Rescinded [2009-10-01] - Policy on Recording of Refunds of Expenditures and Repayments of Advances

This policy is effective October 1, 1996 and supersedes section 10.7.9 of the Treasury Board Guide on Financial Administration for Departments and Agencies of the Government of Canada, consolidated revision, dated April 1991.

1. A fundamental principle of parliamentary control over expenditures is that all receipts must be deposited in the Consolidated Revenue Fund (CRF) and that Parliament alone retains the right to determine spending priorities including the appropriation of revenues received.
2. However, section 39 of the Financial Administration Act (FAA) allows certain funds that are repaid or returned to be credited to the appropriation from which they were originally spent.

To ensure proper use of the authority to credit refunds of expenditures and repayments of advances to the appropriations from which they were originally spent.

It is government policy that, in accordance with statutory authority, departments be allowed to replenish the appropriation from which it was originally disbursed with certain moneys received as refunds or repayments.

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

1. Departments must establish policies and procedures to ensure that:
   1. only when received in the same fiscal year as the original charge to the appropriation or during the supplementary accounting periods at year end are the following refunds and repayments to be credited to the appropriation and the economic object that was originally charged:
      • recoveries of overpayments, duplicate payments, and erroneous payments;
      • repayments of accountable advances;
      • repayments of budgetary loans where there is authority to reuse receipts for making additional loans;
      • repayments of losses of money;
      • refunds from the return of goods;
      • refunds of sales or excise taxes and customs duties;
      • refunds of advance payments;
      • refunds arising from the settlement of contractual disputes;
      • refunds arising from manufacturers' rebates, price reductions, volume discounts or other price adjustments;
      • refunds arising from landlords' rebates representing cash lease inducements where a government department is a lessee;
      • payment of an indemnification;
      • payment from a claim for loss of or damage to a Crown asset;
      • reimbursement by another party (including other government departments) for its agreed share of the costs pursuant to a cost-sharing agreement; and
      • repayment of travel expenses such as personal stopovers and side trips that were included on an invoice payable by the department but that are the responsibility of the traveller.
   2. refunds of expenditures and recoveries of overpayments of statutory appropriations are credited to the statutory appropriation for the fiscal year in which the refund or recovery is actually received; and,
   3. receipts of repayments of advances that have been made from statutory appropriations and repayments of budgetary loans are credited to the statutory appropriation for the fiscal year in which the amounts are received.
2. Except as noted in 6(a)(ii) and (iii), when a refund, reimbursement or repayment relates to expenditures made in a prior fiscal year, and is received after the final date for depositing that fiscal year's receipts at year end, the amount must be credited to the CRF as non-tax revenue as a refund of previous years' expenditures.

1. Departments should undertake periodic audits which focus on the appropriate crediting of funds received as provided by section 39 of the FAA.
2. The Treasury Board Secretariat will monitor the effectiveness of this policy by reviewing departmental audit reports.

Please direct enquiries about this policy to the responsible office in departmental headquarters who, in turn, may seek interpretations from: