Rescinded [2017-04-01] - Directive on Receivables Management

6.1.1 Minimizing receivables, to the extent possible, in program design and delivery by requiring payment in advance or at the time that goods and services are provided by the department.

6.1.2 Identifying in advance the types of goods and services, the uses of facilities, and the rights and privileges that may be provided on credit.

6.1.3 Establishing, through a departmental credit policy, items that include the following:

• the credit assessment process;
• a minimum threshold value for credit sales;
• acceptable levels of credit risks;
• terms of credit;
• terms of payment (recovery);
• the minimum information necessary to extend credit; and
• the point at which, unless precluded by statute, the department may not provide goods, services, use of facilities and rights and privileges on credit because of unpaid debts to the Crown.

6.1.4 Issuing, recording and reporting all receivable transactions accurately and promptly in the departmental accounts and the accounts of Canada.

6.1.5 Applying authorized interest and administrative charges. Note that the Interest and Administrative Charges Regulations apply.

6.1.6 Taking appropriate, timely and cost-effective collection actions, including the use of a set-off. Note that subsection 155(1) of the Financial Administration Act applies.

6.1.7 Establishing procedures for responsibility centre managers to ensure fair treatment of debtors:

• debtors are informed of their obligations under applicable acts and regulations and advised of any existing administrative review or appeal processes that provide relief, redress or both;
• applicable acts, regulations or policies are applied consistently toward all debtors;
• any information provided to debtors is accurate and understandable;
• the debtor's financial situation and any other special circumstances are considered when collecting a debt; and
• the department's service expectations to debtors are openly communicated to debtors.

6.1.8 Recommending to the minister and deputy head the classes of payments (e.g., tax refunds, GST rebates) that should be made available to other departments for set-off.

6.1.9 Taking action on a timely basis for any write-off, remission, forgiveness or waiver of debts when a receivable is not settled in full.

6.1.10 Seeking security for debts due to the Crown when it is good business practice to do so (refer to the Guideline on Security for Debts). Note that section 156 of the Financial Administration Act applies.

6.1.11 Ensuring that upon request of departments and agent Crown corporations, debtor information held by other departments or agent Crown corporations is shared with them (unless departmental or program legislation specifically provides otherwise). This requires that:

1. Any public officer or agent of Her Majesty, including agent Crown corporations, upon the request of officials from a department or agent Crown corporation, will provide officials from that department or corporation with the following information concerning a person that has a debt due to Her Majesty:
   • the person's last known address and telephone number;
   • the name and address of the person's last known employer; and
   • any payment coming due to the person.
2. The unnecessary disclosure of these three information elements is limited. Only the information that is necessary to comply with the purpose of the request is provided. For requests concerning attempts to locate a person, only the first and second elements of information are provided. When a request concerns use of a set-off authority, all three elements of information may be necessary and, to the extent possible, are provided to the requestor.
3. All information provided is fully compliant with the Privacy Act or the Personal Information Protection and Electronic Documents Act.

6.2.1 Internal controls for the administration of accounts receivable are established, and are in place and include, at a minimum:

• the appropriate division of duties related to credit-granting, collections, maintenance of accounting records, the handling and reconciling of money, and write-offs;
• the provision of complete audit trails to track all claims from the transaction that gave rise to the receivable through to its final settlement;
• the establishment and monitoring of results-based measurement mechanisms; and
• the preparation and distribution to management of periodic reports on the financial and non-financial activities of the portfolio, including receivable ageing statements.

6.2.2 Appropriate forms of payment are accepted, as supported by the Receiver General, for the settlement of accounts receivable.

6.2.3 Estimates for the allowance for doubtful accounts are developed according to the Policy on Allowances for Valuation of Assets and Liabilities.

6.2.4 Procedures are established to ensure that once an account receivable has been recorded in the departmental accounts, it is not removed from these accounts until the department has received full payment or has properly authorized a remission or other forgiveness, a write-off or a cancellation. If it becomes known in the future – after an account has been written off but not legally extinguished – that the debtor's financial position has improved and the debtor is capable of paying the debt, the account is reinstated and collected.

6.3.1 Chief financial officers are responsible for supporting their 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.