Control

6.1.1 Ensuring that effective management practices and controls are established, which specifically involves the following:

• The proper classification and accounting of SPAs that record special purpose money and other SPAs, under the appropriate legislative or other authorities, are determined in consultation with the Office of the Comptroller General;
• The uses of standing authorities for all SPAs in the accounts of Canada and Public Accounts are accurately maintained and reported;
• A periodic review is undertaken of the continued relevance of the authorities used to open and maintain all SPAs, whether an act or other legal instrument (e.g., a trust agreement, treaty or contract) for SPAs that record special purpose money or specific legislation for any other SPAs;
• A complete audit trail, which allows all transactions related to special purpose money and other SPAs to be tracked, is maintained and available for review;
• Complete documentation is maintained (e.g., agreements, accounting notes and manager training documents); and
• Records of amounts relating to various projects or agreements and sources of funds in subsidiary accounts of special purpose money or other SPAs are kept and reconciled monthly with the account in the accounts of Canada.

General

6.2.1 Monies received for a special purpose and amounts collected or prescribed as credits under statutory benefit programs or for other statutorily specified purposes, are recorded in separate accounts in the accounts of Canada and reported separately in the Public Accounts of Canada.

6.2.2 All amounts credited to SPAs, whatever the source, are managed as public money. Accordingly, all regulations, policies and directives relating to the control of receipts and expenditures apply to funds received, credited and paid out for a special purpose or a specified purpose.

6.2.3 Any request to the Receiver General to open an SPA, including accounts recording special purpose money, is submitted according to Receiver General Directive, 1997-6, and clearly identifies the following:

• The relevant authority to open the account:
  • For accounts recording special purpose money, the authority will be the act, trust, treaty, undertaking or contract under which the money is to be received or collected; and
  • For any other SPAs, the authority will be the specific legislation that either expressly creates the account or implies authority for its creation.
• The standing authority (i.e., statutory appropriation) that will be used to make payments out of the CRF and charge them to the account:
  • For accounts recording special purpose money, the authority will be subsection 21(1) of the Financial Administration Act in the absence of any other specific statutory appropriation; and
  • For other SPAs, the authority will be a specific statutory appropriation.

6.2.4 Processes are set up to prevent insufficient balances from occurring, including the establishment of a hold period for cheques and money orders to avoid NSF and fraud.

6.2.5 In accordance with FAA section 21, disbursements are not made from the account if there are insufficient funds at the time the payment is to be made and accounts do not go into a debit balance, unless authorized by legislation.

6.2.6 Goods and services tax (GST) and harmonized sales tax (HST), payable on expenditures that are charged to SPAs that record cost-sharing agreements are charged to the SPAs instead of the GST/HST refundable advance accounts. (Refer to section on 9.1.4 "Cost-Sharing and Joint Project Agreements" in the Financial Information Strategy Accounting Manual.)

6.2.7 Precise accountability statements are developed and documented for each manager responsible for administering specific cost-shared agreements, other similar arrangements as well as gifts, donations, bequests, contributions and endowment funds.

Recording of special purpose money

6.2.8 An SPA is opened to record special purpose money only if all of the following conditions are met:

• A direct link exists between the money received or collected from an outside party and the amount to be disbursed and the purpose for which the money will be disbursed is known at the time of receipt;
• No additional amounts, other than interest, are to be paid by or charged to the federal government as part of the arrangement relating to special purpose money;
• No payment of statutory benefits to outside parties is intended or anticipated (e.g., not a government program); and
• A liability or an obligation exists to the outside party.

6.2.9 Interest on amounts credited to SPAs that record special purpose money is authorized by specific statute or, in the absence of such authority, allowed under subsection 21(2) of the Financial Administration Act at rates fixed by the Minister of Finance with Governor-in-Council approval.

6.2.10 Special purpose money received is not used to replace or avoid seeking the authorities required for cost-recovery activities (e.g., where fees for goods, services or the use of facilities would normally be charged). A department that has received special purpose money could, however, use the services of another department with special revenue spending authority to carry out or supply the special purpose activity.

6.2.11 Special purpose money is not used to reimburse departmental operating costs (e.g., salaries of government employees) incurred in a cost-shared (joint) project, joint venture, federal-provincial or other arrangement.

6.2.12 Special purpose money may only be accepted by a department when the special purpose activity is within the department's mandate.

6.2.13 Donations are:

• Used for purposes consistent with the department's mandate and cannot be transferred to offset an expenditure from a voted authority or applied toward the cost of ongoing operations chargeable to an appropriation, such as, salaries, wages and public service employee benefits;
• Used as appropriate to hire temporary staff, consultants or contract personnel, provided that payment for these services is made from the CRF and charged to the account in which the funds have been recorded as special purpose money; and
• Not transferred from an SPA to a departmental appropriation

6.2.14 Once the objective for which special purpose money was received has been realized:

• The balance of the account, if any, is to be returned in accordance with the Repayment of Receipts Regulations; or
• The balance of the account will be transferred to a miscellaneous revenue account if, in accordance with the statute, trust, treaty, undertaking or contract under which the money was received, there is no obligation to return the funds or the security to the other party (ies).

Specified purpose accounts other than those recording special purpose money

6.2.15 Interest on amounts credited to SPAs that are not used to record special purpose money is authorized only by specific statute.

6.2.16 SPAs related to joint ventures, partnerships, and insurance and benefit programs are only established pursuant to legislation or by an Order-in-Council.

6.2.17 When legislation (or other establishing authority) does not authorize the cost of administration to be charged to the account, costs incurred for the administration of SPAs are charged to a departmental appropriation.

6.3.1 Chief financial officers are responsible for supporting the deputy head by overseeing the implementation and monitoring of this directive in their departments, bringing to the deputy head's attention any significant difficulties, gaps in performance or compliance issues and developing proposals to address them, and reporting significant performance or compliance issues to the Office of the Comptroller General.

6.3.2 The Comptroller General is responsible for monitoring departments' compliance with the requirements of this directive and conducting a review within five to eight years.