Departments are responsible and accountable for the security and proper use
of the funds and property entrusted to them. Money that is lost through
carelessness or weak control measures is a concern to managers and government
employees alike. It reflects on their competency and their responsibility to
protect the funds entrusted to them by Parliament and the public.
Worse still, when funds or property are lost through criminal acts by public
servants, the image of the Public Service is damaged.
All managers in particular and employees in general must be alert to control
weaknesses, improper practices and illegal acts that arise in their respective
areas of responsibility and must act promptly to resolve them.
To ensure accountability for all losses of money and all allegations of
offences and illegal acts against the Crown and other improprieties by reporting
and investigating them, and taking appropriate action.
It is government policy that:
- all losses of money and allegations of offences, illegal acts against the
Crown and other improprieties be fully investigated;
- suspected offences be reported to the responsible law-enforcement agency;
- losses and offences be reported to Parliament through the Public Accounts;
- losses be recovered whenever possible;
- measures be implemented to prevent future recurrences of losses and
offences;
- when a department considers that circumstances warrant it, disciplinary
action be taken; and
- managers who fail to take appropriate action or who directly or indirectly
tolerate or condone improper activity be themselves held to account.
This policy applies to all organizations that are departments within the
meaning of section 2 of the Financial Administration Act.
- Suspected cases of theft, fraud, defalcation or any other offence or
illegal act involving employees that do not require an immediate
response by a police agency may be referred to departmental legal services
for an opinion on the seriousness of the incident before further action is
taken (see paragraph 1.2 of Appendix C). Otherwise, all
losses of money and suspected cases of fraud, defalcation or any other
offence or illegal act against Her Majesty must be reported to
law-enforcement authorities and the Treasury Board Secretariat (TBS) as
outlined in Appendix C.
- Departments must ensure that employees are aware of, and are periodically
reminded of: this policy; their potential liability under section 78 of the Financial
Administration Act (FAA) [R.S.C. 1985, c. F-11] and sections 122
and 126 of the Criminal Code; and their personal responsibility under
paragraph 80(e) of the FAA to report any knowledge of:
-
a contravention of the FAA or of its regulations;
a contravention of any revenue law; or
any fraud against Her Majesty.
- Departments must take reasonable measures to protect the identity and
reputations of both the persons reporting offences and improprieties and the
persons against whom allegations are made and, in particular:
-
take prompt action on any complaints of harassment of persons who have
made legitimate reports; and
consider taking appropriate disciplinary action, when warranted, in cases
where a person has made wilful or malicious unfounded allegations.
- When a person is accountable for a loss of money, the loss must be
recovered from that person unless:
- in cases where legal proceedings (including proceedings involving a
formally-constituted administrative tribunal like the Public Service Staff
Relations Board) are required to effect recovery, the Deputy Attorney
General advises against such action or recommends that proceedings be
discontinued; or
- the Treasury Board has specifically authorized the department to waive
recovery due to extenuating circumstances.
- When a department determines that disciplinary action is warranted, such
action is distinct from any steps that may be taken by law-enforcement
authorities.
Departments shall appoint a coordinator, functionally responsible to the
deputy head or to the departmental executive committee, to serve as a single
focal point for reporting and coordinating subsequent action. This:
- ensures that employees know to whom they should report any allegations or
suspected incidents as required by this policy;
- avoids interpersonal problems that might arise should employees be
required to report suspicions to their immediate supervisors;
- ensures that the departmental security officer is notified immediately of
any possible breaches of security; and
- ensures that all allegations are properly reported and followed up, and
that all parties having an interest in a particular incident (e.g. senior
management, finance, staff relations, security, internal audit, the RCMP,
etc.) are brought into the picture.
Internal auditors are knowledgeable of the conditions and activities
where offences like theft, fraud and defalcation are most likely to occur and,
during their normal audit activities, are alert to indicators that such offences
may have been committed. However, the primary role of an internal auditor is not
to investigate fraud, but to examine and evaluate the effectiveness of internal
controls and to alert management to weaknesses in controls. Thus, unless
specifically tasked by the deputy minister to look into a particular matter,
internal auditors would not normally be responsible for investigations under
this policy. Nevertheless, an internal auditor who, during the course of a
normal audit, acquires knowledge or uncovers information indicating that an
offence or illegal act may have been committed, would be responsible, like any
other employee, to inform the designated authority within the department.
Through personnel policies, departments have been fully delegated the
responsibility for decisions on the disciplining of employees directly or
indirectly responsible for a loss or other incident. In this regard,
departmental staff relations advisors are responsible for advising
departmental management on appropriate disciplinary action. Departments are also
responsible for reporting incidents as required by this policy and for taking
preventative measures.
In general, departmental security officers (DSOs) are responsible for
the design and maintenance of systems and procedures to protect assets and
classified or designated information. They must, therefore, be notified
immediately of suspected cases of theft or any other possible breaches of
security, in order to ensure that any deficiencies in security measures may be
rectified. Except when departments have special organizations established for
the purpose, DSOs are also normally responsible for conducting or directing any
internal departmental investigation of security breaches and for dealing with
the appropriate law-enforcement agency on such cases.
Criminal proceedings, however, are the exclusive responsibility of
law-enforcement authorities. Departments do not have any discretion in these
matters. The investigating police agency is responsible for laying
charges and a Crown attorney is responsible for deciding whether to
proceed with the case, ask for a stay of proceedings, or drop the charges.
This policy will be monitored through reports submitted by departments to the
RCMP, the Treasury Board Secretariat and Public Accounts.
- For incidents involving losses of public property and claims by the Crown
in respect of losses of public property or losses of services, also see
Chapter 2-4 of the "Materiel, Risk and Common Services"
volume of the Treasury Board Manual.
- For policy, guidelines, and standards on security, see the
"Security" volume of the Treasury Board Manual.
- For the policy on conflict of interest and post employment, see the
"Human Resources" volume of the Treasury Board Manual.
This chapter cancels chapter 5-8 of the "Financial Management"
volume dated August 1, 1993; and this policy supersedes section 10.9 and
appendices 10.D and E of the Treasury Board "Guide on Financial
Administration".
Enquiries concerning this policy should be directed to your departmental
headquarters. For interpretations of this policy, departmental headquarters may
contact:
Comptroller Sector
Program Branch
Treasury Board Secretariat
Ottawa, Ontario
K1A 0R5
Telephone: (613) 957-7233
Facsimile: (613) 952-9613
1. Reporting offences
Certain departments have both enforcement and investigative responsibilities
within their program areas. Thus, departments such as National Defence, Revenue
Canada, and Employment and Immigration Canada, which have their own police force
or investigators, may investigate program offences (e.g. unemployment insurance
fraud, tax evasion, etc.) themselves. However, associated offences under the Criminal
Code and offences under the Financial Administration Act or some
other federal statute where the RCMP or a local police department has the
primary jurisdiction must be referred to them as outlined in the "policy
requirements" section of this chapter. Similarly, program offences by
employees themselves are reportable to the RCMP for possible criminal
investigation when position, inside knowledge, collusion, or breach of trust,
etc. may have been involved.
2. Preliminary examination
Any preliminary examination undertaken by a department should be limited to
ascertaining whether there is a possible basis to an allegation. As soon as such
an examination reaches the point where there is a reasonable basis to suspect
that an allegation might reasonably be expected to have some substance,
the matter should be reported as outlined in Appendix C.
3. Violations by law-enforcement officials
Persons employed in a law-enforcement capacity, such as peace officers,
inspectors and regulatory officials, who, themselves violate the laws or
regulations that they are responsible for enforcing are, in addition to the
program offence, also possibly in violation of the departmental code of conduct
and may even be in criminal breach of trust. Any investigation of such incidents
should therefore consider these latter two aspects.
4. Handling tips
Departments should establish and ensure that employees are aware of
procedures to deal with tips about alleged losses, offences, improprieties and
improper practices, however obtained or received, and whether anonymous or
otherwise.
5. Accountability versus responsibility
A person may be accountable for a loss of money without necessarily
being the person responsible or culpable. For example, a custodian
who fails to follow proper procedure and secure cash or other valuables like
taxi vouchers and travellers' cheques might still be accountable for any loss or
shortage, even if there is no evidence of criminal action on his or her part.
6. Cashier shortages
Unlike petty cash and other accountable advances (see Appendix C, paragraphs
2.1 and 2.2), cashier shortages in the normal course of business would not
normally be recovered from the cashier unless negligence was involved. When
there is an ongoing problem with a cashier balancing within acceptable
tolerances, additional training or reassignment to other duties should be
considered.
7. Losses of personal funds
The Crown has no responsibility under this policy for losses of personal
funds.
8. Losses of travel and similar advances
When, in exceptional circumstances, such as a robbery despite due care and
diligence, a department considers it appropriate to indemnify an employee for a
loss of an advance against an entitlement to reimbursement for personal expenses
like a travel advance, the department may seek the approval of the Treasury
Board to make a payment as an extraordinary allowance pursuant to paragraph
11(2)(h) of the Financial Administration Act. This may be done via
a letter to the President of the Treasury Board who has been delegated the
authority to act on behalf of the Board in certain personnel matters. However,
given the requirement to use travellers' cheques, the general availability of
travel cards and prudence and good risk-management practices in carrying only
minimal amounts of cash, such payments are expected to be extremely rare and of
a minor amount. When the making of such a payment is not justified or otherwise
has not been approved, the loss must be absorbed personally by the employee who
lost the advance or claimed from his or her personal insurance.
Note: Departments are encouraged to consult with the Safety, Health
and Employee Services Group, Human Resources Policy Branch, Treasury Board
Secretariat before sending a request of this nature to the President of the
Treasury Board.
9. Accountability of managers
When a manager has not provided adequate direction or has permitted
inappropriate operational practices to continue, he or she might be deemed to
share in the accountability for the loss. In such a case, a department might
consider apportioning recovery between that manager and the employee concerned
in accordance with their respective accountability.
10. Recoveries
Factors to consider when determining the amount of any demand or claim for
recovery might include:
- the actual amount of the loss or damage;
- GST and PST, where applicable (the GST refundable advance and remission
provisions and the government's PST exemption do not apply to personal use.
Thus, in the case of recoveries for personal use of telecommunication
services for example, GST and applicable provincial telecommunication taxes
must be collected and remitted);
- in the case of a loss involving a fraudulent payment or an unauthorized
expenditure, the associated financing costs;
- any additional costs incurred or revenue lost as a result of material or
property not being available for its intended purpose; and
- the cost of any proceedings to effect or enforce recovery.
Where a department is recovering a loss arising from falsified claims,
falsified documents, false pretences, fraud and the like, the department should
insist on immediate recovery in full. It is up to the individual concerned to
make appropriate arrangements to raise the money - through a loan with a
financial institution; by taking out a mortgage or a second mortgage; or
whatever. The Crown should not be financing this type of recovery and, where
there are any delays in obtaining payment, should charge interest at full
commercial rates.
11. Timing of disciplinary action
In general, recoveries in civil proceedings and disciplinary action under
labour law are separate from criminal proceedings and are not dependent on the
outcome of those proceedings. Thus, when a department determines that
disciplinary action is warranted, it should be taken promptly. Any undue delay
may adversely affect the outcome if the matter goes to grievance and third-party
adjudication.
If all the relevant facts and circumstances are known, it is not necessary to
wait for the results of any criminal investigation or proceedings. Subject to
prior consultation with the investigating police agency and departmental staff
relations advisors, the two may normally proceed concurrently.
12. Protection of the rights of individuals
Measures to protect both the person reporting an incident or making an
allegation and the person implicated or alleged to be responsible include:
- ensuring, to the extent possible, that allegations and reports are not
distributed throughout the department, but are maintained in a single
personal information bank that has been duly registered in accordance with
the terms of the Privacy Act. Preferably, this information bank would
be under the control of the departmental coordinator referred to under
"procedural requirements";
- except as may be required for a formal legal proceeding or as otherwise
prescribed by law, maintaining the confidentiality of persons who reported
incidents or made allegations;
- ensuring that information is not placed in personnel files, unless it
relates directly to a staff relations action, such as a disciplinary measure
and the employee is aware that such action has been - or is being - taken;
and
- ensuring that when an allegation against an employee cannot be
substantiated
- all records of the matter not required for audit are promptly destroyed,
- records required for audit are segregated and access is restricted to that
purpose, and
- any superior (or other person in a position of influence, such as a
staffing officer) and any co-workers who had knowledge of the allegation
are informed that it could not be substantiated.
13. Risk assessment
Risk assessment and the taking of preventative measures are often as
important - and sometimes even more important - than action taken to respond to
a particular incident. These should therefore be an integral part of any
investigation. As part of any response to an incident, a department should also
assess the possibility of the same thing having happened or happening again;
first, elsewhere within the department; second, in other departments with
similar programs, clientele or exposure; and third, across all departments.
14. Preventing losses
Measures to prevent or minimize losses include:
- giving special attention to areas of significant risk or exposure, such as
- social benefits and other grants and contributions, and
- all major Crown projects and procurement contracts;
- in conjunction with departmental security advisers and, as appropriate,
local police or the RCMP, periodically reviewing the adequacy of the
facilities for safeguarding cash, travellers' cheques, and other negotiable
instruments (for policy, guidelines and standards, see the
"Security" volume of the Treasury Board Manual);
- giving particular attention to the following, which have caused losses in
the past, and which continue to do so:
- petty cash that is not properly secured or, if secured, the key is left in
a desk drawer or a similarly accessible location,
- petty cash, money safes, and other security storage facilities that are
left unlocked during working hours,
- cash or travellers' cheques that are transferred between employees without
proper receipts or other acknowledgement of the amounts transferred being
prepared, and
- money that is left on a desk or a counter;
- ensuring that, to the maximum extent possible
- payment of locally engaged staff and other persons not paid through the
pay system of Supply and Services Canada is by cheque or direct deposit
rather than in cash, and
- when such payments must be in cash, the department uses pay envelopes that
are prepared in advance, reconciled to the total cash withdrawn for the
purpose before being distributed, and signed for when distributed;
- ensuring that procedures for handling cash receipts, petty cash and
travellers' cheques are such that the person(s) responsible can be held
accountable for losses and shortages and, in particular, that only the
person responsible has access to the cash;
- ensuring that adequate instructions on the handling and safeguarding of
cash, travellers' cheques, departmental bank account cheques and signature
machines are provided to employees who are responsible for them;
- ensuring that employees and on-site consultants are aware and are
periodically reminded, and that all new employees acknowledge:
- that there is a cost associated with the use of the government inter-city
telephone network and departmental facsimile services, and
- that these services are for official business only;
- ensuring that employees who have GTA "TeleCanada" cards (or an
equivalent commercial telephone charge card like Bell Canada's Calling
CardÔ ):
- are each given their own access code,
- understand and acknowledge that they are not to disclose the access code
to anyone else and that they are responsible and personally accountable for
all calls placed with the card unless it has been officially reported lost
or stolen, and
- are informed of the need to report any loss or possible compromise of
their access code immediately, and understand the procedures to follow to do
so;
- controlling access to computer terminals and programs to minimize the
possibility of unauthorized access and theft, alteration or destruction of
software and data; and
- ensuring to the maximum extent possible that:
- all physical assets are inventoried and their serial numbers recorded
(giving particular attention to computers, especially laptop and notebook
styles); and
- safeguards are in place to prevent the loss of physical assets through
negligence, malfeasance or criminal behaviour.
- (For policy, guidelines and standards, see the "Security" volume
of the Treasury Board Manual.)
1. General
defalcation (tbd) - is a term usually applied to officers of
corporations and public officials who embezzle or misappropriate public funds,
trust funds or money held in a fiduciary capacity.
fraud (fraude) - is a deliberate act of deception, manipulation
or trickery, with the specific intent of gaining an unfair or dishonest
advantage (cheating) or injuring another person or organization. Ordinarily,
fraud involves either wilful misrepresentation or deliberate concealment of
material facts for the purpose of inducing another person to either part with
cash or something else of value or to surrender a legal right.
malfeasance (délit d'action ou de commission) - is the
commission of an unlawful act; i.e. the wrongful doing of an act that the doer
has no right to do or that the doer is obligated not to do by contract, statute,
regulation, etc.
misappropriation (détournement) - is the act of turning money
or other property to a wrongful purpose. It is often used in the context of, but
is not limited to, the conversion of public funds to one's own use or to the use
of others; however, any use not authorized by Parliament is a form of
misappropriation.
misfeasance (faute d'exécution) - is the improper performance
of a lawful act.
nonfeasance (omission délictueuse) - is the total omission or
failure to perform some distinct act, duty or undertaking that one is obliged to
do.
robbery (vol avec violence) - is the taking of money, personal
property, or any other article of value, in the possession of another, from his
or her person or immediate presence, against his or her will, through violence
or threat of violence.
theft (vol) - is the taking of money or other property without
the owner's consent, with the intent to deprive the owner, temporarily or
permanently, of the possession, use or benefit of it. Although both fraud and
theft may result in depriving someone of property, a key distinguishing feature
is that with fraud the victim is induced through deceit or trickery to
voluntarily give up the property. With theft, the owner does not surrender the
property voluntarily and, in some cases, may not initially even be aware that it
has been taken.
2. Offences
2.1 For the purpose of reporting to law-enforcement authorities,
"offences" involve any offence under the Criminal Code or a
federal statute or regulation where the Crown is a victim. These include, for
example:
- breach of trust by a public officer;
- offences under sections 80 or 81 of the Financial Administration Act;
- theft or misappropriation of public funds or funds belonging to others
that have been entrusted to a public officer;
- false or fraudulent claims for a social benefit, a grant, a
contribution, or any other program payment, including refunds and rebates;
- forgery and fraudulent endorsement of Government payment instruments;
- conversion of public funds or property to personal use;
- theft of public property or property belonging to others that has been
entrusted to - or seized by - the Crown;
- wilful damage to, or destruction of, public property;
- break-and-enter or attempted break-and-enter;
- computer-related offences, such as:
- unauthorized illegal access,
- theft of software or data, or
- alteration or destruction of data;
- colluding, or otherwise arranging with a contractor to bill personal
goods or services to the Crown; and
- any fraud, illegality, impropriety or improper interference in the
contracting process, such as:
- kickbacks and bribery,
- bid-rigging and price-fixing, or
- deliberate short-shipment or substitution of inferior quality or
defective goods.
3. Losses
3.1 For the purpose of reporting in the Public Accounts, "losses"
include any loss resulting from an incident referred to above as an offence,
plus:
- paid to, or collected or received by a public officer or any other person
and is
- misappropriated, or
- lost, destroyed or stolen;
- paid out by a public officer or other person fraudulently;
- issued to a public officer or any other person as an imprest fund or
change float, and
is misappropriated,
cannot be accounted for in whole or in part, or
is destroyed or stolen;
- money belonging to others that is given into the custody of a public
officer in an official capacity for any purpose, and is
- misappropriated, or
- lost, destroyed, or stolen;
- an overpayment or erroneous payment that is issued or an unauthorized
expenditure that is incurred due to
- negligence or nonfeasance on the part of a government employee, or
- fraud, defalcation, wilful misrepresentation, or any other offence or
illegal act on the part of any person;
- a cheque or other payment instrument issued by the Receiver General or
issued from a departmental bank account or a revenue trust account or a
benefit warrant drawn on the Receiver General pursuant to
section 117(2) of the Unemployment Insurance Act that is
fraudulently endorsed and negotiated; and
- revenue that should have been received or collected, but that was not as
a result of malfeasance or negligence on the part of any person employed
in the receipt or collection of public money.
The contents of this appendix are mandatory since they relate directly to
- and are a further elaboration of - the policy requirements.
1. Reporting instructions
1.1 Incidents of theft, break-and-enter, and the like requiring an immediate
response are to be reported directly to the local police agency without delay.
Subject to paragraph 1.2, below, all other suspected cases of fraud,
defalcation or any other offence or illegal act against Her Majesty must be
reported promptly to the RCMP for investigation.
1.2 Suspected cases of theft, fraud, defalcation or any other offence or
illegal act involving employees that do not require an immediate response by a
police agency may be referred to departmental legal services which will consult
with the Criminal Prosecutions Section of the Department of Justice before
providing an opinion.
- When, after consulting legal services, it is determined that the act is
of a minor, employment-related nature more appropriately dealt with by
disciplinary action, appropriate action should be taken after consulting
with departmental staff relations advisors.
- When, after consulting legal services, it is determined that the act is
of a more serious nature, in addition to taking any appropriate
disciplinary action that the department determines is warranted, the
matter must be referred to the Criminal Operations Branch of the RCMP
which will decide what investigation will be undertaken and by whom.
Notes: (1) Although each case has to be judged on its own merits,
examples of minor, employment-related incidents might include, for example:
a falsified leave application;
a false claim for compensation for overtime or other extra duty;
occasional, unauthorized personal use of commercial long-distance service
or the government inter-city telephone network; or
unauthorized personal use of taxi vouchers.
(2) In providing an opinion referred to above, departmental legal advisers
are acting as representatives of the Attorney General in his capacity as such
with particular regard to the equitable administration of Justice, and not as
legal representatives of the department concerned.
1.3 In addition to being reported to law-enforcement authorities for
investigation per paragraphs 1.1 or 1.2(b) above:
- all incidents, including those employment-related incidents handled
internally per paragraph 1.2(a), must also be reported to the Economic
Crime Directorate of the RCMP for statistical and analytical purposes on
RCMP form "Criminal Offences and Other Illegal Acts Against the Crown
Involving Losses of Money or Property"; and
- when fraud, defalcation or any other offence or violation in relation to
the collection, management or disbursement of public money is involved,
the following must be reported to the Treasury Board Secretariat, as
outlined in paragraph 1.5, below:
- any loss or incident that has, or may have, government-wide implications
or application, for example, frauds that may also have been perpetrated
against other departments or that other departments should be warned about;
- incidents that may indicate a weakness in government-wide policies or
controls;
- other incidents that have been, or are likely to be, addressed or brought
to the attention of the President of the Treasury Board in Parliament or
through the media; and
- any other incident that, in the opinion of the departmental coordinator,
is sufficiently serious or significant in terms of its magnitude or its
extent to be brought to the immediate attention of the Treasury Board
Secretariat.
1.4 Departments must establish their own internal reporting requirements,
including identifying, in consultation with their minister, what types or
classes of incidents are to be drawn to the personal attention of the minister.
1.5 Reports to the Treasury Board Secretariat, when required, are to be
submitted to the Director of Financial Authorities, Comptroller Sector, Program
Branch, and shall include as a minimum:
- a preliminary report, within two weeks of identifying a reportable
incident, or, in the case of incidents referred to in (iii) above, as soon
as the possibility of being reported in the media arises that provides a
description of the nature of the loss or offence, the circumstances under
which it occurred, and what investigation is being undertaken; and
- a final report at the conclusion of the matter that:
- provides a description of what investigation has been undertaken;
- indicates whether the loss was referred to the Deputy Attorney General
and, if a reply has been received, the action recommended or taken by the
Deputy Attorney General;
- provides a description of the safeguards or other action taken to
prevent future losses and offences under similar circumstances;
- provides a description of the measures taken to recover any loss or
associated costs, the amount recovered, and the probability of further
recovery;
- indicates the results of any prosecution or legal action that has been
undertaken; and
- provides a description of any action taken to discipline a public
officer or other person by reason of whose actions the loss was suffered
or the offence was committed or made possible.
Note: The actual names of specific individuals should not be included
in these reports.
1.6 There does not have to be an actual loss of money or property before an
offence is reportable. An attempted fraud that is detected before payment is
made is as equally reportable as a successful fraud. Similarly, offences are
still reportable, even if the loss is recovered in full.
1.7 Incidents occurring outside of Canada that would be an offence if they
occurred in Canada are also reportable.
1.8 Gross losses (estimated when necessary), irrespective of any recoveries,
are to be reported in the Public Accounts, in the form outlined in the Public
Accounts Instructions Manual, for the fiscal year in which the loss occurred
or, when the loss is not discovered in time, in the first Public Accounts in
which it is practicable to do so.
1.9 Indemnifications for losses of advances in accordance with paragraph 8 of
the guidelines must also be reported in the Public Accounts, but in the section
on claims, court awards and ex gratia payments, rather than in the
section on losses suffered by the Crown.
1.10 Recoveries against losses are to be reported in the Public Accounts for
the fiscal year in which the amount is recovered or, when that is not possible,
in the Public Accounts for the next fiscal year.
2. Charging appropriations
2.1 Losses of money that require a disbursement to reimburse an imprest fund
like petty cash or another person, cashier shortages and all losses of revenue
(irrespective of whether a disbursement is required) shall be charged to the
appropriation for the related program, after approval by the appropriate
minister or such other member of the departmental senior executive committee as
may be designated in writing by the appropriate minister. In the case of cashier
shortages and losses of revenue, the appropriation is to be charged and the
applicable revenues credited with the amount of the shortage.
2.2 The charging of a loss against an appropriation is an accounting
transaction only. Departments are still responsible for attempting to recover
the loss and must still take appropriate disciplinary action when it is
warranted. In this regard, it is to be noted that under section 3 of the Accountable
Advances Regulations, an individual to whom an advance is issued is
personally responsible and accountable for that advance and losses or shortages
are recoverable from the holder or custodian thereof. Thus, petty cash shortages
are recoverable 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.
However, even when one or more of the above conditions has not been
satisfied, a custodian may nonetheless be released from his or her
accountability, in whole or in part, if the manager concerned 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
- permitted improper or inappropriate practices to be followed.
In this case, accountability for the loss would shift to (or in the case of a
partial release, be shared by) the manager, and guideline 9 on accountability
and recovery from managers would then apply.
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