Payment Authority

Payment authority is the authority under section 33 of Canada's Financial Administration Act (FAA) to requisition payments. A government official who holds it decides whether a payment can go forward. The decision rests on whether the payment is a lawful charge against an appropriation, stays within available appropriations, protects funds needed for existing commitments, and is supported by an accurate invoice.

The term comes from the Government of Canada's expenditure-management framework, where it is one of the two components of financial authority. The other is certification authority under FAA section 34. Payment authority is also distinct from transaction authority, which is the legal authority to enter into contracts. The rules are set out in the Treasury Board guidance on payment authority.

Where payment authority sits among federal financial authorities

Three authorities work in sequence on a federal purchase. Transaction authority allows a department to enter into a contract. Certification authority under section 34 confirms that the goods or services were received and that the price and terms are correct. Payment authority under section 33 then allows the payment to be requisitioned.

Payment authority is exercised only after the required account verification and certification under section 34 have taken place. That verification must leave auditable evidence. A delegated position cannot exercise payment authority on the strength of an assumption that verification occurred.

What the official must confirm before requisitioning payment

The person exercising payment authority must not requisition a payment in any of these situations:

• The payment is not a lawful charge against an appropriation.
• The payment would exceed the appropriation.
• The payment would reduce the balance needed to meet existing commitments.
• The invoice is inaccurate.

A position delegated payment authority must also confirm that section 34 account verification has occurred. It must check that key payment information, such as value, date and financial coding, is correct. For low- and medium-risk transactions, the federal guide permits a limited review before payment authority is exercised, to ensure that the required information is available.

How a payment moves through federal processing

Payment authority applies to payments arising from operational and capital procurement, whether the buy was made through a purchase order or another contract. The Library and Archives Canada financial management guidance describes the steps in federal payment processing:

• The department receives the payment request.
• Quality assurance is performed.
• Section 33 certification is exercised.
• The payment requisition is submitted to the Receiver General of Canada, which issues the payment.

Departmental payment requisitions may be submitted to Public Services and Procurement Canada (PSPC) after section 33 certification and the related quality-assurance and section 34 verification activities. The procure-to-payment process ends when the Receiver General of Canada issues payment.

Departments keep records that show payment authority was properly exercised. These include delegation instruments or proof of authorization, section 34 verification and certification, approved payment requisitions, and section 33 certification records.

What payment authority means for a supplier

The decision to exercise payment authority belongs to the authorized government official, not to the supplier. A supplier's part is practical. Deliver the goods or services the contract requires, provide the supporting documentation the contract calls for, and submit an accurate invoice.

Accuracy matters because the federal guidance states that payment authority must not be exercised when the invoice is inaccurate. An invoice with errors in value, date or other payment details can stop the requisition until it is corrected. Bid teams should build invoicing checks into contract delivery so that each invoice matches the contract and the work delivered.