Rescinded [2017-04-01] - Directive on Losses of Money or Property

6.1.1 Designing, implementing and maintaining systems of internal control, including those related to account verification, to prevent the loss of public money and property or to detect any losses in a timely manner.

6.1.2 Ensuring that the following is carried out when advised of an incident resulting in a loss of public money or property:

• The cost of the loss is calculated as soon as possible and, when the loss is recoverable, a claim against those responsible is prepared;
• All applicable transactions are recorded in the departmental financial management system; and
• The loss is reported for inclusion in the Public Accounts of Canada. Note that the Receiver General (RG) Manual – "Public Accounts Instructions" applies.

6.1.3 Calculating the value of the loss as follows:

• For public money, it is the actual amount missing; and
• For public property, it can be either of the following:
  • If the property is not replaced, it is the net book value for the capitalized item or the fair market value for a non-capital item; or
  • If the property is replaced, it is the replacement acquisition cost; or
  • If the property is damaged, it is the cost of repair.

6.1.4 Ensuring that, in addition to the value of the loss of public money or property calculated as indicated in 6.1.3, claims include the following, when applicable:

• The goods and services tax/harmonized sales tax (GST/HST) and Provincial Sales Tax (PST);
• The financing costs of a loss of public money involving a fraudulent payment or an unauthorized expenditure;
• Additional costs incurred or revenue lost as a result of public materiel or property not being available for its intended purpose; and
• The cost of recovery proceedings or enforce recovery.

6.1.5 Preparing and processing claims against those responsible for losses due to negligence or offences (note that the Directive on Receivables Management applies), except in the following situations:

• When losses are to accountable advances and the conditions of section 6.1.6 are met;
• When legal proceedings (including proceedings before an administrative tribunal) are required to recover the loss and the Department of Justice recommends that proceedings be discontinued; and
• When Treasury Board has specifically authorized the department to waive recovery due to unusual circumstances.

6.1.6 Acting to recover any losses or shortages from the holder of an advance (note that section 3 of the Accountable Advance Regulations apply), including petty cash shortages, unless all of the following conditions have been met:

• The prescribed procedures were followed and the petty cash was properly secured;
• There was physical evidence of theft, such as forced entry; and
• No act or omission on the part of the custodian contributed to the loss.

6.1.7 Acting to recover any losses or shortages from either or both the holder of the advance and his or her manager when one or more of the conditions in 6.1.6 has not been satisfied and if the manager assumes full or partial responsibility for the loss by acknowledging in writing that he or she:

• Did not ensure that adequate facilities and procedures were in place;
• Did not provide adequate direction, instruction or supervision; or
• Allowed improper or inappropriate practices to occur.

In such a case, the chief financial officer is responsible for apportioning recovery of the loss between the manager and the employee concerned on the basis of their respective culpability.

6.1.8 Ensuring losses of public money requiring a disbursement to replenish a fund, like petty cash, and cashier shortages resulting from losses of revenue, are charged to the appropriation for the related program, after approval by the minister or such other member of the departmental senior executive committee as may be designated in writing by the minister. 

6.1.9 Ensuring, in the case of cashier shortages resulting from losses of revenue, the applicable revenues are credited with the amount of the shortage when the appropriation is charged (as noted in 6.1.8). 

6.1.10 Carrying out one or more of the following actions when there is an ongoing problem with cashier shortages,:

• Recovering shortages from the cashier when negligence is involved;
• Ensuring additional training is provided;
• Reassigning the cashier to other duties; and
• Conducting appropriate disciplinary action as required.

6.1.11 Ensuring that when a lapsing appropriation has been charged to replace the loss of public money or property, any recovery received in the same fiscal year is recorded and credited to the appropriation.

6.1.12 Ensuring that all losses of public money or property are reported for inclusion in the Public Accounts of Canada including losses involving negligence, offences and all acts of fraud, defalcation, misappropriation, malfeasance, misfeasance, nonfeasance, theft and robbery. The information reported consists of a brief description of the nature of the loss and, when applicable, the following:

• The amount of the loss, whether money or property (losses of similar incidents are grouped and only their total amount and number are reported, though the department retains details of the individual losses);
• The amount recovered in the current year;
• The amount not expected to be recovered; and
• The amount expected to be recovered in subsequent years.

6.1.13 Ensuring the amounts that are expected to be recovered in subsequent years continue to be reported for inclusion in the Public Accounts of Canada until fully paid or the outstanding claim amount is written off. Note that the RG Manual, Chapter 15 applies.