**Imprest Fund**

**Effective Fiscal 2019**

**IMPREST FUND**

**EFFECTIVE FISCAL YEAR 2019**

**PREPARED BY:**

**GENERAL LEDGER AND ADVISORY BRANCH**

**FISCAL ACCOUNTING OPERATIONS**

**BUREAU OF THE FISCAL SERVICE**

**U.S. DEPARTMENT OF THE TREASURY**

# Version History

**Background**

The Department of the Treasury issued a Policy Directive (effective October 1, 2001) to save the government payment processing costs and to increase operational efficiency by eliminating agency imprest funds, with the exception of waived payments.  Electronic Funds Transfer (EFT) transactions deliver Federal agencies significant advantages: They are less labor intensive, more effective for earning interest on behalf of the government, and provide stronger internal controls and audit trails. However, Treasury determined that many agencies continue to require imprest funds in order to complete their unique missions because of the varying nature of their payment processing. Any fixed-cash or petty-cash fund that has been advanced as Funds Held Outside of Treasury (FHOT) is considered an imprest fund.

Imprest funds may be used when a payment by EFT is waived in accordance with the provisions of Title 31 U.S.C. § 208, *“Management of Federal Agency Disbursements”*, **AND** meets one other of the following exceptions: 

**(a)** Payments involve national security interests, military operations or national disasters;

**(b)** Payments are made in furtherance of law enforcement actions;

**(c)** The payment amount owed is less than $25;

**(d)** The political, or financial infrastructure of a foreign country does not support payment by a noncash mechanism; or

**(e)** Emergencies, or mission-critical circumstances, that are of such an unusual and compelling urgency that the government would otherwise be seriously injured if payment were not made by cash.

Before establishing an imprest fund, an agency should review the numerous other payment options available to agencies to determine if an alternative approach would be more suitable.  Please refer to 1 TFM Part 4a, Chapter 3000, Section 30170, “*Authority to Disburse Imprest Funds*” for more information.

Waivers from the Imprest Fund Policy Directive are determined by the agency making the payment. However, in order to invoke an imprest fund waiver, the agency must also invoke a waiver from the Treasury EFT Rule. The policy directive reflects the National Performance Review report that most Federal payments could be made electronically or by other noncash alternatives. It also reflects the Debt Collection Improvement Act of 1996, which requires the use of electronic funds transfers for most Federal payments.  

GAO’s "Principles of Federal Appropriations Law" Volume 2, Chapter 9, “Appropriated Funds - Imprest Funds” states: 

*"Since the Imprest Fund advance does not qualify as an obligation under 31 USC § 1501, the charge must be in the form of a "commitment or reservation.””*

Generally, the obligation is recorded when the advance is used and the cashier seeks replenishment for expenses. The preliminary charge is necessary to protect against violating the Antideficiency Act. In order to comply with the GAO requirement, USSGL 470000,  “Commitments Programs Subject to Apportionment” should be used for imprest funds, instead of  USSGL accounts 480100, “Undelivered Orders - Obligations, Unpaid” or 480200, “Undelivered Orders - Obligations, Prepaid/Advanced”.

Federal agencies are required to report their imprest funds in USSGL account 112000, “Imprest Funds” on their annual financial statements.

The following scenario provides Imprest Fund posting guidance for USSGL proprietary and budgetary accounts.  It assumes the agency is working from an**annual-year Treasury Account Symbol**and is funded by a direct appropriation.  The scenario will display the Imprest Fund Control for informational purposes only; the Imprest Fund Control is not supported by the USSGL.

**Listing of USSGL Accounts Used in This Scenario**

*A beginning Trial Balance is not used in this scenario.*

**Illustrative Transactions**

**The following transactions represent the establishment, replenishment, increase, decrease, restoring (due to loss, shortage, or theft,) and liquidation (end of year) activities of Imprest Funds. Also shown is the actual impact of these transactions to the Imprest fund activity, trial balances, and financial statements.**

**Preclosing Trial Balance**

**Closing Entries**

**Postclosing Trial Balance**

**Financial Statements**

**Reclassified Financial Statements**

**Year 2 – Illustrative Entries at the Beginning of the Next Fiscal Year**

�For all FHOT entries, please also refer to GTAS Edit Rule #5, “Funds Held Outside of Treasury Business Line Balances” within the USSGL Treasury Financial Manual Supplement, Section VII: GTAS Validation and Edits.  (� HYPERLINK "https://tfm.fiscal.treasury.gov/v1/supplements/ussgl/ussgl_part_2.html#Part7" �https://tfm.fiscal.treasury.gov/v1/supplements/ussgl/ussgl_part_2.html#Part7�) Agencies must verify that the balances of USSGL 112000 and other cash accounts equal the balance for Funds Held Outside of Treasury (FHOT) from the Central Accounting and Reporting System (CARS).

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