Effective: April 1, 2018
Applicable FAM Policies: 775 - Disbursements
Applicability: GNWT Departments and Public Agencies

INTERPRETATION

Payment Issuing Systems

Direct Deposit is the preferred method of payment of funds to Vendors. All Vendors should be encouraged and provided the opportunity to participate. The Department of Finance is responsible for the opening and closing of bank accounts

All payments are to be processed by the System for Accountability and Management (SAM) unless specifically permitted by the Comptroller General (i.e. Fur Price Program and Income Support). Controls relating to division of responsibilities for the authorization of payments, the signing of cheques, the distribution of cheques, and reconciliation of the bank account must be in place.

Adequate procedures shall be established to verify that:

1. There is proper authority for the expenditure;
2. The expenditure is in accordance with all relevant ordinances and regulations; and
3. The expenditure is within any limit set by law or by Financial Management Board direction.

Expenditure Officers and Accounting Officers must be designated for departmental cheque issue systems (manual or electronic).

Accounting and control procedures must provide for:

• Monthly reconciliation of the account by a staff member who receives the bank statement and cashed cheques directly from the bank;
• Handling of lost cheques and issue of duplicates or replacements;
• Handling of uncashed cheques (returned as undelivered or not returned);

Return to Department Cheques

Directors of Finance and Administration (or equivalent) shall request that eligible cheques be returned directly to their departments.

Departments shall maintain a register which includes a record of acceptance for all cheques returned to the department.

Payments eligible for issuance by cheques to Departments include the following:

1. Payments involving legal transactions Payments requiring formal presentation which are grants or other payments presented personally by a government representative,
2. Cash, which is required for immediate service for: i) Postage meter charging and other postal charges; ii) Customs clearance; iii) Sheriffs fees; or, iv) Petty cash advances and replenishments.
3. Payments which are delivered by courier.

Cheques must not be issued between departments.

The Comptroller General, or delegate, may exempt departments from the directives of this policy and authorize cheques to be issued to departments in other circumstances where warranted.