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Effective: APRIL 1, 1998
Responsibility: Vice-President and Chief Financial Officer

• Appendix A
• Appendix B
• Appendix C

APPENDIX B
PROCESSING OF DOCUMENTS AND LOCAL PAYROLL VS ACCOUNTS PAYABLE

1. PROCESSING - ACCOUNTS PAYABLE

• Once approved by the manager, all original documents requiring the production of a cheque (invoices, travel claims, local payroll, etc.) should be sent directly to the National Payment Centre (NPC) for processing. Only those invoices where costs have to be allocated to multiple cost centers should be re-routed through the local Finance department. NPC will process documents based on pre-determined criteria for priority. Urgent matters will be dealt with immediately while other transactions will be processed as soon as possible.
• Unless there is a valid reason, all cheques will be mailed to the payee, they will not be returned to the manager who has authorized the payment. If there are documents which must be returned with the cheque, they should be sent to NPC with the authorized document.
• Only authorized original documents should be submitted to NPC. Managers should not retain original documents and submit copies or submit cheque requisitions (CBC 47) in place of original invoices. Faxed documents will not be accepted as original documents. If urgent payments have to be made from faxed documents, the original approved document must be sent to NPC on the same day with a note indicating that the invoice was processed with a faxed document.
• If documents have been authorized in accordance with the DFA, they will be processed. Payments will not be delayed for policy infractions (i.e. business class travel, missing receipts, etc.) especially if the goods and/or services have been delivered.

2. FOLLOW-UP

• It is the responsibility of each manager to ensure that original invoices submitted to NPC for processing are properly approved in accordance with DFA and that the proper cost center, program/project number and account number is indicated. If the information is not provided, the document will be returned to the manager for follow-up.

3. INCORRECT INVOICES/CREDIT NOTES

With the exception of progress billings and holdbacks, especially those pertaining to Capital Projects, the following procedure must be followed when it is discovered that the amount on an invoice is incorrect:

• It is the manager’s responsibility (or Purchasing) to request the supplier to either cancel the original invoice and replace it with a new invoice, or request a credit note for the amount of the difference. Once the credit note has been received, all documents can be processed. If the manager approves the original invoice, there should be a note to the effect that a credit note has been requested and payment of the original invoice should be put on hold until the credit note is received. Credit notes should be forwarded to NPC immediately for processing.
• The amount on the original invoice should not be changed by the manager or the Purchasing Agent or be replaced with a Cheque Requisition (CBC 47). A Cheque Requisition/CBC 47 should only be used when there is no invoice or if the invoice is not addressed to CBC (i.e. to an individual). There is always a possibility that both documents would eventually be processed and someone would then have to follow up with the supplier to obtain a refund. If the original invoice amount is changed manually, there is a possibility that the supplier will forget to make an adjustment in their records, resulting in an apparent short payment situation as far as the supplier is concerned. Again, someone will have to follow up.

4. STATEMENTS OF ACCOUNTS

• Managers should NOT approve statements of account and NOT keep original invoices for their records and replace them with Cheque Requisitions/CBC 47s. The original invoices and not copies must be approved and sent to NPC for processing. Again, there is the possibility of duplicate payments if managers submit copies of invoices or approved statements of account to NPC. Suppliers should also be instructed to send invoices directly to NPC if covered by a purchase order, otherwise, the invoice should be sent directly to the manager for approval.

5. MULTIPLE DISTRIBUTIONS

• Distributing invoices for multiple approvals requiring multiple cost distributions could cause delays in processing, could result in the invoice being lost and possible loss of discounts. In order to avoid such delays, there are a number of options available:
  • Finance managers could obtain signing authority from Regional managers for certain types of expenses, such as hydro, telephone, freight, etc., approve and code the invoices on their behalf and submit to NPC for processing.
  • Managers could agree on a fixed monthly cost allocation based on past usage. The Comptroller would approve the invoices and distribute the costs based on the agreed amounts/percentages. Managers will still see the cost and have access to the invoices.
  • Equal monthly payment plans could be established, especially for utilities with the adjusting invoice being settled in the final month.

LOCAL PAYROLL vs ACCOUNTS PAYABLE

In order to ensure consistency in application and to follow the new with Canada Customs and Revenue Agency (formerly Revenue Canada) guidelines pertaining to the issuance of T4, T4A, T4NR and T1204 slips, the following guidelines will apply for payments to individuals as opposed to payments to Incorporated Companies. With the exception of payroll amounts where there is a $500.00 limit, T4, T4A, T4NR and T1204 slips will be issued for all payments to individuals and companies.

LOCAL PAYROLL

The following types of payments will be processed through Local Payroll:

• All payments to members of Talent Unions (ACTRA, AFM, UDA, WGC, SPACQ, and SARDEC) where deductions for unions dues are usually required.
• With the exception of those employees paid through Corporate payroll, payments to individuals with source deductions (Income Tax, CPP, QPP, EI, Union Dues or other payroll-related items).
• Payments to individuals, including independent contractors for the services of specific individuals who are not incorporated, and where there is no requirement to make source deductions (i.e. when the net pay equals the gross pay amount). This includes items paid under Article J-4 of the Unit 2 agreement.
• Payments to individuals for items considered to be a taxable benefit in accordance with Canada Customs and Revenue Agency (formerly Revenue Canada) guidelines and Corporate Policies and Procedures such as non-accountable travel advances/allowances to individuals.

ACCOUNTS PAYABLE

The following types of payments will be processed through Accounts Payable and T1204s will be issued for such payments:

• All payments to suppliers of goods and services (rentals, snow removals, ground maintenance, program sequence, surveys, etc.), except payments under # 4 above.
• All payments to Incorporated companies, except those indicated in #3 above.
• Payments to employees for reimbursement of expenses, however, no T4/T4A will be issued unless they are deemed to be taxable benefits.