G. Revenue Control Procedures

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://www.min.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://www.min.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://www.min.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://www.min.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 senior 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

• Ministries depositing $US funds directly to a CA$ bank account will deposit the funds converted to CA$ using the http://www.fin.gov.bc.ca/ocg/fmb/manuals/CPM/us-exch.pdf
  
  
• Ministries depositing US$ funds to a US$ bank account need not convert the funds.

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:

When the payment is received:

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.

1. 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.
   
   
2. 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.
   

3. 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).

4. 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.
   
   
5. 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.
   

6. 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.

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