DAOD 1018-0, Revenue Management

Table of Contents

1. Introduction
2. Policy Direction
3. Consequences
4. Authorities
5. References

1. Introduction

Date of Issue: 2000-08-30

Date of Last Modification: 2017-10-18

Application: This Defence Administrative Order and Directive (DAOD) is a directive that applies to employees of the Department of National Defence (DND employees) and an order that applies to officers and non-commissioned members of the Canadian Armed Forces (CAF members).

Approval Authority: Assistant Deputy Minister (Finance)/Chief Financial Officer (ADM(Fin)/CFO)

Enquiries: Director Financial Policy (DFP)

2. Policy Direction

Context

2.1 The DND has received special revenue spending authority from Parliament in the form of net voting authority in Appropriation Acts and under the Surplus Crown Assets Act, which permits the respending of certain non-tax revenues that were previously deposited in the Consolidated Revenue Fund (CRF). In the case of net voting, the authority is to offset certain related DND operating expenditures incurred in the same fiscal year that the revenue is received.

2.2 Revenue received by the DND consists of non-respendable and respendable revenue.

2.3 The non-respendable revenue that the DND does not have authority to immediately keep and respend includes:

1. refunds from expenditures in past fiscal years;
2. certain recovered funds from the United Nations;
3. refunds of certain North Atlantic Treaty Organization contributions;
4. interest earned;
5. royalties received for the use of Crown-owned patents or other intellectual property; and
6. proceeds from the disposal of real property or immovables.

Note – Funds received from the use of Crown-owned patents or other intellectual property, or the disposal of real property or immovables, may be accessed by the DND through the Supplementary Estimates.

2.4 The respendable revenue is divided into corporate and local revenue. Corporate revenue is generally received for authorized activities that are tasked, undertaken or negotiated by National Defence Headquarters and is respent centrally. Local revenue is revenue that may be generated through the authorized provision of goods or services at the local level where the local operating budget has incurred the related costs of that provision.

2.5 Corporate revenues include the following, but only to the extent that there are equivalent and related offsetting operating expenditures made in the same fiscal year that the revenues are received:

1. authorized sales of some operational equipment;
2. commissions;
3. gains on currency exchange coded to fund C123; and
4. invoices issued centrally and coded to fund C118 and revenues from the Canadian Forces Housing Agency coded to fund C112, for items such as recoveries from foreign militaries and rent for family housing.

2.6 Local revenues include the following, but only to the extent that there are equivalent and related offsetting operating expenditures made in the same fiscal year that the revenues are received:

1. revenues produced from providing authorized access to, or use of, facilities or land, or from the authorized loan of materiel;
2. revenues produced from the provision of utilities excluding family housing;
3. revenues produced from the local authorized sales of food;
4. revenues produced from the local authorized sales of petroleum, oil or lubricants;
5. revenues produced from the local authorized provision of services;
6. recoveries for parking fees on defence establishments; and
7. recoveries for damages and losses.

2.7 Accounts receivable (AR) are established when:

1. goods or services are provided by the DND; or
2. there are any amounts otherwise owed to the DND.

2.8 The Financial Administration Manual (FAM), issued by the ADM(Fin)/CFO, interprets Government of Canada financial policies applicable to the DND and the CAF, and sets out financial administration policies, including those related to revenue management and AR.

Policy Statement

2.9 DND employees and CAF members are responsible for the effective and efficient management of all revenues and AR. They must ensure that all public money owed to and received by the DND is appropriately controlled, properly safeguarded and recorded in the Defence Resource Management Information System (DRMIS) in a timely and accurate manner, and promptly deposited in the CRF in accordance with Treasury Board (TB) requirements. They must also ensure that there is proper segregation of duties among all personnel involved.

Requirements

2.10 Revenue management is subject to the provisions of the relevant financial policies and directives set out in the References section. All DND employees and CAF members responsible for revenue receipt and AR management must act in accordance with these policies and directives. Managers must ensure that DND employees and CAF members are aware of these policies and directives and their proper application.

2.11 DND employees and CAF members are encouraged to report to the DFP any instance of non-compliance with this DAOD or the relevant financial policies and directives set out in the References section. DND employees should be aware of the application of the Public Servants Disclosure Protection Act in any report of “wrongdoing”, as this term is referred to in section 8 of that Act.

2.12 DND employees and CAF members who act in any office or employment connected with the collection, management or disbursement of public money, and have knowledge or information of the contravention of the Financial Administration Act, or its regulations or any revenue law of Canada by any person, or of fraud committed by any person against Her Majesty under that Act or its regulations or any revenue law of Canada, are reminded that their failure to report, in writing, that knowledge or information to a superior officer, is an indictable offence under paragraph 80(1)(e) of that Act. Also, any CAF officer who acts as an “accounting officer”, as that term is defined in QR&O article 1.02, Definitions, is reminded of their obligations in respect of public funds under QR&O Chapter 202, Cash Accounts and Banking Arrangements.

3. Consequences

Consequences of Non-Compliance

3.1 Non-compliance with this DAOD may have consequences for both the DND and the CAF as institutions, and for DND employees and CAF members as individuals. Suspected non-compliance may be investigated. The nature and severity of the consequences resulting from actual non-compliance will be commensurate with the circumstances of the non-compliance. Consequences of non-compliance may include one or more of the following:

1. the ordering of the completion of appropriate learning, training or professional development;
2. the entering of observations in individual performance evaluations;
3. increased reporting and performance monitoring;
4. the withdrawal of any authority provided under this DAOD to a DND employee or CAF member;
5. the reporting of suspected offences to responsible law enforcement agencies;
6. the liability of Her Majesty in right of Canada;
7. the application of specific consequences as set out in applicable laws, codes of conduct, and DND and CAF policies and directives; and
8. other administrative or disciplinary action, or both.

Note – In respect of the compliance of DND employees, see the TB Framework for the Management of Compliance for additional information.

4. Authorities

Authority Table

4.1 The following table identifies the authorities associated with this DAOD:

5. References

Acts, Regulations, Central Agency Policies and Policy DAOD

• Appropriation Acts
• Financial Administration Act
• Public Servants Disclosure Protection Act
• Surplus Crown Assets Act
• Defence Materiel Loan Regulations
• QR&O article 1.02, Definitions
• QR&O Chapter 202, Cash Accounts and Banking Arrangements
• Framework for the Management of Compliance, Treasury Board
• Policy on Financial Management, Treasury Board
• Directive on Charging and Special Financial Authorities, Treasury Board
• Directive on Public Money and Receivables, Treasury Board

Other References

• DAOD 1004-0, Parking
• DAOD 1004-1, Parking Administration
• FAM Chapter 1018-1, Managing Public Revenue
• FAM Chapter 1018-2, Accounting and Control of Accounts Receivable and Public Revenue
• A-FN-100-002/AG-006, Delegation of Authorities for Financial Administration for the Department of National Defence (DND) and the Canadian Armed Forces (CAF)
• B-GS-055-000/AG-001, Provision of Services