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Cash Disbursements

Under the Constitution Act the Crown can only spend public money by or under an Act of Parliament. The Public Finance Act reinforces this by stipulating that the Crown or an Office of Parliament must not spend public money, except as expressly authorised by or under an Act.

The Public Finance Act does, however, authorise public money to be disbursed for:

  • meeting expenses or capital expenditure incurred in accordance with an appropriation or other authority by or under an Act
  • the payment of goods and services tax in relation to those expenses or capital expenditure
  • the repayment of debt of the Crown or an Office of Parliament
  • the settlement of liabilities of the Crown or an Office of Parliament.

Departmental payments are paid out of departmental bank accounts, while Crown payments are paid out of Crown bank accounts.

Expectations for settling accounts with creditors include the following:

  • departments and Crown agencies should clearly communicate their standard terms, so suppliers know in advance where they stand on payment terms
  • departments and Crown agencies should (as a minimum) pay valid invoices in accordance with their posted terms and conditions no later than the 20th of the month following receipt
  • agencies and suppliers are encouraged to negotiate quicker payments whenever that suits both parties
  • any disputes should be identified and communicated within ten working days of receipt of an invoice
  • departments and Crown agencies should build and maintain sound relationships with their suppliers.
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