Imprest funds are fixed- or petty-cash
funds in the form of currency or coin that have been advanced as Funds
Held Outside of Treasury. Historically, agencies have used imprest funds
to make a variety of payments to all classes of payment recipients. Agencies
typically used imprest funds to reimburse employees for expenses, to make
small purchases, to make emergency beneficiary payments, and to pay informants,
among other uses.
The National Performance
Review Report, Report on the Elimination of Imprest Funds in
the federal government Through the Use of Electronic Commerce (NPR
Report), issued January 1996, recommended that agency imprest funds be
eliminated because most federal payments could be made electronically
and by other noncash alternatives. On April 26, 1996, the President signed
into law the Debt Collection
Improvement Act of 1996 (DCIA). This legislation requires the use
of electronic funds transfer for most federal payments, with the exception
of tax refunds, starting January 2, 1999. On September 25, 1998, Treasury
published a final rule (EFT rule)
implementing the requirements of the DCIA. The EFT rule established the
circumstances under which waivers from EFT are available and set forth
the responsibilities of federal agencies and payment recipients under
the regulation, among other requirements.
Treasury's policy on the use
of imprest funds has been updated to reflect the recommendations of the
NPR Report and the requirements of the DCIA--implemented by the EFT rule--for
federal payments. In addition, Treasury is requiring agencies to eliminate
imprest funds because they are labor intensive and require relatively
more internal controls than noncash payment mechanisms, and because the
government does not earn interest on money held in these accounts.
Waivers
Waivers from the imprest fund
policy are available to agencies in limited circumstances. A waiver is
conditioned on the payment being waived under 31 CFR 208, and
on satisfying one of the specific imprest fund waivers. The agency making
the payment is solely responsible for determining if the waiver criteria
are met. There is no requirement that agencies consult Treasury prior
to granting a waiver, unless a federal agency requires clarification or
interpretation of policy.
Imprest funds may be used when:
(a) A payment by EFT is
waived in accordance with the provisions of 31 CFR 208, Management of
Federal Agency Disbursements, at ยง208.4 Waivers; and
one of the following exceptions
applies:
(b) Payments involve national
security interests, military operations, or national disasters;
(c) Payments are made in furtherance of a law enforcement action;
(d) The amount owed is less than $25;
(e) The political, financial, or communications infrastructure of
a foreign country does not support payment by a noncash mechanism;
or
(f) Payments are made in emergencies, or in mission-critical circumstances,
that are of such an unusual and compelling urgency that the government
would otherwise be seriously injured, unless payment is made by cash.
Agencies using imprest funds
for waived payments should continue seeking electronic or other noncash,
cost-effective means to make payments. In addition, federal agencies are
required to report their imprest funds in General Ledger Account 1120
- Imprest Funds on their annual financial statements.
Effect on Existing Guidance
The Imprest Fund Policy affects
two FMS operating manuals, the Treasury Financial Manual (TFM), Volume
I, at the former Part 4, Section 3000, Imprest Fund Cash Held at Personal
Risk by Disbursing Officers, and the Manual of Procedures and Instructions
for Cashiers (Cashier's Manual). The relevant policy sections of that former
TFM part and the Cashier's Manual have been replaced by this Policy Directive.
The operational guidance contained in the TFM will be merged into the
Cashier's Manual. A new TFM Volume
I, Part 4, Section 3000, Third-Party Draft Procedures for Imprest
Fund Disbursing Activities has been issued covering Third Party Drafts.
   Last Updated:  Thursday December 06, 2007