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OUTLINE
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Cancelled payments processed via
the Standard Payment System (SPS) which are subsequently rejected by the
Regional Pay System (RPS) will require a manual work-around process. In
these situations, manual adjustments are required to the RPS master file,
the Payroll System General Ledger (PSGL), and the Departmental Financial
Management System (DFMS).
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PROCEDURES
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Department
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- RETURNS cheque to PAO for cancellation
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PAO Accounting Clerk
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- ENTERS the payment reference number (PRN) information into
SPS with the reason code "returned".
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- SPS retrieves the payment record based upon the PRN and updates the
appropriate reason code to the record.
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- PRN and net payment value are extracted and sent to the RPS with a
reason code of "returned" via a Post Issue File (PIF).
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- RPS generates a PAC 19 and a Client Action Return File (CAF) is picked
by SPS daily.
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- SPS return to RPS a Cancelled Payment Register File (CPR) which contains
all the payments from the RPS--CAF. SPS now assigns a Requisition #
unique for each pay office (PO).
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- RPS matches the CPR to the RDB (Register Data Base), and if a match
is made RPS adds the SPS requisition #.
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- SPS also updates the Receiver General--General Ledger (RGGL) which
will provide this information to the Payment Control Account in the
PSGL.
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IF THE PAYMENT CANNOT BE PROCESSED AUTOMATICALLY
AND IS REJECTED IN THE RPS--NON-FINANCIAL INFORMATION STRATEGY (FIS) COMPLIANT
DEPARTMENTS
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Compensation Sector (CS) Accounting
Advisor
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- PROVIDE in-depth instruction to the Accounting Unit with regard
to corrective activity.
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* CONDITION--Cancelled Cheque (outside of
RPS)
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Action: PSGL--The Payroll Control Account,
the applicable sub-ledger accounts, the Payment Control Account as well
as the deduction accounts must be adjusted based on the cancellation information
sent by SPS to the RGGL and source documentation received from Regional
Pay Offices.
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CS Accounting Advisor
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- DEBIT the appropriate deductions.
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- CREDIT Payroll Control for the gross amount of the payment.
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- DEBIT Payment Control for Net amount of payment.
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Action: RPS--The individual's Master
Employee Record (MER) must be adjusted for gross pay and deductions related
to the cancelled cheque. The Pay Clerk will initiate a PAC 30 transaction
to adjust the MER total. An "authority document" will be provided
to the Pay and Pension Clerk by the Accounting Unit. This document will
be returned to the originator with a signature as well as a sequence number
validating that the corrective action to the MER has been processed.
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Action: Central Accounting System (CAS)--The
Department's Responsibility Centre coding must be adjusted by Source 060
Interdepartmental Settlement (IS) Requisition (debtor initiated) to reflect
the reduction in gross payroll expenditure.
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Action: Department--The affected department
receives an IS notification for information purposes in updating their records.
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- DEBIT Payroll Control for Gross Value of payment.
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- CREDIT Salary Expense for Gross Value of payment.
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| NOTE:
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Gross Value of payment = Gross
Entitlements less Credit Backs and overpayments created as a result
of non-reversible deductions.
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If there are non-reversible
deductions, an overpayment must be established. To do this there should
be a debit for the value of the deductions to the department 079 Payroll
Control Account and a credit for an equal amount to the departments
406 Accounts Receivable Account.
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- The Pay Office should also enter PAC 30 transactions to adjust the
employee master file in order for the earnings records to be properly
reflected. If the payment is more than two years old, a manual amended
T4 may be required.
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(CS) Accounting Advisor
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- Following a defined period of time, SPS will advise the PAO that a
returned payment remains outstanding and will be automatically cancelled
unless otherwise advised. If the PAO wishes the payment to be cancelled,
they must ensure that manual activities described above have taken place
to adjust the RPS master file and report the expenditure to the DFMS
and the PSGL in order for the client department to reconcile their trial
balances reported through the Central Financial Management Reporting
System (CFMRS).
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| NOTE 1:
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Refer also to section
9-4 of the PAO manual for further information concerning Department
079 Control Accounts.
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| NOTE 2:
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Any variances to the above will be referred
to the CS Accounting Advisor. Detailed instructions will be provided
to the appropriate accounting unit for co-ordination of corrective
activity and follow-up.
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