Finance

Pursuant to the Assignment of Government Debt Regulations under the FAA a person proposing an assignment shall apply in writing to the Comptroller General in the manner stipulated in the Regulations.

To be eligible for consideration, an application submitted as described in Directive 3.1 must:

1. Specify the Government transaction (e.g., lease, contract or purchase order) from which the proposed assignment arises; and,
2. Pertain to an owed payment for which funds have been committed to an expenditure within the Financial Information System unless expenditure and disbursement are intended for a future fiscal year (e.g., as in a multiyear lease contract).

The Comptroller General shall, in writing, notify the assignor, assignee and departments responsible for payment of the acceptance or rejection of an application for assignment. A notice of acceptance must state:

1. That acceptance by the Comptroller General does not necessarily ensure payment to the assignee;
2. That if payment of any debt the assignor owes to the Government becomes overdue, assigned funds are subject to being deducted or withheld by the Government to set off the overdue payment or honour third party demands;
3. The amounts and payment due dates of any debts owed by the assignor to the Government; and,
4. Any intended set-off or third party payment.

The Comptroller General shall reject the assignment of any amount greater than the net debt owed by the Government after setoffs and settlement of third party demands.

An application for a conditional assignment may be accepted where assurance of payment to the assignee is in the interest of the Government. For example, the Government is waiting until construction is complete before it leases a new building while the building owner needs to borrow money in order to complete construction. As security on the loan, the lender agrees to a conditional assignment of lease money the Government will pay to the developer when it occupies the completed building. By accepting the conditional assignment, the Government enables construction to proceed in order to be able to occupy the building without delay.

Departments responsible for payment should provide the following if forwarding an application for an assignment to the Comptroller General:

1. The names, titles, locations and telephone numbers of the Government's contract authority;
2. Reasonable grounds for the assignment (e.g., to ensure that a supplier (assignee) is paid for goods or services supplied to a contractor (assignor) for use in the performance of a contract with the Government when the contractor is unable to provide other payment security satisfactory to the supplier); and,
3. The amounts and due dates of payments owed by the Government to the assignor.

An application for a general assignment of all debts owed by the Government to a person should usually be rejected.

Payments to an assignee should be in the same amounts and on the same dates as originally established for payment to the assignor unless a partial assignment reduces the payment amounts.