Imprest Fund Accounts | KCTCS

Administrative Procedures

Imprest Fund Accounts

Policy Number: 5.4.21-P

Current Effective Date: 08/01/2017

Original Effective Date: 07/01/2008

Revision Dates: 07/01/2008, 07/01/2013, 05/30/2017

Revision Number: 3

Revision Summary: Prior Business Procedure 4.24

Responsible Official: Director of Procurement to Payment

References:

1. Purpose

To outline the establishment and use of imprest fund accounts.

2. Scope

This procedure applies to all KCTCS employees.

3. General

3.1

Imprest fund disbursements are not to be made unless none of the following payment methods can be utilized (imprest should be the last available means to settle payment): 

  1. Procurement Card 
  2. PAY Voucher 
  3. Employee Reimbursement 
  4. Purchase Order Requisition

3.2

Imprest funds should be used on justifiable business versus a matter of convenience.

3.3

Imprest accounts must maintain a fixed balance and be reconciled monthly along with reimbursement requests.

3.4

The allowable maximum limit of a single imprest disbursement is $100 unless prior approval is obtained from the KCTCS System Director of Business Services. 

  1. Requests for exceptions must be in writing (email will suffice). 
  2. Written requests for exception must include:
    1. The bona fide business purpose of the expense.
    2. The circumstances that restrict the use of other available payment methods.
  3. Exception approvals must be attached to the supporting documentation for reimbursement.

3.5

Imprest funds cannot be commingled with other KCTCS funds or personal funds

4. Imprest Custodian Responsibility

4.1

An imprest custodian is the individual assigned to oversee the processing of the imprest account. 

  1. Custodian has exclusive access to the control of the imprest fund.
  2. Custodian is responsible for accounting for these funds and making provisions necessary to keep funds secure. 
  3. Custodian is responsible for the fund’s account reconciliations and providing proper supporting documentation for reimbursements. 
    1. Treasury Form TM11 must be used to prepare account reconciliations. 
    2. Account reconciliations must be completed at the end of each month. 
  4. Custodian is responsible to ensure disbursements follow allowable business procedures and practices. 
  5. Custodian must keep accurate records on file for audits.

4.2

Only full-time KCTCS employees are authorized to be imprest custodians.

4.3

The Custodian is authorized to make cash disbursements from the imprest fund. 

  1. Disbursements must be in compliance with established business procedures.
  2. Failure to comply may result in the forfeiture of an imprest account. 
  3. If misuse occurs, sanctions could be imposed per the KCTCS Human Resource Policy and the Commonwealth of Kentucky law.

4.4

Imprest Custodians, in conjunction with the department supervisor, are personally liable for the full amount of the imprest cash funds issued to them until the funds are fully repaid to the KCTCS Office of Treasury Services or until funds are transferred to another approved custodian. 

  1. Funds cannot be transferred without the advance written approval of the KCTCS System Office Assistant Treasurer.

5. Allowable Types of Imprest Funds

5.1

Imprest funds are established to enable KCTCS business units to achieve their assigned objectives.

5.2

The following types of imprest funds can be established:

  1. Cashier functions/change fund
    1. Imprest custodians may use change funds to exchange cash for different denominations through their local depository bank. 
    2. Payment for general operating expenses or cashing checks is not permitted using change funds.
  2. Small purchase expense fund 
    1. Imprest custodians must ensure disbursements are allowable within KCTCS business procedures and practices. 
    2. Amount of imprest fund should not exceed 30 working days of estimated expenses. 
      1. Funds may be decreased or withdrawn at the discretion of the KCTCS Office of Treasury Services if it is in the best interest of KCTCS.
    3. Imprest funds will not be authorized for greater than $500. 
    4. Reimbursement of imprest accounts must have supporting documentation and kept on file for auditing purposes.
    5. Imprest custodians are encouraged to maintain imprest funds in a local bank account at a KCTCS approved depository institution for protection and record keeping.

6. Establishing Imprest Funds

6.1

Imprest funds may be established on a continual basis or for a specified period of time depending on the requirements of the fund.

6.2

The following documents must be submitted to the KCTCS System Office Assistant Treasurer for review and approval: 

  1. A completed Request to Establish or Increase Imprest Cash Fund Treasury Form (TM10) 
  2. A completed BA8 Form payable to the custodian for the requested amount.
    1. The account number 12600 (Imprest) is to be used on the BA8 Form with the appropriate chartfield combination.
    2. Must be signed by the custodian’s department head.

6.3

The initiated request to establish or increase an imprest fund is understood to acknowledge that the designated custodian is informed and agrees to the responsibilities involved as the imprest custodian.

6.4

If a bank account for the imprest fund is needed, the custodian will be responsible to establish the account with a local KCTCS approved depository bank.

  1. Bank account must be in the custodian’s name and KCTCS. 
  2. Bank account must include the college business unit name. 
  3. KCTCS Office of Financial Services should be notified of all imprest accounts that use a local depository bank.

7. Imprest Fund Controls

7.1

Imprest fund controls are exercised by the Imprest Custodian.

  1. Funds must be counted and amount verified monthly. 
  2. Funds must be counted and amount verified when transferring from one custodian to another.
  3. Disbursements and reimbursements must be documented. 
    1. Receipts/invoices must be kept on file. 
    2. Supporting documentation must be included in reimbursement requests and must include the bona fide business purpose for each disbursement.
  4. A supervisor must review and verify all overages and shortages. 
    1. Overages are to be deposited with other cash receipts. 
    2. Shortages are to be documented as reconciling items in the imprest fund.
    3. Overages and shortages greater than $100 are to be reported to the KCTCS System Office Assistant Treasurer and KCTCS System Director of Business Services. 
  5. Access to imprest funds must be limited to the Imprest Custodian or his/her appointeddesignee. 
    1. Cash must be secured in a locked location with limited access by key or combination.

8. Replenishing Imprest Cash Funds

8.1

To replenish imprest funds, a BA8 Form must be submitted made payable to the imprest custodian.

  1. BA8 Form must be submitted as a PAY voucher.
  2. BA8 Form must have supporting documentation for each disbursement transaction 
    1. Copy of original receipt/paid invoice.
    2. Copy of signed imprest check. 
    3. BA50 Form if funds were used for refreshments, meals, or accommodations. 
    4. Email approval (prior to the purchase) of the KCTCS System Director of Business Services if the single disbursement was over $100.

8.2

Frequency of reimbursement:

  1. Reimbursement varies with the size and frequency of activity of the imprest fund. 
  2. Reimbursement must occur no less than one time a month, but not more than one time a week.

8.3

The KCTCS System Office Assistant Treasurer may perform an audit of imprest fund activity at any time without notice. 

  1. Failure of the audit to demonstrate effective fund management could result in partial or total withdrawal of the imprest fund. 
  2. Risk assessment audits may be conducted by the KCTCS System Office Assistant Treasurer, KCTCS System Director for Business Services, KCTCS Office of Audit Services, college business unit, or System Office designee as deemed appropriate.

9. Changing Imprest Fund Custodianship

9.1

Process for changing imprest fund custodians

  1. Complete a reconciliation of the fund.
  2. Complete a TM12 Form and forward to theKCTCS System Office Assistant Treasurer.
    1. A copy of the fund reconciliation must accompany the request for transfer. 
    2. Custodian is not relieved of responsibility or accountability until the request for transfer has been approved, processed, and the business unit has been notified.

9.2

A change in custodianship will not be granted to transfer funds to subordinates within the same department. 

  1. Authorized use may be granted to subordinates within the same department for operations.
  2. The fund custodian remains responsible for the safekeeping of the funds.

10. Terminating Imprest Cash Funds

10.1

Justification for terminating imprest cash funds:

  1. The original authorization period expires. 
  2. The need for the fund no longer exists. 
  3. Fund custodian ceases employment with KCTCS. 
  4. Authorization is withdrawn by the KCTCS Office of Treasury Services.

10.2

Process for imprest cash fund termination:

  1. Reimbursement for outstanding expenditures must be secured. 
  2. Cash must be remitted to the KCTCS Office of Treasury Services.

10.3

Process for imprest bank fund termination: 

  1. Reimbursement for outstanding expenditures must be secured. 
  2. Bank must be notified the account is being closed. 
    1. Repayment will be deposited to the business unit’s local depository bank. 
    2. Repayment will be charged to account 12600 using the same chartfield combination used when the fund was established. 
  3. Send the following documents to theKCTCS System Office Assistant Treasurer to close the imprest account:
    1. A copy of the bank deposit. 
    2. A copy of any supporting documentation for account closure.
    3. A copy of the accounting entry. 
    4. A memo from the custodian to close the imprest account.

11. Reconciling Imprest Cash Funds

11.1

Imprest cash funds must be reconciled monthly.

  1. The TM11 Form must be completed. 
  2. Bank account must be reconciled (if applicable). 
  3. Bank statements and reconciliations must be kept on file.

11.2

The KCTCS System Office Assistant Treasurer will maintain a list of all fund custodians and their respective funds. 

  1. List will be reconciled to the KCTCS General Ledger monthly.
  2. Reconciliation will be available upon request. 
  3. Questions regarding fund reconciliation should be directed to KCTCS Office of Financial Services.