Ministerial budgets are funds that are available for portfolio and other
official government business. These budgets are in addition to and separate from
entitlements that a minister has as a member of Parliament. This document deals
only with the budgets of ministers.
The entitlements related to being a member of Parliament are explained in
detail in the Members' Allowances and Services Manual published by the
House of Commons, and questions related to these entitlements should be referred
to the Office of the Comptroller, House of Commons.
A minister's budget is an integral part of a department's budget and is
subject to the same provisions of the Financial Administration Act (FAA)
that apply to all departmental funds. The FAA is intended to assure parliamentary
control over public money by prescribing a financial control framework over all
financial transactions. Many of the financial management provisions in the
FAA are put into force through Treasury Board-approved policies. Therefore,
unless specifically exempted, ministers' budgets are also subject to Treasury
Board policies and regulations.
Ministers' budgets are subdivided into four parts and must be controlled
separately. These budgets are funded from within the existing respective
departmental reference levels. See Appendix B for more specific details on
dollar values of the budgets and any limitations, specifically:
- ministers' salary and motorcar allowances;
- ministers' exempt staff salary budgets;
- ministers' operating budgets; and
- departmental staff salary budgets.
Ministers may transfer funds from their operating budgets to their exempt
staff salary budgets and vice versa. The annual transfer limit is between
$50,000 and $100,000 determined proportionally based on the size of the budget
granted to the minister as set out via written communication (see Appendix B).
When funds are transferred to the exempt staff salary budget from the operating
budget, a department must set aside an additional amount equal to 20 per cent of
the funds to cover employee benefit costs. Alternatively, if funds are
transferred from exempt staff salaries to the minister's operating budget, the
amount includes 20 per cent of the funds in lieu of employee benefit cost. This
20-per-cent transaction is outside the minister's office budget. Only specified
direct costs can be charged to the exempt staff salary budget. No transfers to
or from the departmental salary budget are permitted.
Ministers may access the departmental carry-forward for the portion of their
unexpended exempt staff and operating staff budgets from one fiscal year to the
next up to a maximum of five per cent of their originally constituted budget as
of April 1. Ministers may use these funds for either Minister's Office or
regional representation exempt salary or operating expenses. This authority does
not extend to ministers' departmental staff budgets.
Expenditures against a minister's operating budget, or against the exempt
staff budget for the portfolio or for other official government business, are
charged against a "program" or "operating" expenditure vote
in the appropriate department. The public funds in these budgets should be spent
only with the usual high standards of prudence and probity. The Treasury Board
of Canada Secretariat periodically compiles data on how much each minister's
office spends on such items as salaries for exempt staff and departmental staff,
and operating costs.
Ministers are individually responsible and accountable for dealing with all
public inquiries about the expenditures made for their offices-whether by them
directly, by their staff or on their behalf-including publicly justifying them
if the need arises.
Expenditures against a minister's exempt staff budget and operating budget
must be limited to the types of expenditures that can be legally charged against
each budget-in other words, the expenditures must clearly fall within budget
parameters (scope, purpose, and limits).
There are specific types of expenditures that should be charged to specific
budgets in the ministers' budgets, as outlined below. Some expenditures may be
reimbursed from Treasury Board Vote 5 or charged to the departmental operating
budget; these are also outlined below.
A minister's salary and motor vehicle allowance are statutory expenditures.
This means that these resources are conferred on a continuing basis and are not
voted upon annually by Parliament. However, as noted in section 6.2, the
ministers of the Treasury Board have established a policy covering motor
vehicles.
Ministers, except the prime minister, receive a prescribed exempt staff
salary budget to manage their offices. This budget is over and above any budget
to which the minister is entitled as a member of the House of Commons. The
budget provided by the House of Commons is used to pay for staff in the House of
Commons office and in the constituency office.
The Treasury Board periodically sets the size of a minister's exempt staff
salary budget. The president of the Treasury Board notifies each minister of the
annual amount in writing, according to the previous written communication. The
exempt staff budget is to be allocated from within existing departmental
reference levels.
Budgets cannot be exceeded. A minister who wishes to have his or her budget
increased must seek approval from the Treasury Board. The minister and the
president of the Treasury Board should discuss all such requests first.
When a minister changes portfolios during the course of the year, the budget
for the remainder of the year in the new portfolio is to be equal to the free
balance remaining in the previously held portfolio as at the date of the change
(after outstanding commitments have been paid). When a new portfolio is created,
or when a minister is appointed to a portfolio after a change in government, the
new minister is allowed a pro-rated amount representing the budget for the
balance of the fiscal year in progress, as set by the Treasury Board.
Only direct personnel costs can be charged to the exempt staff salary budget,
including the following:
- salaries (including pay while on leave);
- pay for unused vacation leave, at the request of the exempt staff with the
approval of the minister, on termination of employment, or paid out at the
end of each fiscal year; and
- salary for the 30 days' employment to which exempt staff are entitled when
a minister ceases to be a minister (see section 3.7.5).
The operating budget of a minister covers all operating expenditures incurred
by exempt staff or by departmental staff in the minister's office, provided the
costs are related to the conduct of portfolio or other official government
departmental business.
The following costs will be charged to a minister's operating budget:
- official gifts, travel, hospitality, and other services in relation to the
department;
- conference and training costs for exempt staff;
- relocation of exempt staff to the minister's departmental office (on
appointment only);
- office furniture and furnishings for ministers and their private
secretaries that are over and above normal departmental standards;
- fees for professional outplacement services;
- the cost of professional and temporary help services for the minister's
departmental office; and
- all other expenses related to the operation of a minister's departmental
office.
Other exempt staff-related costs, as described below, are to be funded as
indicated.
Departments may request funding centrally, through Treasury Board Vote 5, as
for other public service employees for the following:
- maternity or parental benefits (Supplemental Employment Benefit);
- vacation pay for unused vacation leave on termination of employment when
at termination of employment the employee is eligible for severance pay; and
- severance pay.
Departmental operating budgets:
Costs related to departmental personnel assigned to a minister's office must
be charged to the departmental salary budget. These costs must be accounted for
separately as part of the minister's office expenditures. Costs such as
equalization payments, bilingualism bonuses, and overtime are to be included in
the minister's departmental staff salary budgets. Other personnel-related costs
will be funded in accordance with existing departmental practices for public
service employees.
Treasury Board policies related to financial management are generally found
in the comptrollership policies, which are available at http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/TBM_142/siglist_e.asp.
These policies provide directives and guidelines governing the accounting and
control of expenditures and outline the framework for exercising financial
authorities to satisfy the requirements of the FAA. Essentially, there are two
types of authority related to expenditures-spending authority and payment
authority.
Two major requirements related to financial authorities are 1) no person can
exercise both spending and payment authority for a payment; and 2) no person can
exercise spending authority over a payment from which he or she can benefit
personally, nor should a person be involved in any of the processing steps with
respect to his or her own pay and benefits.
Reference: Treasury Board Policy on Delegation of Authorities, which
can be found at http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/TBM_142/2-1_e.asp.
Spending authority consists of four elements-expenditure initiation,
commitment control, contracting, and confirmation of contract performance and
price.
The minister is responsible for, and has spending authority over, the exempt
staff and office operating budget. Often, the minister will delegate some of
this authority to the chief of staff or other senior exempt staff. However, this
delegation does not apply in instances where a minister wishes to hire, dismiss,
or set salaries for exempt staff.
4.5.1.1 Expenditure initiation
This authority is delegated to ministers to initiate expenditures against
their budgets, requisition goods and services, hire staff, extend hospitality,
and the like. However, before the expenditure is actually made, the contract
entered into, or the arrangement made, there must be a confirmation that funds
are available-the commitment authority.
4.5.1.2 Commitment authority
Under section 32 of the FAA, ministers, or financial officers acting
on their behalf, must control commitments and ensure that funds are available
within existing appropriations to discharge the financial commitment that would
result from the contract or other arrangement.
Controls over commitments and expenditures must be maintained to ensure that
neither the exempt staff nor the ministerial operating budgets are overspent.
Reference: Treasury Board Policy on Commitment Control, which can be
found at http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/TBM_142/2-4_e.asp.
4.5.1.3 Authority to Contract
The authority to acquire material and goods is delegated to the minister from
the minister of Public Works and Government Services. The minister is ultimately
responsible to Parliament for all contracting activity. Within the minister's
office, the authority to contract may be delegated to the minister's chief of
staff.
Officials delegated such authority are to exercise it with prudence and
probity so that the responsible minister is acting and is seen to be acting
within the letter and spirit of the FAA, the Government Contracts
Regulations, and the Treasury Board's contracting directives and policy.
Please see Part 7 for further details on contracting.
In March 2004, the government announced a new policy on the mandatory
publication of contracts over $10,000. Please see Part 7 for further details.
4.5.1.4 Certification and Verification of Payment for Work, Goods, or
Services
Expenditures incurred by ministers and their exempt staff are subject to the
account verification process and must be certified under section 34 of the FAA
prior to payment.
Under section 34 of the FAA, ministers are obligated to confirm that goods
have been received or the work performed satisfactorily and that the price
charged is correct. This account verification process includes checking that the
relevant contract terms and conditions, including price, quantity, and quality
have been met and, if an advance payment is being made, that it is required by
the contract and that all relevant statutes, regulations, orders in council, and
Treasury Board policies have been complied with. Financial officers with payment
authority under section 33 of the FAA are responsible for the quality of the
account verification process performed pursuant to section 34 of the FAA.
The account verification process must provide for auditable evidence of
verification, including the identification of the various individuals who
performed the verification.
Reference: Treasury Board Account Verification Policy, which can be
found at http://www.tbs-sct.gc.ca/pubs_pol/dcgpubs/TBM_142/Accver_e.asp.
Payment authority is the authority to requisition payments. Pursuant to
section 33 of the FAA and the Payments and Settlements Requisitioning
Regulations, 1997, requisitions for payments may be made only if the
payment has been verified under section 34, if there are sufficient funds
available in the appropriation to make the payment, and if the payment has not
been made previously.
Payment authority is usually delegated to departmental financial officers.
The departmental financial staff verifies the minister's certification (or
that of a delegate) under section 34 and any required supporting documentation
before requisitioning payment under section 33.
While, for reasons of confidentiality, some payment requests by ministers do
not have to be supported by receipts and other documents that provide evidence
of goods and/or services received, these supporting documents should
nevertheless be retained in the offices of the ministers. In the absence of
supporting documentation, there is normally a requirement for an official
certification or attestation by the minister, and an original signature (not
that of a delegate) is required.
Reference: Treasury Board Policy on Payment Requisitioning and Payment on
Due Date, which can be found at http://www.tbs-sct.gc.ca/Pubs_pol/dcgpubs/TBM_142/2-6_e.asp.
It is government policy that departments:
- have an effective, independent, and objective internal audit function that
is properly resourced to provide sufficient and timely assurance services on
all important aspects of its risk management strategy and practices,
management control frameworks and practices, and information used for
decision making and reporting;
- incorporate internal audit results into their priority setting, planning,
and decision-making processes; and
- issue completed reports in a timely manner and make them accessible to the
public with minimal formality in both official languages.
Any charges against the departmental appropriation, including those incurred
by the minister or his or her office, fall within the scope of the internal
audit function.
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