1. Policy objective
To ensure that organizations do not exceed appropriation
ceilings imposed by Parliament or allotment limits approved by
Treasury Board.
It is government policy that departments enter only into
contracts or other arrangements for which sufficient unencumbered
balances are available in the relevant appropriation, item in the
Estimates or Treasury Board-approved allotment ceiling to
discharge any debts incurred under such commitments.
This policy applies to all organizations that have received
commitment or payment authority under sections 32 or 33 of the
Financial Administration Act with respect to an
appropriation.
(a) Departments must ensure that sufficient balances are
available in their appropriations, items in the Estimates, or
Treasury Board, approved allotment ceilings to discharge any
debts incurred under any contractual or other arrangement.
(b) Deputy heads are responsible for developing and
implementing departmental policies, systems, and procedures to
ensure that commitments are controlled and that records
pertaining to them are maintained.
(c) In the case of a revolving fund, commitments must be
controlled so that the payments, when netted against receipts,
will not exceed the drawdown authority.
(d) Departments must maintain permanent records of commitments
for future years and ensure that, in aggregate, such amounts do
not exceed the limits of the most recently approved Annual
Reference Level Updates (ARLU) reference levels. Departments must
also ensure that the reference levels are adjusted for any
reductions or additional resources approved by Treasury
Board.
(e) The delegation of responsibility for the control of
commitments must be in writing and must specify the extent and
limitations of the authority. The written delegation should be
included in the departmental financial authority delegation
instrument.
When departmental policy dictates that commitments should be
independently authorized, approval is required from the persons
who have been delegated the responsibility to control
commitments. These commitment approvals must be in a form that
allows for an adequate audit trail back to the originator.
Departmental internal audit groups should include in their
annual audit plan, the review of commitments in accordance with
this policy.
Financial Administration Act, section 32
This chapter cancels chapter 3-5 of the "Financial Management"
volume dated April 1, 1992; and this policy supersedes Chapter 6
(section 6.2.3, 6.3.2-6.3.2.4, 6.8), Chapter 7 (section 7.2.1.3),
Chapter 8 (sections 8.4 related to Commitment control and 8.4.2)
and Chapter 9 (section 9.2.1.1(2)) of the Treasury Board Guide on
Financial Administration, consolidated revision, April 1991, and
Treasury Board circular no. 1984-42 (no. 794737).
Enquiries about this policy should be directed to your
departmental headquarters. For interpretation of this policy,
departmental headquarters should contact:
Financial and Contract Management Sector
Comptroller General Branch
Treasury Board Secretariat
L'Esplanade Laurier
300 Laurier Avenue West
Ottawa, Ontario
K1A 0R5
Telephone: (613) 957-7233
Facsimile: (613) 952-9613
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