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Bernard Ouellet
Treasury Board Secretariat
December, 1997
General
Aliases: coding block, chart of accounts
Receiver General Directives
1989-1 Data Capture and Input for the Central Accounting System (CAS)
- Source Codes, PWGSC Responsible Site Numbers and Department Numbers
Financial transactions classification system: a system used to
provide information for multiple uses both within and outside departments. The
classification system provides the framework for identifying, aggregating, and reporting
financial transactions for planning, resource allocation, management control, accounting,
statistical, and evaluation purposes.
Chart of Accounts Committee: Interdepartmental Committee Chaired by
Greville Price from Treasury Board Secretariat that recommends all changes to be made to
federal financial classification system.
Statutory Requirements. The accounts of Canada required by the
Financial Administration Act sections 9 and 63. Government accounting principles and
policies that underline the Accounts of Canada are described in Note 1 to the Annual
Financial Statements of Section 1 of Public Accounts of Canada.
Current Policy Requirement. To meet financial information
requirements, the classification of accounts requires a four-way classification of
transactions by authority, purpose, responsibility and object. To meet government-wide
financial information requirements, departments must provide information to the Receiver
General for certain uniform classifications that are maintained in the central accounting
system by the Receiver General. (Chapter 2, Chart of Accounts volume, TB Manual)
Departmental coding requirements responsibility. The coding
provided to the Central Accounting System by each department must be individually
established and agreed to by the Government Operational Sector at PWGSC, which is
responsible for maintaining the Central Accounting System.
Application:
The government of Canada accounting entity.
An accounting entity is an aggregate of all recognizable units or
bodies carrying on activities which are treated as one for purposes of financial
reporting. The government of Canada accounting entity, as described in Section 2 of the
Financial Administration Act (FAA) is defined as: any of departments named in Schedule 1
to the FAA; any other division or branch of the Public Service of Canada, including a
commission appointed under the Inquiries Act, designated by the Governor in Council as a
department for purposes of the Financial Administration Act; the staffs of the Senate,
House of Commons and the library of Parliament; any departmental corporation named in
Schedule II of the FAA; and Consolidated Crown Corporations (Schedule 3 part 1 of FAA).
Enterprise Crown Corporations (Schedule 3 part 2 of FAA) are excluded from the government
of Canada accounting entity.
Purposes:
Identifying transactions
Aggregating transactions
Reporting financial transactions
Financial planning
Resource allocation
Management control
Accounting
Statistical analysis
Audit
Review and evaluation
Uses:
Reporting financial transactions
Financial planning and forecasting
Economic analysis and policy formulation
Financial and investment analysis
Resource allocation
Management control
Parliamentary and Budgetary control
Accounting
Statistical analysis
Audit
Review and evaluation
Costing, cost accumulation, pricing
Performance Measurement
Collective bargaining
Informing the public
Users:
Departments
Finance
Treasury Board Secretariat
Statistics Canada
The public
Parliament
Auditor General
General principle: Garbage in garbage out.
Definitions (refer to Annex A)
Financial Classification Structure Types:
The "who is accountable" classification: officially
called classification by responsibility. A type of classification that identifies the
organizational unit responsible and accountable for the transaction, from the highest
managerial level, where a single official is responsible for a program, to progressively
lower levels of responsibility; it identifies the organizational unit responsible and
accountable for the use of "funds" (authority) provided by Parliament.
The "Financial reporting account" classification: This is the
traditional private sector balance sheet and income statement classifications grouping the
assets, liabilities, equity, revenues and expenses of the government. It is used to
identify the relevant asset, liability, equity, revenue, or expenditure account for
financial reporting (maintaining accounts in a General Ledger) and for preparing financial
statements.
The "Financing by Parliament" classification: officially
called classification by authority. A type of classification that identifies the
Parliamentary appropriation (vote) or other authority under which the transaction has been
authorized through the legislation; it also enables management within departments and
agencies to maintain records and to report to Parliament on the exercise of the related
authorities, and determines the account to which the transaction is to be recorded in the
central accounts and the Accounts of Canada, and also whether the transaction is budgetary
or non budgetary.
The "why" classification: officially called classification by
purpose. A program and activity (sometimes called business line in the Estimates)
classification that identifies the program or service provided. It provides a breakdown of
the expenditures/revenues of each program by activity and sub-activities in the Estimates,
which can then be aggregated to determine the purpose for which funds are spent or
revenues collected to attain program objectives.
The "what" classification: officially called classification
by object: A type of classification that accounts for the type or nature of expenditures,
the sources of revenues, and the causes of changes to financial claims and obligations
(assets and liabilities). To accommodate the need for differing degree of details, there
are several levels of classification by object. In descending order of aggregation, they
are categories, sub-categories, standard objects, reporting objects, sub-reporting
objects, economic, source and class objects, and departmental line objects.
The internal/external classification: which will replace standard
objects 15 and 16. The purpose of this classification is to identify and eliminate
transactions internal to the government when we produce consolidated financial statements.
Other classification (financial code area): At departmental level only
(not contained in government-wide chart of accounts). It is used to accommodate specific
requirements of individual departments for information such as work order code, project
code, province and the like.
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Classification |
What is it |
Why is it needed |
Required for |
Policy Requirement |
Related fields |
1 |
Responsibility |
Who is
accountable for a transaction |
Identifies
minister and unit accountable |
Parliament
Estimates and OPF
Public
Accounts |
Main Estimates
and Appropriation Acts |
Ministry
Department or agency
Branch/Region
Division/Location
Responsibility Centre
Cost centre |
2 |
Financial Reporting
Accounts |
Accounts for assets, liabilities, revenues and expenditures of the government |
To maintain the General Ledger To prepare financial statements |
Parliament Financial statements Public Accounts MSFO |
Section 63 of FAA Accounts of Canada |
Accounts of Canada
Level 1
Level 2
Level 3
Level 4
Level 5 |
3 |
Authority |
Authority from
Parliament for a transaction |
Identifies
statute or vote under which transaction is authorised |
Parliament Public
Accounts |
Section 63 of
FAA Various statutes Main Estimates and Appropriation Acts |
Budgetary /
non-budgetary
Statutory / non-statutory
Vote
Allotment
Sub-allotment |
4 |
Purpose |
Why was transaction undertaken |
Identifies program or service provided |
Estimates and OPF Treasury Board |
Main Estimates TB manual on COA |
Policy sector Program Activity
Sub-activity
Activity element |
5 |
Object |
a) Type of
good, service or transfer payment
b) Source of revenue
c) Why balance of asset or liability changed |
Identifies type
of good or service acquired or transfer payment made Identifies revenue source Identifies
reason for changes to assets and liabilities |
Public Accts
(std obj) Estimates (std obj) Stats Canada |
TB manual on
COA |
Category
Standard object
Reporting object
Economic, source or Class object
Line object |
6 |
Internal/ External |
Is transaction internal to the government |
To eliminate internal transactions to produce consolidated amounts |
Financial stats Public Accounts MSFO |
Sec 64 of FAA
TB manual on COA |
Internal or External |
7 |
Geographic |
Province of
resp. centre |
Identifies
province where transaction took place |
Stats Can |
Stats Can need |
Province
Responsibility Centre |
8 |
Other (optional) |
Other data required by
departments |
Identifies projects or other data |
Departments |
None |
Project code |
Organizational:
Level 1:Ministry (collection of legal entities under 1 minister)
Level 2:Department (legal entity)
Level 3:Region
Level 4:District (geographical)
Level 5:Responsibility centre (budget, accountability)
Level 6: Cost centre (accumulation of cost, e.g. building)
Financial Reporting Accounts (Private sector balance sheet and income statement
classifications):
Level 1 (top level of aggregation e.g. assets, Liabilities, Expenditures, Revenues
Equity (accumulated debt))
Level 2 (e.g. Current assets)
Level 3 (e.g. Cash)
Level 4 (e.g. Cash balances in CRF)
Level 5 Departmental input (e.g. Canadian cash balances in CRF)
Authority Structure:
Level 1: Budgetary and non-budgetary
Level 2: Statutory and non-statutory
Level 3: Authority type (vote and/or appropriation)
Level 4: Treasury Board allotment
Level 5: Departmental allotment
Level 6: Departmental sub-allotment
Purpose Structure:
Level 1: Policy Sector
Level 2: Program
Level 3: Activity
Level 4: Sub-activity
Level 5: Activity element
Object Structure:
Level 1: Categories - 10(4 expenditures, 2 revenues, 4 financial claims and
obligations).
Level 2: Sub-categories ( e.g. under expenditures: Services, goods, transfer payments,
other expenditures).
Level 3: Standard objects (highest level used for Parliamentary and executive purposes).
Level 4: Reporting objects (A sub-division of standard object e.g. material and supplies
under Utilities, Material and Supplies).
Level 5:Economic, Source, and class objects (for expenditures, revenues, financial claims
and obligations, respectively).
Level 6: Line objects (use at departmental level to further break down level 6).
Level 7: Pay entitlement codes. (Basic pay, acting pay, arrears acting pay). Coded by the
personnel office.
Internal/External Classification
Level 1: Internal or external to government.
Financial code area classification.
To accommodate requirements of individual departments e.g.: work order code, project
code, province, constituency.
How to Process Transactions
Data banks
Departmental
Financial
Human Resources
Contracting
Real Property
PWGSC
Central Accounting System (Detailed Transactions for each account)
Central Agency and Information System
Contracting Information
Real Property
Pay System
Central Cash Receipt and Cash Payment Systems
Treasury Board Secretariat
Human Resources
Expenditure Analysis
Human Resources
Real Property (Directory of federal real property)
Contracting
Official languages
Statistics Canada (National Accounts, Statistical Information)
Departmental input to Central Accounting System (CAS). 204 characters long record
and made up of:
Departmental input coding block (25 characters maximum, 9 characters per field
maximum). Departmental financial control codes within this block can be used to
accommodate requirements of individual departments for such as work order code, project
code, province and the like. A department may impose up to 25 digits from a code with a
total limit up to 80 digits in the Central Accounting System (CAS) for all such fields.
Process control and information fields (refer to definition).
Amount fields
Description fields
Structure of input coding block:
Government-wide classifications maintained in the central system
Departmental classification of accounts in departmental systems
Annex A
Definitions
Line of coding: a record that identifies the financial data used to
describe a transaction.
Accounts of Canada: The centralized record of financial
transactions of the Government of Canada, maintained by the Receiver General. The accounts
of Canada summarize revenues, expenditures, asset, liability, and equity accounts
(accumulated deficit).
Appropriation: An authority from Parliament to pay money out of the
Consolidated Revenue Fund.
Budgetary or transaction: A transaction that enters into the
calculation of the annual deficit surplus of the government, i.e. the receipts from tax
and non-tax revenues together with the expenditures authorized by legislation. Such
charges include those for work performed, services rendered, expenditure internal to the
Government, the cost of servicing the public debt, operating and capital expenditures,
transfer payments and subsidies to other levels of government, organizations and
individuals, payments to Crown Corporations, and budgetary revenues.
Central account number: A government-wide collator code used by the
Receiver General to record the accounts of Canada. It identifies the authority, department
and general ledger code under one unique code. Under FIS three classifications will be
used to replace the central account number.
Central Accounting System (CAS): The central data bank of the
Government Accounting System which collects, authenticates, validates, records, and
reports all financial transactions of the Government of Canada. It is administered by the
Receiver General for Canada and consists of the Central Data Bank, the Central Agencies
Information System (CAIS), the Departmental Reporting System (DRS), their associated input
systems and all output therefrom. The CAS contains approximately 650,000 detailed account
balances.
Central imposed coding: Mandatory coding (i.e. versus optional).
Required for meeting coding requirements of Parliament and corporate users.
Chart of accounts: A list of the account numbers and designations
in a ledger. A system that defines the hierarchical relationship of the codes within each
coding field.
Client imposed code: Additional codes, set up by individual
departments and agencies, in the Central Accounting System (CAS) from the codes that are
included in their input coding block. Such codes could include responsibility
centre, activity or object codes that departments require for their own management and
control purposes, other codes needed to produce special reports for central agencies, or
specific financial control information codes.
Coding: The process of identifying a transaction by one or more
predetermined digits arranged in fields.
Coding Block: The assembly of all coding fields within the
departmental coding structure.
Coding manual: A departmental manual that documents the use of
departmental codes. It explains the use and significance of each field in the departmental
code of accounts and lists all the valid codes with adequate narrative description of each
code.
Collator: Collators are random numbers used by systems to describe
a unique situation or a set of characteristics. These codes meet the requirements of one
or more classifications to reduce the number of digits required to code a transaction.
Consolidated Revenue Fund (CRF): The aggregate of all public moneys
that are on deposit at the Credit of the Receiver General of Canada.
Field: One digit or a group of digits allotted to a specific
purpose (e.g. vote, line object, activity).
Financial code area of the coding block: It is used to accommodate
requirements of individual departments for such as work order code, project code, province
and the like. A department may impose up to 25 digits from a code with a total limit up to
80 digits in the CAS for all such fields.
Input coding block: The coding entered by each department to meet
the government-wide mandatory uniform requirements; and other classifications required by
departments for its own management and control purposes.
Non-budgetary transaction: A transaction that does not impact on
the deficit consists of loans, investments and advances, primarily to Crown Corporations
and to provincial and foreign governments, government employee's pensions accounts,
other specified accounts (e.g. trust accounts), interest and debt accounts, and other
assets and liability transactions.
Pay Entitlement Codes: Classifies the type of remuneration paid to
employees pursuant to a collective bargaining agreement, the terms and conditions of
employment, or other arrangements. These codes are issued by PWGSC.
Process control and information fields: Other than coding fields
some data elements or fields for process control or information purposes are mandatory for
all financial transactions entered in the CAS, and must be in accordance with the
requirements specified by the Receiver General (RG). These include:
– Control codes, which are established by the Receiver General for
process control purposes. Such codes include the department, source codes, the PWGSC
district office which accepts and inputs the data to the CAS, and a batch number which is
usually controlled by the department. Departments may include other financial control
information for their own purposes, such as the departmental accounting office.
– Data elements that PWGSC require for various processing purposes
such as goods or services received date, accounts payable voucher numbers (APV), fiscal
year and fiscal month.
– Other information fields which departments may use include
purchase requisition numbers, departmental reference numbers, financial encumbrance
numbers, or a description of the transaction. Other data elements and descriptive
information are also generated by PWGSC from its payment and payroll systems, which can be
used by departments for their own purposes.
Source codes: Codes specified by the Receiver General and that
serve three main functions:
Input and output control. Used in conjunction with other input fields
they ensure balance between input and output.
Analysis and reconciliation.
Offset entries. The central accounts are maintained on a double-entry
basis. The source codes are used by the system to generate the required offset entries
from single sided departmental input.
Statutory expenditures: expenditures that have been given
continuing authority by Acts of the current or previous Parliaments and therefore require
no new Parliamentary approval on annual basis. They are included in the Estimates for
information purposes only.
Transaction: An event or condition the recognition of which gives
rise to an accounting transaction.
Translation tables (alias: dictionaries): Tables used to associate
a code with another code. For example departments use Public Works and Government Services
dictionaries to translate departmental line objects to government-wide economic objects
(dictionary 1 , activity elements to government-wide activity classification (dictionary
8) and departmental codes to RG central accounts numbers (dictionary number 2).
Source of terminology:
Vocabulary of government – Financial Management (232) –obtain in
bookstore.
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