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About This FAM
| Responsible Agency: | Office of the Comptroller General |
| Issued: | Aug 2009 |
| Last Updated: | Aug 2009 |
1. Introduction
This policy outlines the scope and the definitions for the following series of policies on write-off, forgiveness and remission.
The following series of policies: FAM 2703, 2704 and 2705, applies to all departments of the Government. Public Agencies listed in Schedule A, B or C of the Financial Administration Act are governed by the appropriate sections under Part IX of the Act; or other enabling legislation.
Public Agencies that submit write-offs, forgiveness or remissions directly to the Financial Management Board (FMB) should follow the Guidelines in these directives to ensure a unity in rationale and content. Accounting Services, Department of Finance coordinates submissions to the FMB from Departments and Public Agencies.
FAM Policy 2704 “Forgiveness” and FAM 2705, “Remission” do not apply to those student loans which are forgiven or remitted in accordance with the Student Financial Assistance Act and the Student Financial Assistance Regulations.
The following definitions apply to FAMs 2703, 2704 and 2705.
2. Definitions
| “allowance for doubtful accounts” | means the best estimate of the amount of a debt, for which there is not reasonable assurance of collection considering all relevant factors. The allowance provides for a valuation of receivablts at their net realizable value. It does not represent a write-off of the accounts receivable. |
| “debt” | means an obligation to pay money or some other valuable thing or things to the Government and is recorded in its accounts. |
| “forgiveness” | mean the deletion of all or part of a debt that is rightfully due to the Government. Forgiveness cancels the debt and the Government’s right to collect. Forgiveness shall not apply to a debt resulting from a tax or penalty. For a tax or penalty, remission is required. |
| “penalty” | means a penalty, forfeiture or fine payable as the result of the contravention of an enactment concerning the collection of public revenues.1 |
| “remission” | means an agreement by the Government not to enforce the collection or payment of a tax or penalty. |
| “write-off” | means to eliminate the recorded amount of an asset or liablility for reasons other than the occurrence of a transaction.2 Unlike forgiveness or remission, a writeoff does not cancel the debt or the Governments right to collect the receivable. |
1 FAA 21(1), s.v. “penalty.”
2 CICA, s.v. “write-off.”
3. Policy
4. Directives
5. Authorities and References
6. Consequences from Failure to Comply
Failure to comply with policies and directives of the Financial Administration Manual may result in actions under Part X of the Financial Administration Act. The Government of the Northwest Territories may seek legal remedy in the Territorial Courts.