D. Payment Processing Procedures

D.1 Expense Authority Certification

Core Policy - 4.3

1. Further to policy 4.3.2, the expense authority may receive assistance from staff to fulfill his/her responsibilities. However, the expense authority is accountable for expenditure approval, and approval of payment requisitions for direct invoices (i.e., vendor invoices or items not matched to a purchase order or contract using iProcurement). Staff assistance includes:
   • requisitioning, account coding, and receiving of goods and services;
   • qualified receiver confirmation of goods and services received, agreement with support documentation, and completion of the electronic receipt (for an iProcurement invoice);
   • checking accounts for correct amounts, that GST is not charged, discounts and credits are taken, and item was not previously paid;
   • qualified receiver sign off of the direct invoice (or coding sheet/equivalent); and
   • filing support documentation and processing payments.
2. The expense authority approval is evidenced by a written or electronic signature. All other methods of signing or certification (such as rubber signature stamps, adhesive slips, or mechanically produced signatures, etc.) are prohibited.
3. Ministries shall ensure expense authorities are certain of their responsibilities when making the approval. For example, expense authorities should acknowledge (as part of signing the Expense Authority Specimen Signature Card), that they have read and understand the related financial policy and training bulletin. It is recommended that expense authorities review these areas at least once each year.
4. The Corporate Compliance and Controls Monitoring Branch, Office of the Comptroller General may at times request verification that an expense authority has, in fact, been exercised in accordance with financial policy.

D.2 Cheque Stub Printout

To ensure that the supplier receives adequate information to identify the payment, quote both the invoice number and account number where provided. In the absence of invoice and account numbers, quote the supplier's reference as indicated on the invoice (i.e., expenses incurred for the month of June 1998).

Quote invoice dates whenever this information may assist the supplier in identifying the payment. Where payment of a statement is acceptable, the statement date and account number should be quoted.

If an adjustment has been made to an amount payable, provide the reason for the adjustment (if the supplier has not already been notified).

Ministries may consider including their customer service contact and telephone number as part of the cheque stub information .

D.3 Contract Payments

Core Policy - 6.3.6

Ministries must ensure that a system is in place to provide the OCG with ready access to all contracts generated by that ministry.

Required Invoice Detail

Invoices for contracts must contain sufficient detail to be identified with the specific contracts. This will include information as per schedule "B" of the standard contract format. Suppliers are encouraged to use numbered invoices. Where a standard contract is not used, the invoice should, as a minimum, contain:

• the name and address of the supplier;
• the date of the invoice;
• a description of the services provided;
• the rate of pay (by the hour, day, etc.);
• the dates and/or hours being charged; and
• reference to the (non-standard) contract or agreement.

Note: Evidence of expenses incurred must be provided in support of expenses claimed. Documentation could include receipts/copies of receipts or itemized statements. Adequate controls in the ministry must be in place to prevent duplicate payments.

Expense Authority Responsibility

Expense authorities are responsible for ensuring that the invoice account verification procedures are carried out. Ministries shall use a contract summary or an equivalent record to administer and control invoice contract payments.

Contracts Without Invoices

Further to above, where the lease, rental, or other contractual agreement provides for a schedule of regular payments without invoices, expense authorities shall submit, in lieu of an invoice, an appropriate alternative supporting document with each payment request. This also applies to payments out of ministry bank accounts. Where expenditure agreements are subject to annual appropriations of funds, then the non-invoice payment terms must also be subject to the annual appropriation provisions.

Where a supplier elects to not send invoices after the original contractual agreement has been signed, and where the expense authority deems it not practicable to sign a formal contract addendum, the expense authority may submit, in lieu of a formal addendum, an appropriate alternative addendum document. For example, a copy of the supplier's notice of new payment terms, signed by an expense authority, will suffice. The expense authority shall submit an appropriate supporting document, in lieu of an invoice, with the first and with each subsequent payment request.

Ministries may not make such "non-invoice" payment arrangements for fee-for-service contracts, unless specifically approved by Office of the Comptroller General.

The supporting document(s) in lieu of invoices for "contracts without invoices" shall be:

• "Contract Summary" form (FIN 163) or
• a ministry designed "Non-Invoice Contract Summary" form.

If a ministry non-invoice contract summary form is being designed, ministries shall follow the requirements of Forms management.

Pre-authorized payment plans, or any other methods, in which a supplier generated withdrawal form charges a Province of BC bank account, are not permitted. Only Provincial Treasury and Office of the Comptroller General may make such arrangements.

Post-dated cheques are not generally permitted. In certain circumstances a designated officer of Provincial Treasury or Office of the Comptroller General may approve such transaction arrangements.

D.4 Payments in U.S. Funds

Payments in U.S. Funds to Suppliers Located in U.S.A.

Payments to suppliers located in the United States should be in US funds, unless otherwise specified. For all payments in US funds, payment requests will be drawn on the US$ Bank account. Cheques drawn on the US$ account are eligible for the United States clearing system; therefore, should not cause any difficulties to the US supplier.

When U.S. Dollar Value Exceeds Canadian Dollar

When the value of the US dollar exceeds the Canadian dollar, the payment request will be completed as follows:

1. Enter the amount of the cheque in US funds; and
2. Enter the US exchange rate as a premium and indicate the exchange amount as a credit to STOB 4612.

When the Canadian Dollar Value Exceeds U.S. Dollar When the value of the Canadian dollar exceeds the US dollar, use the procedures in a) above with the exchange amount shown as a debit to STOB 4612.

Social Service Tax

When paying for goods subject to social service tax where the supplier is not registered to collect the tax, a direct credit must be made to revenue STOB 4006 for the amount of the tax. The tax is calculated on the Canadian value of the purchase.

Transactions of CA$ 50 (equivalent) up to US$ 50,000

To process payments of CA$ 50 (equivalent) to US$ 50,000 payable in US funds and destined for a supplier located in the United States, ministries will use the quarterly US exchange rate as provided by the Financial Management Branch, Office of the Comptroller General. Rate changes will be transmitted by electronic memorandum to ministry contacts before the quarter and earlier if the quarterly rate requires adjustment.

Note: Ministries are advised by email of rate changes. Exchange rates are posted at http://www.fin.gov.bc.ca/ocg/fmb/manuals/CPM/us-exch.pdf

Transactions of US$ 50,001 to US$ 99,999

For payments of $50,001 to $99,999 in US funds and destined for a supplier located in the United States, on the day the payment is to be made, ministries will obtain a daily rate of US exchange from the Bank of Canada website or contact the Payments Manager, Banking/Cash Management Branch at (250) 387-7110. The ministry will use the US exchange daily rate to determine the Canadian equivalent of the US funds required.

Transactions of US $100,000 to US $4,999,999

The ministry must notify Provincial Treasury, Banking/Cash Management Branch, of the amount in US funds required at least 48 hours before the payment day. On the day the payment is to be made, the ministry must obtain the US exchange daily rate from Provincial Treasury, Banking/Cash Management Branch to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Payments in US Funds to Suppliers Located In Canada

Periodically, Canadian suppliers will request payment in US funds. Prior to processing such requests, ensure that the payment amount in equivalent Canadian funds is not acceptable.

Transactions of CA $50 to US $50,000

To process payments of CA $50 (equivalent) to US $50,000 payable in US funds to Canadian suppliers, the payment request is treated as a normal US payment using the quarterly US exchange rate.

Transactions of US $50,001 to US $99,999

To process payments of $50,001 to $99,999 payable in US funds to Canadian suppliers, on the day the payment is to be made, ministries will obtain a daily rate of US exchange from the Bank of Canada website www.bankofcanada.ca or contact the Payments Manager, Banking/Cash Management Branch at (250) 387-7110 t. The ministry will use the US exchange daily rate to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Transactions of US$ 100,000 to US$ 4,999,999

The ministry must notify Provincial Treasury, Banking/Cash Management Branch, of the amount in US funds required at least 48 hours before the payment day. On the day the payment is to be made, the ministry must obtain the US exchange daily rate from Provincial Treasury, Banking/Cash Management Branch to determine the Canadian equivalent of the US funds required. The payment request will be treated as a normal US payment.

Transactions Payable in US Funds for US$ 5,000,000 and More for Suppliers Located In Canada and United States

Ministries must notify Provincial Treasury, Banking/Cash Management Branch, well in advance for special arrangements to requisition US fund payments for such very large amounts. It may take from five to fifteen days to free up the short-term investments for such large amounts.

D.5 Payments to Foreign and Out-of-Province Suppliers

Payments to suppliers in foreign countries other than in the United States should be made in that country's currency (i.e., England-pound sterling, France-French franc, etc.). However, when an invoice specifies payment in a currency other than that of the originating country, payment may be requisitioned in the specified currency. For example, a supplier from England may request payment in US funds.

Where practicable ministries will make payments in Foreign Funds either from petty cash for amounts up to the petty cash transaction limit (Canadian equivalent), or from the SFO Bank Account for amounts up to CA$1,000 (Canadian equivalent), by purchasing money orders or drafts, preferably from the Provinces principal banker.

Social Service Tax

When paying for goods and services that are subject to the Social Service Tax, and the supplier is not registered to collect the tax, a direct credit must be made to Revenue STOB 4006 for the amount of the tax. The tax is calculated on the Canadian value of the purchase.

This applies to out-of-province, as well as foreign purchases.

Application of Exchange Rates

The applicable exchange rate must be applied to the invoice to determine the Canadian equivalent (CA$). The ministry should contact the Payments Supervisor, Banking/Cash Management Branch at 250 387-7111. Ministries shall specify the amount of foreign currency when obtaining the exchange rates. Provincial Treasury will book the monies with the bank at the daily rate of foreign exchange.

Exchange Rate Requests

Requests for exchange rates must be received by Provincial Treasury by 9:00 a.m. of the day the payment is to be processed or one business day prior to the payment. Ministry officers should be made aware that the bank will not cancel the booked daily rate of foreign exchange. The Province must absorb the gain or loss if the cheque is not presented to the bank for payment on the date that the rate is booked.

Canadian Fund Requests

When foreign suppliers request payment in Canadian funds, show the invoice amount in Canadian funds and the exchange rate as "NIL".

D.6 Certification – Invoices and Other Supporting Documents

Core Policy - 4.3.4

Supporting documentation shall include: original invoices, letters (memorandums) authorizing payments in specific amounts (i.e., for grant payments), Treasury Board approvals, petty cash replenishment reports, business expense approval forms, accountable advance applications, waybills (or equivalent), packing slips, etc.

• Where invoices are required by contract and/or by Treasury Board policies, ministries shall submit original invoices with the payment requests.
• All invoices or other claims for payment must be date stamped immediately upon receipt with a stamp clearly identifying the ministry (CPPM 4.3.8.2). It must be clear that the date refers to the date the claim for payment was received and not the date of certification for contract performance or expense authority.

The Purchasing Card is the primary instrument for making small dollar value purchases. In lieu of using the card, an invoice may only be accepted from a merchant when:

• it is in government's best interest to deal with that merchant;
• the merchant is unwilling to accept the Purchasing Card; and
• the invoice is requested by the Cardholer and made out to the ministry.

Required Information

Invoices/supporting documents shall contain the following information:

• the name and address of the supplier (or recipient);
• the name of ministry and address where goods or services supplied;
• the date of the invoice (or other claim for payment);
• description of goods or services being charged:

Invoices for goods shall show:

• a description of each item purchased,
• the cost per unit;
• the quantity purchased; and
• the number of the purchase order authorizing the sale.

Invoices for services shall show:

• a description of the services provided;
• the rate of pay (by the hour, day, etc.);
• the number of hours/days;
• the hours/dates being charged;
• reference to a contract or agreement;
• if the invoice is for delivery charges, then a copy of the waybill (or equivalent) is required; and
• if the invoice is for air travel, then the departure and arrival date/time of each trip and the name of each employee travelling must be shown.
• the total amount charged.

Note: Only current charges will be processed for payment in the normal manner; charges to old year in April require separate batching/grouping. An adding machine tape is required where there are multiple invoices.

Non-acceptable Invoices/Claims for Payment

The following documents are not to be used in lieu of an original invoice for initiating payment to a supplier:

• packing slips or waybills;
• work orders;
• counter slips (where an invoice is subsequently billed by the supplier);
• facsimiles and photocopies of invoices or duplicate invoices unless a thorough investigation has been carried out to ensure that previous payment has not been made and the invoice is certified accordingly, by affixing the rubber stamp certification or written certification: "Certified that this copy has not been previously passed for payment."
• statements.

Note: Exceptions to payment of a statement include those issued with original waybills or charge slips, and where the company does not issue an invoice.

Early Payment Discounts

The acceptable discount rate for early payments of invoices under the CPPM 4.3.8 #8 is 2% or greater. (Note: An early payment discount is not required for early payment if the payment date is set by contract).

Early payment should only be taken provided the discount amount will exceed the cost of "fast tracking" the payment (approximately $12.50) plus the foregone interest (invoice amount X prime interest rate X [number of days remaining to the normal payment date divided by 365]).

D.7 Travel Charge Direct Billings

Core Policy - 10.3.17

The following travel charges may be billed directly by suppliers to ministries and paid on a payment request form:

• Air travel invoices (includes airline "quick tickets").
• Accommodation expenses incurred by ministers and parliamentary secretaries.
• Taxi company invoices:
  • incurred by designated employees in "travel status", and
  • incurred by employees "not in travel status" where ministries have made billing arrangements with taxi companies to charge for transportation within their headquarters' area location or geographical location, and
• Board and lodging expenses exempted by Treasury Board Regulation or Directive:
  • incurred by ministries for employees, when not in travel status, assigned to temporary headquarters where board and lodging are arranged and supplied by the Employer in either Employer-operated camps or by means of local community services.

Charges billed directly to ministries must be exclusive of GST. Provide the certification clause (see B.6) to suppliers where necessary.

The expense authority must ensure that:

• The person who travelled has been authorized to incur the expense;
• It is certified that services have been rendered (ministries will determine how this certification is done); and
• The direct billing is not being claimed on a travel voucher and has not been previously claimed on a payment request form.

D.8 Payments of Deputy Minister Car Allowance

Each deputy minister (and associate deputy minister), who does not have an automobile provided by the Government, is entitled to an annual allowance of $6,960 to defray the costs of using a personal vehicle for business purposes.

Canada Revenue Agency has determined that this allowance is taxable to the extent of that portion of the allowance that is not expended on business travel.

The full amount of the allowance must be included in the individual's taxable income and reported on the employee's T4 slip. The total amount is subject to payroll deductions of tax, CPP contributions and EI premiums.

When completing his or her individual income tax return, the employee can deduct the relevant expenses provided they are deductible under paragraph 8(1)(F) or 8(1)(H) of the Income Tax Act and the employee files Form T2200, Declaration of Conditions of Employment.

The individual is responsible for submitting any offsetting claim for business automobile travel by personal vehicle when submitting a tax return. The offsetting claim for business use when submitting a tax return must be supported by receipts and a daily log of kilometres travelled for business purposes.

The ministry senior financial officer is responsible for preparing a letter authorizing payment for each deputy minister (and associate deputy minister) receiving a car allowance. Each letter of authorization is to be submitted to the payroll office for processing prior to the first bi-weekly or monthly payment. The senior financial officer is required to notify the payroll office to end payment when the deputy minister (or associate deputy minister) ceases employment.

STOB 5220 - Taxable Benefits has been added to the CHIPS Account Code Table effective July 9, 2000. Deputy minister car allowance payments are to be coded to this STOB. Enter STOB 5220 in the account code field on the payline.

Note: The vehicle distance allowance does not apply when a deputy minister or associate deputy minister elects to receive a vehicle allowance.

D.9 Electronic Deposit of Payments

D.9.1 Electronic Deposit of Payments to Supplier

D.9.2 Returned / Rejected Electronic Deposits

D.9.3 Recall of Electronic Deposits

D.9.1 Electronic Deposit of Payments to Suppliers

Electronic deposit of payments to suppliers is the Province of B.C.'s preferred method of payment. Ministries should encourage general and employee suppliers to receive payment by electronic deposit: 

• to reduce cost;
• to ensure the timely and secure delivery of payment; and
• to assist in meeting the Province's environmental initiatives (where electronic deposit is combined with receipt of payment statements by email)

• general and employee suppliers’ bank account data has been established in the CAS Supplier Maintenance data base;
• payments are made in Canadian dollars; and
• the suppliers’ bank account is held at a financial institution within Canada.

3. Requests to update the supplier maintenance bank account module need to be completed by use of a Direct Deposit Application Form (FIN312).

4. Original signed forms need to be submitted for processing to minimize the potential for fraud and financial loss to the province.

5. Ministries need to ensure that forms (or copies) are maintained and transferred in a secure manner to guard against any unauthorized release of personal information.

6. Ministries can obtain printed forms from the Office Products Centre (OPC 7530951069) to provide to suppliers, or use the fillable Direct Deposit Application Form (FIN 312) pdf. Refer to the OCG - Financial Forms site and follow the instructions to complete the form,                           or Provincial Treasury, Payment Services for additional information.

7. Agency roles and responsibilities with respect to handling and processing the Direct Deposit Application Form (FIN 312) are as follows:

Ministry CAS Contacts for Supplier Maintenance:

• for review, accuracy and authorization of the forms
• to submit forms to Provincial Treasury, Payment Services

Provincial Treasury, Payment Services:

• for review to ensure that banking information meets Canadian Payment Association (CPA) requirements, and to accurately enter and maintain the bank accounts in accordance with the authorized form
• responsible for the receipt, review and release of electronic payment files, excluding the specific payments/receipts data within those files
• for the maintenance of the CPA Bank/Transit file and providing updated CPA account validation edits
• to forward forms on to CAS

CAS Security and Data Administration:

• for form review to ensure that supplier information is current and valid
• to link bank account information to individual supplier number
• to maintain, file & archive the original form and supporting documentatio

D.9.2 Returned / Rejected Electronic Deposits

Periodically, electronic deposits cannot be made in line with the banking information on file, and are rejected and returned to the Province.

1. Provincial Treasury Payment Services receives notification of returned electronic deposits and notifies the issuing ministry financial services' contact (by fax or email). The notification includes:

• payment detail information;
• reason for return; and
• confirmation that the banking information has been inactivated and voided in CAS oracle.

2. As required, ministries may issue a replacement payment by cheque following the process outlined in the CAS Oracle AP User Manual, Chapter 6.

D.9.3 Recall of Electronic Deposits

Ministries may require an electronic deposit to be recalled after the payment has been created and released to Provincial Treasury.

1. Only an authorized ministry financial service representative can request Provincial Treasury to recall an electronic deposit by forwarding the request by email, and by providing the:

• reason for recall;
• oracle a/p payment number;
• payee/supplier name;
• amount; and
• payment due date.

2. Recall requests need to be received by Provincial Treasury not later than 10 am on the business day prior to the payment due date.

3. Provincial Treasury confirmation of the recall will be forwarded to the ministry contact by returned payment notification once the payment has been returned and credited to the Province (generally the business day after due date).

D.10 Cheque Enquiry/Stop Payment/Replacement Cheque Procedures (FIN 358)

D.10.1 Overview of Replacement Process

D.10.2 Indemnity

D.10.3 Handling of Cheques Where Replacement Cheques Have Been Issued

D.10.4 Stale-Dated Cheques

D.10.5 Cashed Cheque Photocopy Requests

D.10.6 Forged Endorsements

D.10.7 Returned Undeliverable / Unclaimed Cheques

D.10.8 Procedures for Replacing Government Agent Cheques

D.10.9 Procedures for Replacing Government Payroll Cheques

Cheque Management is the process of identifying the Province's paid and outstanding cheques, co-ordinating stop payments with the Province's banker and requisitioning replacement cheques in a systematic manner so as to avoid duplicate payments.

The FIN 358 form is designed to amalgamate and streamline the processing and information requirements of Provincial Treasury when conducting cheque enquiries, stop payments, replacement cheques and payment cancellations. The purpose of the form is to consolidate all pertinent cheque information, thereby enhancing financial controls and reducing the response time to ministries and suppliers. Six months worth of data is available to ministries through online access to the cheque enquiry function of Provincial Treasury's Cheque Management System (CMS).

The cheque replacement procedures differ when replacing Government Agent or Government Payroll cheques.

If a cheque is lost in the banking system, ministries should contact the Payment Supervisor, Provincial Treasury for further instructions.

Ministries are to complete the appropriate areas of the FIN 358 and forward the form to Payment Services, Provincial Treasury, 620 Superior Street, Victoria, BC. Please ensure that the ministry contact name, ministry name and telephone number fields are filled in. Ministries should complete the first paragraph on the FIN 369 form prior to sending to the payee for completion.

Ministries should wait at least 10 calendar days from the cheque issue date to initiate enquiries (this waiting period is waived for payroll cheques). This allows for a reasonable period of time for processing and delivery by Canada Post. Where theft and/or fraud are suspected or where the original cheque has been destroyed, the 10-day waiting period will be waived. Fax the completed FIN 358 to Provincial Treasury at 250 953-4765. The original FIN 358 will need to be received by Provincial Treasury before the CAS Oracle Void will be completed.

If the elapsed time from the cheque issue date is less than six months, ministries may access Provincial Treasury's Cheque Management System (CMS) to determine the status of a cheque (cashed, returned, stop payment or outstanding). Where more than six months have elapsed, ministries must submit the completed FIN 358 to Provincial Treasury. Contact the Payments Manager, Provincial Treasury for information regarding CMS Online access (250 387-7110).

Provincial Treasury will return the FIN 358 indicating the results of the enquiry back to the ministry. If a Stop Payment/Replacement is required, the same form may be used as long as the white and canary parts of the form are intact.

For a cheque replacement, ministries are encouraged to use the CAS Payment Inquiry function via CAS Oracle online prior to completing the FIN 358 for replacement processing. For any payment that can be found via the CAS Payment Inquiry, ministries will use X special handling to cross-reference the original payment. For any payment that cannot be found online, ministries will use D special handling and will notify Provincial Treasury via the FIN 358.

D.10.1 Overview of Replacement Process

CAS Ministries – All replacement payments issued by a CAS Oracle online ministry must be processed through the Accounts Payable Invoice form. Replacement payments will be generated in overnight processing unless the Payment Type was identified as "DAY" (same day cheque). Refer to the CAS Oracle User Manual, Chapter 7.

The ministry completes the FIN 358 and Indemnity form (FIN 369) and forwards to Provincial Treasury. Provincial Treasury inputs the stop payment, voids the original cheque on CAS Oracle, retains the FIN 369 and yellow copy of the FIN 358, and returns the white copy of the FIN 358 to the ministry as confirmation of the stop payment.

Provincial Treasury delays voiding a payment until the paid cheque file for the stop payment date has been received. The paid cheque file received from the Province's banker is approximately two days in arrears. Once a payment void has been completed in Oracle, it cannot be reversed.

Once the stop payment is confirmed, the ministry inputs the invoice for the replacement cheque on CAS Oracle using the Invoice form. Provincial Treasury keys in replacement details onto the Cheque Management System and mails the replacement cheque to the payee.

If the original payment was issued through CGI or Walker, the replacement must be coded to CL XXOCG (where XX is the ministry prefix) 00000 3006 XX00000 (where XX is the ministry prefix) 000000 0000 (accounts payable liability). The original payment information must be referenced and special handling code "X" must be used if the original payment is listed on the CAS Payment Inquiry tables (for replacing a CGI or Walker payment to the same payee and supplier number).

If the original payment was issued via Oracle in FY00 (1999-2000), the replacement must be coded to CL (client segment value) XXOCG (where XX is the ministry prefix) 3006 XX00000 (where XX is the ministry prefix) (accounts payable liability). The original payment information must be referenced and special handling code "X" must be used.

If replacing a US cheque, use STOB 3006.

Special handling code "D" must be used for replacing any payment for which the original payment information is not listed in the CAS Oracle CAS Payment Inquiry tables.

When the base supplier number, payee name and/or payment amount are different a ministry cannot cross-reference the original payment issued in the wrong name and/or amount. The ministry must cancel the original invoice and enter a new invoice for the base supplier in the correct amount and a new "original" payment is issued.

D.10.2 Indemnity

The Indemnity form (FIN 369) has been designed to update and clarify the indemnification process. The Indemnity provides legal protection for the Province should the original cheque be cashed after a replacement has been issued. Its purpose is to indemnify the Province against duplicate payments. By signing the Indemnity, the payee is stating that he/she has either never received, or received and subsequently lost the original cheque and should it be found, it would not be presented for payment.

D.10.3 Handling of Cheques Where Replacement Cheques Have Been Issued

Ministries periodically recover cheques that have been reported missing and for which replacement cheques have been issued. These cheques must not be redeposited on a Deposit Form since a cheque that has a stop payment on it cannot subsequently be cashed. These cheques are also removed from the outstanding cheques list at the time the replacement cheque is issued. The correct procedure is to write "Cancelled" across the face of the cheque and return it to Provincial Treasury with a covering memo stating a reason for the return. Provincial Treasury will forward payroll cheques to Payroll Accounting, Corporate Human Resource Information and Payroll System (CHIPS) Office, BCPSA.

If a Deposit Form is inadvertently processed in error for an original cheque that has been replaced, the Bank Reconciliation Section, Office of the Comptroller General, will originate an adjusting bank reconciliation journal voucher. The ministry primary contact will be sent this journal voucher to obtain approval and will be expected to return it by the indicated return date.

If the replacement and original cheque are both cashed by the payee it is the responsibility of the ministry to obtain reimbursement from the payee. The accounting procedures for this situation are as follows:

• Since the Bank Reconciliation Section, OCG, is usually the first to be aware that an original and replacement have been cashed, they will originate an adjusting bank reconciliation journal voucher crediting the appropriate bank account.
• The journal voucher will be sent to the ministry's primary contact for completion of coding for the debit amount and for authorization. The ministry debit should be entered to a ministry receivable account. The journal voucher is to be returned to the Bank Reconciliation Section, OCG, for processing.
• When repayment is received from the payee, the ministry will credit the receivable account on a Deposit Form.

D.10.4 Stale-Dated Cheques

a) Cheque Handling

Ministries should not hold any cheques issued by the Province that have been returned to them for any reason, or that cannot be forwarded to the payee. If the payee cannot be located, or is not entitled to the cheque, it should be cancelled by Provincial Treasury using the FIN 358 form.

Unclaimed Payroll cheques are to be forwarded with a memo to Payroll Accounting, Payroll Operations and Information Management Division, BCPSA.

b) Cheque Replacement

The industry standard of a six-month stale date policy applies to all of the province's accounts (effective June 1, 1996). Therefore, ministries will be required to issue replacement cheques for any stale dated cheques (i.e., over six months old).

Note: If the original cheque is available, it can be used in place of the Bond of Indemnity and must be attached to the FIN 358.

D.10.5 Cashed Cheque Photocopy Requests

FIN 358 will automatically be returned to the ministry with the enquiry results. This form provides all information relevant to cashed cheques, including the date cashed. However, ministries may on occasion require a photocopy of the front and back of the cheque. Photocopies are available on a request basis.

Ministries are asked to forward a memo to the Cheque Management Clerk, Provincial Treasury with the following information: cheque payment number, cheque stock type, amount, payee and cashed date.

Note: The cashed date is found on the bottom left hand corner of the returned FIN 358 or date paid on the online Cheque Management System.

D.10.6 Forged Endorsements

a) Overview "Forged Endorsement" means an endorsement in the name of the payee that is not made by that person nor by someone authorized to sign on that person's behalf, but does not include an endorsement in the name of a payee when the payee name on the face of the item has been altered without authorization." Canadian Payments Association Rule A4

b) Initiation of a Forged Endorsement Claim: To initiate a claim the issuing ministry has to forward a request to:

Provincial Treasury Treasury Payment Services PO Box 9414 Stn Prov Govt Victoria, BC V8W 9V1 Fax #250.953.4765 Email: FIN PT BCM CHQ

c) Forged Endorsement Proceedings

After reviewing the claim, Treasury Payment Services (TPS) will determine:

• Reject claim - provide rejection notification to requesting ministry contact
• Accept claim - forward forged endorsement declaration to requesting ministry

Upon TPS accepting the claim, the ministry is required to send the forged endorsement documents to the payee to complete and sign in the presence of a Notary Public, a Canadian Law Enforcement Officer or a Commissioner for Taking Affidavits.

The completed documents are to be returned to TPS (see address above) no later than 5 months from the date the claim was initiated.

See the Provincial Treasury Intranet (government access only) for more information on forged endorsement claims.

d) Issuance of a Replacement Cheque Payment TPS will return the original cashed cheque and declarations to the negotiating Financial Institution (FI)., Provincial Treasury allows 10 business days for the FI to trace the cashed cheque before recording a "stop payment/payment cancellation" and voiding the cheque payment in CAS Oracle.

When confirmation is received from the FI, TPS will notify the requesting ministry to initiate a replacement cheque.

Refer to CPPM D.10.1 for additional information on the Stop Payment/Replacement Process.

D.10.7 Returned Undeliverable / Unclaimed Cheques

a) Description Province of BC Cheque payments that cannot be delivered by Canada Post are returned to Provincial Treasury Payment Services (TPS). TPS records each "Returned Undeliverable" cheque payment in the cheque data management system (CHQ). b) Notification of Returned Cheques TPS forwards a Returned Cheque Report (CHQ05) to the issuing ministry the business day after the cheque has been recorded in CHQ. Province of BC US Cheques: are recorded in CHQ and then remailed to the issuing ministry Province of BC Payroll Cheques: will be redirected to the employee if a new address is available in the Province of BC Global address book. If no address is available the cheque will be returned to Solutions BC, Payroll Services. c) Disposition of Returned Cheques Ministries are responsible for determining the disposition of their undeliverable returned cheques. Ministries are asked to make every effort to check the accuracy of the payee address on the issued cheque payment. On the Returned Cheque Report there is a space provided for "Instructions for Disposition". Note: Ministries can view the address on the issued cheque payment by viewing the payment information on CAS Oracle.

• Remail to same address

If after contacting the payee, it is determined that the address on the cheque is correct, the instructions to Provincial Treasury will be "Remail to Same Address".

Note: Provincial Treasury will not remail to the same address more than once.

• Remail to new address

If, after contacting the payee, a new address has been obtained, the instructions to Provincial Treasury will be "Remail to New Address". Staple a self-adhesive label typed with the new mailing address (including payee name) to the report and return to TPS.

• Payment cancellation

If the ministry has determined that the payment is no longer valid or required, attach a completed FIN 358 Stop Payment/Replacement/Payment Cancellation Form to the CHQ05 Report and return to TPS. Note: Refer to CPPM D.10 for additional information on Stop Payment /Replacement process

• Remail to ministry

A ministry may request TPS to remail a returned cheque payment to the ministry if they determine that the cheque payment requires special handling to deliver the cheque to the payee. d) Returned Undeliverable – Posted / Added to Unclaimed If, after 120 calendar days (from the date the cheque was recorded in CHQ), no action is taken regarding a returned cheque, the returned cheque will be posted to the Provincial Treasury's Unclaimed Account. A copy of the "Cheques Posted to Unclaimed Report" is forwarded to the issuing ministry for review and action. If no action is taken by the ministry after 10 calendar days, the cheque is deposited to Provincial Treasury's Unclaimed Account. Note: Once a cheque payment has been added to unclaimed, TPS cannot remail the cheque to the supplier or cancel the payment.

• Recovery of Payments added to Provincial Treasury's Unclaimed Account

Should a ministry determine that the cheque payment is no longer valid or if the ministry is contacted by the supplier after a cheque has been added to Provincial Treasury's Unclaimed Account, the ministry can recover the funds by submitting a request by email to Treasury Payments Services (TPS). The ministry is to provide the original cheque payment information and ministry service line coding.

D.10.8 Procedures for Replacing Government Agent Cheques

The Government Agent who originally issued a cheque can issue a replacement cheque upon receipt from the originating ministry of the Cheque Inquiry/Stop Payment/Replacement form FIN 358 with "stop payment confirmed" and an original completed Indemnity form FIN 369.

If the cheque is stale dated (i.e., cheque issue date is over six months old) and attached to the FIN 358 in lieu of the Bond of Indemnity FIN 369, the "stop payment confirmed" can be waived.

If the originating ministry will be processing the replacement via CAS Oracle online, the replacement process described earlier in this chapter is used.

If the originating ministry will be replacing the cheque through the Government Agent, the stop payment/replacement action on the FIN 358 must be marked (section A) for Provincial Treasury to return the original to the originating ministry. Provincial Treasury will retain a file copy. This process can be completed by fax to Provincial Treasury at 250 953-4765. Provincial Treasury will action the stop payment and void the original payment in Oracle upon confirmation from the bank. Ministries can confirm the stop payment online by accessing Provincial Treasury's Cheque Management (CMS) System.

When the stop payment has been confirmed by the return of the FIN 358 form from Provincial Treasury or by online enquiry, the originating ministry should request the payee to complete and sign the Indemnity form FIN 369. The originating ministry will complete sections A, B, C and D (payee name, supplier code and cheque stub printout from original cheque). The replacement cheque account coding for each ministry will be CL ##OCG 00000 3006 ##00000 000000 0000. The originating ministry retains a copy of the FIN 358; the original FIN 358 and FIN 369 should be forwarded to the Government Agents office where the original cheque was issued.

The Government Agent will produce the replacement cheque (section E), and will mail to the address shown on the Indemnity form.

The Government Agent will issue a replacement batch number, batch the original white FIN 358 and the original Indemnity form FIN 369 to Provincial Treasury. Provincial Treasury will only remove the original Indemnity form and update the CMS with the replacement cheque details. The FIN 358 and batch ticket will be returned to the originating ministry for keying. If a stop payment or payment void has not been completed, Provincial Treasury will complete the necessary actions at this time.

The Government Agent's office will retain a copy of the FIN 358 and fax a copy of the batched Stop Payment Replacement Form (FIN 358) and the Indemnity (FIN 369) to the originating ministry office.

The ministry must then process the information as a replacement payment using a GA MAN pay group, cross-referencing the original payment.

D.10.9 Procedures for Replacing Government Payroll Cheques

Contact the Cheque Management Clerk, Provincial Treasury to initiate "stop payment."

Within the Capital Regional District (Victoria) forward the completed Cheque Enquiry/Stop Payment/Replacement form (FIN 358) and the original completed Indemnity form (FIN 369) to the Cheque Management Clerk, Provincial Treasury, 620 Superior St., Victoria, BC. Provincial Treasury will confirm the stop payment and forward the FIN 358 to the Corporate Human Resource Information and Payroll System (CHIPS) Office, PSERC. The CHIPS Office will approve the replacement cheque and process the request for the net amount on the bond of indemnity (payroll cheques are replaced by general account cheques).

Outside the Capital Regional District the ministry may request a Government Agent advance. Forward the completed FIN 358 (complete replacement cheque details) and FIN 369 to the Cheque Management Clerk, Provincial Treasury. Provincial Treasury will confirm the stop payment and return the FIN 358 to the originating ministry.

D.11 Batch Release

Core Policy 4.3.3

Batch Release of payment is permitted for high volume transactions from program areas where EA and QR are not recorded electronically, or where legacy systems remain in use.

Ministry batch releasers do not have expense authority, but can be best positioned to ensure efficient and timely payment of transactions on behalf of an EA. The ministry senior financial officer has the responsibility to ensure that the financial control framework is preserved and the use of Batch Approval:

• is supported by appropriate procedures and compensating controls;
• is restricted to a limited number of users;
• will be for business processes that would otherwise require Force Approval or the use of an Administrative EA and will not circumvent iProcurement initiatives;
• provides segregation of incompatible duties; and
• includes supporting and verifiable EA and QR original documentation.