4101 Loss of Cash or Other Assets
About This FAM
|Responsible Agency:||Government Accounting - Finance|
|Last Updated:||Aug 2005|
This directive provides direction for where it is suspected or believed that;
- a loss of public money or property (including that which is held in trust) as defined in the Financial Administration Act (FAA) has occurred;
- an offense under Part X of the FAA (e.g., fraud, theft, bribery, collusion to defraud, etc.) has been committed;
- a robbery, break-in or willful property damage has occurred;
- public or private property has been lost or destroyed through the misconduct, willful neglect of duty or negligence of a public officer; or,
- damage to any public asset, including real property, vehicles, mobile equipment, marine and aviation assets (hereafter referred to as “property”), whether government owned, leased or rented, has occurred.
Reporting Suspicion of Criminal Activity to the Police
Except in exceptional circumstances such as robbery, break-in or willful property damage, only the Comptroller General or persons authorized by the Comptroller General shall report suspicion to the Royal Canadian Mounted Police (RCMP), if necessary.
Consultation Regarding Appropriate Action
If an employee is suspected of involvement in a fraud or a theft, in addition to reporting this to the Controller General (ss. 3.4.1 below) , the Deputy Minister shall refer to the Human Resource Manual (section 701) and consult with the Employee Relations Division, Financial Management Board Secretariat (FMBS) regarding what action should be taken.
Financial Responsibility for Loss or Damage
If an employee is suspected of negligently causing loss of or damage to public or private property, the Deputy Minister shall consult with Employee Relations Division, Finance and Risk Management and Insurance, Department of Finance regarding notification to the employee that they may be held financially responsible for such loss.
Obligation to Report
Deputy Ministers shall ensure that all departmental employees are advised of their obligation under Part X of the FAA to report in writing to a supervisor any knowledge or information of a suspected fraud or a violation of the FAA. Where it is suspected the supervisor may be involved a report must be made to a more senior supervisor.
Deputy Ministers shall ensure that all department employees are advised of their obligation to report property losses in accordance with this directive (ss. 3.3 below).
Requirement for Confidentiality
The Deputy Minister and the Comptroller General are to take all reasonable precautions to keep confidential all records, information and the identity of individuals related to or dealing with an allegation of a loss or an offense.
A loss under this directive includes:
The loss may be caused by [may be a result of] an offence under part X of the FAA (e.g., fraud, theft, bribery, collusion to defraud, etc.), misconduct, willful neglect of duty, negligence, accidents or Acts of God, involving any government activity, any activity on government property, or any government program, whether authorized or not and regardless of the amount involved.
An offense under Part X of the FAA includes action by a public officer to:
Reporting by the Employee
When an employee has reason to believe that a loss or offense has occurred, s/he shall immediately notify their supervisor in writing. Where the supervisor is suspected of causing a loss or committing an offense, the employee shall inform a more senior supervisor. The supervisor shall immediately notify:
|3.4||Reporting by the Department|
In addition to immediate notification of the Controller General and reporting under ss. 3.4.3 below, the Deputy Minister shall report in writing to the Comptroller General and Risk Management and Insurance, Department of Finance, within 30 days of the detection of a loss or offense identified in s. 3.1 and s. 3.2:
|3.4.2||Within 90 days from the detection of the loss or offense, the Deputy Minister shall report in writing to the Comptroller General any enhancements made to departmental internal controls in order to prevent repetition of the loss or offense. The Comptroller General may extend the time beyond 90 days if the Deputy Minister requests an extension in writing with substantiation of extenuating circumstances.|
|3.4.3||Within 10 days of the detection of a loss identified in ss. 3.1 (f), the Deputy Minister of the department sustaining the loss shall report in writing to Risk Management and Insurance for insurance purposes. Major losses identified in ss. 3.1 (f) (estimated to exceed $100,000) or any involving serious injury/loss of life shall be reported immediately by telephone.|
|3.4.4||In cases of supposed fraud or misuse involving a Government Credit Card, the Government Credit Card Coordinator (Government Accounting, FMBS) must be advised immediately to cancel or suspend the card with the Credit Card Company.|
|3.5||Consultation and Investigation|
The Comptroller General will review the particulars of each case involving a loss or offense and may inform and consult with one or more of:
|3.5.2||The Comptroller General shall decide if the RCMP should be informed and, if so, inform the Department of Justice. The Comptroller General may inform the RCMP directly or authorize the Audit Bureau, FMBS or the Deputy Minister of the department sustaining the loss to inform the RCMP.|
|3.5.3||A public officer may inform the RCMP directly in exceptional circumstances such as automobile accidents, robbery, break-in or willful damage. However, informing the RCMP does not relieve the officer and anyone else from fulfilling the requirements of this directive.|
|3.6.1||At the request of the Comptroller General, the Audit Bureau, FMBS shall conduct an investigation to determine the nature and extent of the loss or offense. The Deputy Minister of the department sustaining the loss shall assist in the investigation.|
|3.6.2||The Comptroller General may enter into a contract with an external organization to conduct the investigation.|
|3.6.3||As soon as the investigation is completed a final written report by the investigator must be made to the Comptroller General and the Deputy Minister of the Department sustaining the loss/offense.|
|3.7.1||When informed of a loss under this directive the Manager, Risk Management and Insurance, Department of Finance shall act immediately to comply with the terms and conditions of the Government Insurance Contract, including, if required, informing the Insurers of the loss. The Manager of Risk Management and Insurance shall inform the Deputy Minister of the department sustaining the loss and the Comptroller General of the relevant rights and responsibilities of the parties to the Insurance Contract.|
|3.7.2||Risk Management and Insurance, Department of Finance will review, and if necessary investigate, negotiate and settle all insurable claims regardless of policy deductible amounts. Any non-insurable claims may be referred to Legal Division, Department of Justice for further action as necessary.|
|3.7.3||Deputy Ministers will ensure that employees cooperate with Risk Management and Insurance, Department of Finance in the investigation, negotiation and settlement of claims.|
Non-insurance Recovery Action
|3.8.1||In addition to the process described in ss. 3.8.2, the Comptroller General and the Deputy Minister of the department sustaining the loss/offence shall decide if recovery action should be taken for any loss or offence identified as reportable to the Comptroller General under this directive. The Deputy Minister through the Legal Division, Department of Justice, may initiate where necessary, the recovery action and/or the penalties prescribed by the FAA Part X. The claims for recovery can only be for damages incurred which can be proven beyond a reasonable doubt.|
|3.8.2||The Manager, Risk Management and Insurance, Department of Finance and the reporting department shall decide if recovery action should be taken for losses identified in 3.1 (f), after consultation with the Legal Division, Department of Justice and the Employee Relations Division, FMBS if required.|
|3.8.3||Departments including their Boards and Agencies must not settle claims for damage to assets (nor settle claims made by third parties for damage they are alleged to have caused). Only Risk Management and Insurance, Department of Finance is responsible to deal with all insurable recoveries of money owing from a third party for deposit into General Revenues. Accordingly, with the exception of a Court Order of restitution or in cases of Fraud, any insurance recovery for damage to an asset must not be recorded as recovery of an expense and returned to the department's budget.|
|3.8.4||In cases of Fraud or Court Orders of Restitution, the loss as determined by the Court decision shall be immediately recorded by the department sustaining the loss as a receivable in the Government accounts in accordance with FAM Policy 4102.|
All communications to the Press or Media agencies regarding the loss or offense shall be made in accordance with Government Communications Policy 11.21 and in consultation with the Comptroller General.
Sharing Information with the Police
The Comptroller General may give an interim or final investigation report to the RCMP, whether the Audit Bureau, FMBS or a contracted investigator prepares the report.
Investigation Progress Reports
The Comptroller General may request, when necessary, information on the progress of an audit investigation, RCMP investigation, court action or recovery action from:
All losses under this directive will be reported to the Financial Management Board and the Legislative Assembly in accordance with section 51 of the FAA.
Loss of Personal Assets
Loss of personal assets (i.e., employee belongings) from Government premises is not covered by this directive. (The Government does not pay its employees for this type of claim unless it is legally liable).