings in CA$; and
- amount received
as converted at the applicable provincial official quarterly exchange
rate to CA$ equivalent.
Where the exchange
overpayment is less than CA$10.00, no refund shall be issued unless
written request is received from the person who made the original payment.
Where the overpayment is CA$10.00 or more, a refund in Canadian funds
shall be issued. Such refunds shall be processed in accordance with
CPPM 4.3 and CPPM Part I - 7.3.11. Signing authority must be obtained
for the payment requisition. Such refunds shall be debited to the ministry's
miscellaneous revenue account
If goods and services
have not been shipped and US funds are received by mail resulting in
an exchange differential underpayment, the remittance should be returned
along with a request for payment by money order or bankers draft in
Canadian funds. If, however, a debt receivable for other shipments is
already outstanding, the payment should be accepted and a further billing
should be issued if the underpayment represents a significant portion
of the total cost. Any minor shortfall will be debited to the ministry
contingency account and a further request for payment will not be made.
Ministry chief financial officers will establish the dollar amount
or percentage that is a "significant underpayment portion"
for revenues or recoveries received in their ministry.
Methods of Depositing
US Funds
Deposits to a
Government Agent
- Ministries will
convert the US$ to CA$ using the http://www.fin.gov.bc.ca/ocg/fmb/manuals/CPM/us-exch.pdf
- Upon receipt
of the Deposit Form, Government Agents will enter to GARMS the amounts
as calculated by the ministry on the LTX screen. At the pay screen,
the face value of the US payment will be entered and GARMS will calculate
the exchange. The funds will be deposited to the bank at the quarterly
rate. The bank will calculate the difference between the quarterly
and daily rates and deposit the difference to the Government Agent
bank account. Revenue and Financial Planning will prepare any adjustments
necessary.
Deposits directly
to a Ministry Bank Account
G.5
Return of Foreign Currency Payments
Return of U.S.
Dollar Payments
Province of British
Columbia US Dollar Cheques for "Payments in US Funds" issued
by a ministry accounts office but subsequently returned, are not
to be deposited because of the fluctuating exchange rate.
If the cheque is
available through a Payment Inquiry in Oracle, Provincial Treasury,
on receipt of a FIN
358 from the ministry, and having confirmed that the payment is
still outstanding, can do both a Stop Payment and Void Transaction,
which would place the payment into a held status. The Stop Payment is
fed into the Monthly Bank Reconciliation system where it must match
up with the Void also fed into the Reconciliation system to balance.
The ministry is responsible to access the held transaction and either
close the payment or replace it.
If the cheque is
not available through Payment Inquiry in Oracle, Provincial Treasury,
on receipt of a FIN 358 from the ministry, and having confirmed that
the payment is still outstanding, can do only the Stop Payment. The
Stop Payment is fed into the Monthly Bank Reconciliation system (part
of the balancing function in the reconciliation is to ensure that Stop
Payments that cannot be voided are journal vouchered back to the originating
ministry using STOB 3006). The ministry is responsible for accessing
their STOB 3006 to either replace the payment or to journal voucher
the credit to their prior year's expenses STOB if the payment is not
to be replaced.
Return of Foreign
Draft Payments
(Other than US dollar Cheques)
Province of British
Columbia Foreign Currency Drafts issued at a bank by the Province and
not sent, or returned by payee, shall be converted to $CDN funds.
The difference between
the converted amount and the amount the ministry originally paid for
the Foreign Currency Draft must be credited to STOB 4612.
G.6
Trust Accounts
Money and Negotiable
Securities Held in Trust by the Province
Many ministries
receive trust fund money or negotiable securities for various reasons.
Cash is presently remitted to Treasury or is held in a bank account.
Negotiable securities are usually held for the ministries by the Ministry
of Finance or a chartered bank. Trust Fund cash and negotiable securities
should be reflected in the Public Accounts and the reconciliation of
securities must be prepared.
Accounting Procedures
All trust fund monies
or negotiable securities received and held by the province must be reflected
in the Corporate Accounting System. If service lines do not presently
exist, they should be set up in conjunction with the Financial Reporting
and Advisory Services, Office of the Comptroller General. Balances in
these accounts should be adjusted at least annually (at fiscal year-end),
and preferably monthly.
Required Records
Each ministry must
maintain records that disclose all trust monies and negotiable securities
for any Act for which they are responsible. Ministry records should
provide the name of the Act involved and the total deposits received
under the Act. Procedures must be established to account for any transfer
of funds or securities to the Registrar of Securities or to financial
institutions. Deposits or guarantees could be a combination of money,
securities or insurance bonding.
Miscellaneous
Requirements
If a security is
registered in the depositor's name, the ministry should ensure that
the province has a power of attorney to exercise its claim on the security.
Procedures must
be established to ensure that depositors receive interest to which they
are entitled.
Monies held in a
separate bank account by a ministry must be registered with, and receive
approval from, the Director, Cash Management, Provincial Treasury, Ministry
of Finance.
Reconciliations
Reconciliations
as at March 31st are required annually for all assets held in trust.
Reconciliations should be prepared by the ministry for all holdings
under Acts for which they are responsible. The following information
should be included:
- the name of the
depositor for whom the cash or security is held;
- the legal authority
for holding cash or security;
- the reason for
holding the cash or security;
- the type of security;
- details of the
security including book value, face value, serial number and registration
(in the case of bonds, the maturity date and interest rate should
also be shown and, in the case of stock, the class and number of shares
should be shown); and
- book values or
amounts on deposit should be totalled to balance with the total held
by the Ministry of Finance or the financial institution. The related
general ledger account and balance should also be identified.
Refer to Section
H.1 - Trust Funds for annual reporting requirements.
Suitor's Funds
The Trust Section
of the Ministry of Attorney General processes funds paid into the court
in connection with court actions (suitor's funds).
Money paid into
a court is forwarded to the Trust Section, Ministry of Attorney General
in accordance with Supreme Court of British Columbia rules. The Trust
Section of the Ministry of Attorney General will open an account for
each amount received. When the money is to be paid out, the Supreme
Court registry will forward a Certificate for Pay Out to the Trust Section.
The Trust Section will prepare a payment request to issue a cheque.
Interest is calculated on money held in accordance with Supreme Court
Rule 58.
Public Guardian
and Trustee of British Columbia
The Public
Guardian and Trustee of British Columbia processes transactions
relating to Official Committee accounts (Patients Property Act),
Official Administrator accounts (Estate Administration Act) and
Official Guardian accounts (Infants Act). Transactions are entered
into the trust systems.
G.7
Interest on Money Owing to the Province
Core
Policy - 7.3.5
Interest
on Overdue Receivables
Except as specifically
exempted by BC
Regulation #386/92, Interest Rate under Various Statutes,
ministries shall calculate interest on money owing to the government
as provided by BC
Regulation #214/83, Interest on Overdue Accounts Receivable Regulation.
An officer-delegated
authority by the deputy minister to issue interest charges shall approve
interest charges issued by invoice or included on a statement of account.
Such supporting documentation will be part of the ministry's accounting
records.
Except as noted
below, ministries shall record invoice/statement claims for overdue
interest as:
| Dr. |
Receivable
Control Account |
| |
Cr. Revenue/Recovery
Account |
When the payment
is received:
| Dr. |
Cash |
| |
Cr. Receivable
Control Account |
Ministries must
balance control accounts receivable to subsidiary accounts receivable
records monthly and produce aged trial balances for review by officers
at senior levels.
Ministries shall not record overdue interest in the accounts of the ministry when
it is unlikely that a significant portion of the claim for overdue interest
will be collected. Overdue interest will, however, continue to accrue
until the debt is paid in full or is forgiven. When payment of the debt
is received, the portion related to interest shall be credited to an
appropriate revenue or recovery account.
G.8
Donations of Gifts in Cash or in Kind
A gift is generally
a voluntary transfer of property for which the donor expects and receives
nothing of value in return.
A gift in kind includes
such things as capital property, depreciable property and personal-use
property including listed personal property. However, a gift in kind
does not include a gift of services.
For purposes of
these procedures, capital property is generally, any property of value
purchased for investment purposes or to earn income (i.e., a home; cottage;
securities, such as stocks and bonds; and land, buildings and equipment
that are used in a business or rental operation). Personal-use property
includes a special class of property called "listed personal property."
Items in this class generally increase in value and include any print,
etching, drawing, painting, sculpture or other similar work of art;
jewellery; a rare folio, manuscript or book; a postage stamp; or a coin.
On occasion, ministries
may receive donations such as paintings, coin sets, rare books or antique
furniture, etc. The procedures, which need to be followed for a donation
made in kind to a ministry, are set out below.
- In terms of
asset management, receipt of the donated property (such as a painting,
coin set, rare book or antique furniture, etc.) must be properly documented
and recorded as a ministry asset.
- Where the value
of the donation justifies the administrative costs, it may be necessary
to establish the fair market value (FMV) of the item being donated.
The generally accepted meaning of FMV is the highest price, expressed
in terms of money, that the property would bring in an open and unrestricted
market between a willing buyer and a willing seller who are both knowledgeable,
informed and prudent, and who are acting independently of each other.
The appraisal
has to be an estimate of the FMV of the object on the date it was
donated. For Canada Revenue Agency purposes, they usually consider
that an arm's length sale and purchase of the property, at or near
the date of valuation, is the best proof of value at the time. Collectors
(i.e., the donor) often approach appraisers, dealers and other people
who are knowledgeable about particular objects to get appraisals
for income tax purposes. Therefore, through their connections, they
are able to obtain an independent fair market value appraisal of
the property.
- The receiving
ministry will issue an official tax receipt if the value of the donation
justifies the administrative costs and if the donor would benefit
from, or requests a receipt. To acknowledge the donation each official
receipt must contain at least the following:
- a statement
that it is an official receipt for income tax purposes
- the ministry
name and address where the receipt was issued
- the day on
which, or the year during which, the donation was received or
where property other than cash is received, the actual date of
receipt
- the day on
which the receipt was issued when it differs from the date of
the donation
- the amount
of the gift
- the name
and address of the donor
Each such receipt
must be prepared at least in duplicate, must be signed by a revenue
authority officer and must bear its own serial number. In addition,
where the donation is a gift of property other than cash, the fair
market value of the property at the time the gift was made, as well
as the date of the gift, a description of the property and the name
and address of the appraiser (if any) of the property, is required
(on the receipt).
- Ministries may
establish internal procedures whereby documentation of the gift in
kind (i.e., a copy of the official tax receipt and a copy of the appraisal
information etc.) is forwarded to their ministry's Revenue Manager
for filing in the ministry records. Also, where donated tangible assets
are converted to cash, there should be proper accounting entries.
- To deposit donations
of cash to a ministry accelerated funds transfer (AFT) bank account,
ministries will process a journal voucher to credit their miscellaneous
revenue account and debit the general ledger account that is linked
to the ministry's bank account (as per linkage on Treasury Deposit
Information (TDI) System).
For those ministries
who do not have an AFT bank account, forward the cheque to the Bank
Control Supervisor, Provincial Treasury for deposit to the Consolidated
Revenue Fund bank account. Attach a journal voucher with the appropriate
coding to credit miscellaneous revenue. Provincial Treasury will
return a copy of the completed voucher to the ministry for record
purposes.
- A donor may
attach specific conditions to their contribution (i.e., a cash donation
to be used for a specific purpose). In these cases, ministry officials
should seek advice from their ministry solicitor(s) to ensure that
the Province can meet the conditions and to determine if it's in our
best interest to do so (the Province has the right to refuse a gift,
if necessary). The process may involve establishing a trust fund.
In addition, where the specified purpose entails a contribution towards
an existing program expenditure, it may involve establishing a Sec.
25 account. As each case has to be considered on its own merit,
prior to signing an agreement to abide by the conditions, legal counsel's
advice is necessary.
G.9
Ministry Billings – Goods and Services Tax
In determining when
ministry billings should include the Goods and Services Tax (GST), the
following should be noted:
Where a ministry
renders a taxable good or service, the charge or billing for the supply
must include the GST. This is valid for supplies to the private sector
or when a ministry provides the goods/service to such tax-paying public
bodies as:
- Municipalities,
schools, colleges, universities and hospitals; and
- Commercial government
enterprises such as BC Hydro, ICBC.
In some cases, a
ministry may bill to recover costs only (e.g., staff salaries), in accordance
with certain cost recovery arrangements with other public sector partners.
The fact of cost recovery does not change the above application of tax
for the rendering of a taxable supply. Therefore, in preparing cost
recovery agreements involving a taxable supply, ministries should make
clear the inclusion of the GST.
The province and
certain of its entities do not pay GST. If a ministry renders a taxable
supply to a tax-free government entity, GST is not billed. If there
is uncertainty whether a government entity is GST tax-free, refer to Schedule
A – GST-Exempt Government Entities (government access only)
or contact the Financial Management Branch, OCG at 250 387-4671.
|
