Rescinded [2009-10-01] - Interdepartmental Settlements Policy

This document contains the complete text of the Policy on Interdepartmental Settlements (IS) applicable during the FIS transition period starting April 1, 1999.

The implementation of the Financial Information Strategy (FIS) on April 1, 1999 introduced a re-engineering of the interdepartmental settlement process. Once departments interface with the new Receiver General suite of FIS central systems, for the majority of settlements between departments, it will usually be the creditor that initiates the transaction via the Standard Payment System (SPS) (a FIS central system) rather than the debtor department. This new process should result in significantly greater efficiencies in the processing of interdepartmental settlements. However, temporary complexities will be experienced during the period when there are some departments using the re-engineered approach and others the legacy (pre-FIS) central systems.

In order to gain these efficiencies and minimise the effects of the complexities, departments require disciplined and timely bilateral administrative processes as part of any business arrangement between them and such processes need to be well understood and documented. Timeliness is not a new requirement, but an increased emphasis is being placed on it to ensure that interdepartmental settlements are handled promptly and accurately.

This policy will focus on the requirements of the transition period. Once all departments are connecting with the new Receiver General suite of FIS central systems, this policy will be revised.

Creditor department (ministère créditeur) - The selling or invoicing department for the sale or transfer of goods or services. (i.e. the department to which funds are owed (supplier or payee) or the department to which funds are to be advanced)

Debtor department (ministère débiteur) - The purchasing or paying department for the purchase or transfer of goods or services. (i.e. the department which owes funds (customer or payor) or which is to advance funds to another department)

FIS department (ministère conforme à la SIF) - For the purposes of this policy, a FIS department is defined as a department that interfaces with the new Receiver General suite of FIS central systems. These systems include the Central Financial Management and Reporting System (CFMRS), the Standard Payment System (SPS), the Receiver General - General Ledger (RG-GL), Banking Facilities System (BFS) and the Payroll System - General Ledger (PS-GL).

FIS transition period (période de transition à la SIF) - The FIS transition period refers to the period during which both the FIS central suite of systems and the Non-FIS Legacy suite of systems will be in use. The transition period extends from April 1, 1999 to March 31, 2001.

Interdepartmental Settlement (IS) (Règlement interministériel (RI)) - An Interdepartmental Settlement refers to a settlement between any two government departments or agencies that operate within the Consolidated Revenue Fund.

Non-FIS department (ministère non conforme à la SIF) - For the purposes of this policy, a non-FIS department is defined as a department that interfaces with the Receiver General legacy central systems. These systems include the Central Accounting System (CAS) and the Accounting Data Input System (ADIS), the Departmental Reporting System (DRS), the Interactive On-line Control Files (IOCF) and Central Accounting Information System (CAIS).

Questioning (consultation) - An IS which is questioned, is one which, although it has already been successfully processed and reported to the Receiver General-General Ledger, has not been accepted by the recipient department.

To ensure that all interdepartmental settlement transactions (involving both FIS departments and Non-FIS departments) are processed in a timely and accurate manner.

FIS departments are to use the interdepartmental settlement functionality of the Standard Payment System for the processing of settlements with all other departments.

This policy applies to all organizations considered to be departments within the meaning of section 2 of the Financial Administration Act.

a) FIS departments shall use the Standard Payment System (SPS) to process transactions with other government departments. Exceptions to the use of an IS are identified in Chapter 9 of the Receiver General Manual.

b) This policy does not apply to intradepartmental transactions. FIS departments must not use the SPS to process transactions within the same Receiver General assigned department number.

c) During the transition period:

1. For transactions between two Non-FIS departments -
   
   Both non-FIS departments will continue to use the Receiver General's legacy systems.
   
   
2. For transactions between two FIS departments -
   
   The FIS-creditor departments will initiate an IS using SPS for the majority of transaction types. Exceptions, where the debtor department will initiate an IS, are listed in Chapter 9 of the Receiver General Manual.
   
   
3. For transactions between a FIS creditor department and a non-FIS debtor department -
   
   The FIS creditor departments will initiate IS transactions through SPS, as well as issue invoices or requests for payment and any other relevant documentation to the non-FIS debtor department. The non-FIS debtor will initiate the prescribed transaction through the legacy system.
4. transactions between a non-FIS creditor department and a FIS debtor department -
   
   The FIS debtor department will initiate an IS transaction through SPS on receipt of an invoice or request for payment from the non-FIS creditor. The non-FIS creditor department will reflect the prescribed output in their legacy system.

d) Departments must adhere to the following time limits for the processing and questioning of transactions. Prior to proceeding with "questioning" of an IS, departments should clarify and resolve the issues through bilateral discussions. Departments are to follow IS processing guidelines prepared by the Receiver General that are available on the Intranet at http://publiservice.pwgsc.gc.ca/cars-sccr/is/welcome-e.html

1. Processing and "questioning" between two FIS departments -
   
   If an IS in SPS is considered to be incorrect for any significant reason (incorrect recipient, incorrect amount, goods or services not received or other conditions not met, duplicate), both departments may use the functionality in SPS to question (i.e. reverse) the transaction. The department must question a transaction within 15 working days of receipt of the SPS notification.
   
   Questioning functionality in SPS is not available after the last working day of March for transactions of the previous fiscal year, as per the Year-end Procedures issued by the Receiver General.
   
   
2. Processing between two non-FIS departments -
   
   Debtor departments must process a transaction within the legacy system g>within 15 working days of receiving an invoice or request for payment.
   
   
3. Processing between a FIS creditor department and a non-FIS debtor department -
   
   The non-FIS debtor departments must process a transaction within the legacy system within 15 working days of receiving an invoice or request for payment. The FIS creditor must separately process the credit side of the transaction within the SPS.
   
   Where the invoice or request is incorrect for any significant reason (incorrect amount, goods or services not received or other conditions not met, incorrect debtor department, duplicate invoice or request for payment), the departments should agree on action to be taken within 15 working days.
   
   
4. Issuing of old year invoices after March 31 -
   
   Invoices relating to old year must be issued within 10 working days following March 31.

e) Disagreements between departments should be resolved before the end of the next accounting period or, at the very latest, prior to the end of the current fiscal year.

f) Where the departments cannot come to an agreement on a particular transaction, and the amount involved exceeds $100,000, the Office of the Deputy Comptroller General of the Treasury Board Secretariat will provide a dispute resolution service. The following procedures must be followed.

1. The departments involved are to provide written documentation of the dispute, including all relevant information and argumentation, to the Office of the Deputy Comptroller General. The documentation is to be signed by the Senior Financial Officers of the departments involved. One jointly prepared document is preferred. If separate documents are submitted, each SFO must also send the documentation to the other SFO(s).
2. The Office of the Deputy Comptroller General will review the documentation and, where necessary, will convene a meeting of the Senior Financial Officers of the departments involved.
3. The recommendations of the Office of the Deputy Comptroller General will be final. Any recommended action(s) must be taken by the department(s) involved before the end of the current accounting month.

g) The Receiver General is responsible for issuing detailed instructions on departmental processing of interdepartmental transactions and on departmental reconciliation efforts.

The internal audit plans of departments, agencies and other organizations covered by this policy should include a review of operations related to the requirements of this policy.

This policy is issued under the authority of the Financial Administration Act and should be read in conjunction with:

• The Receiver General Manual, Chapter 4 (Standard Payment System (SPS))
  http://publiservice.pwgsc.gc.ca/cars-sccr/pdf/chap9e.pdf
• The Receiver General Manual, Chapter 9 (IS Processing during the FIS Transition Period)
  http://publiservice.pwgsc.gc.ca/cars-sccr/pdf/chap9e.pdf
• The Receiver General Manual, Chapter 11 (Reconciliations Required by Departments under FIS)
  http://publiservice.pwgsc.gc.ca/cars-sccr/pdf/chap11e.pdf
• IS processing guide, (RG on-line web site)
  http://publiservice.pwgsc.gc.ca/cars-sccr/is/welcome-e.html
• Treasury Board Secretariat Policy on Account Verification

Enquiries concerning this policy should be directed to your departmental headquarters. For interpretation of this policy, departmental headquarters should contact: