Imprest Fund Accounts KCTCS

Allowed only in general fund and internal service fund. Whenever a revolving fund is abolished or an individual’s appointment as custodian is terminated, the fund must be replenished to the authorized amount, reviewed and certified as being turned over to the treasurer or new custodian. The authorized balance should not exceed one month’s salary or the surety bond covering the custodian. The governing https://business-accounting.net/ body must authorize each revolving fund in the manner that local legislation is officially enacted, i.e., resolution or ordinance. This applies also to all subsequent increases or decreases in the imprest amount. Appropriation – The legal spending level authorized by a budget ordinance or resolution. Spending should not exceed this level without prior approval of the governing body.

The debits will go to the expense accounts indicated by the petty cash receipts, such as postage expense, supplies expense. In other words, the general ledger account Petty Cash is not involved in the replenishment. (Replenishment means getting the total of the currency and coins back to the imprest amount.) The petty cash custodian will cash the check and add the amount to the other cash. The imprest balance is the amount of cash stated in the general ledger for the petty cash account. Instead, when cash is issued to replenish a petty cash box, the debit is to the expenses for which cash was paid, while the credit is to the general cash account. Thus, the imprest balance states the initial cash distribution to a petty cash account, and does not subsequently change unless the total amount of cash allocated to the petty cash box changes. While the Imprest petty cash procedure used to be relatively widespread, the increased prominence of electronic transactions has led to a decline in usage of the Imprest system.

Policy 1505: Imprest Balance Accounts: Petty Cash

Treasury and Cash Management is responsible for approving any changes to Imprest Funds on Deposit and for maintaining records of each fund and its custodian. The fund is not to be used to pay individuals for worked performed or services rendered.

Due to the University’s goal to reduce cash on campus, no new petty cash accounts will be established beginning May 2019. Establishing an Imprest Checking Account. Guidance in this section applies to petty cash, imprest accounts, working funds, advance travel, stamp funds, change funds, or any other revolving funds set aside for facilitating minor disbursements, making change, and similar uses. When revolving funds are disbursed, they are restored to the authorized balance by a warrant drawn and charged to the applicable fund. The most well-known type of imprest is a petty cash account, which is used to cover smaller transactions when it’s impractical or inconvenient to cut checks.

Change of an Imprest Fund Balance

The Aug. 31 balances in agency imprest, petty cash and travel advance accounts are included in the State of Texas Annual Cash Report published the first Monday in November. Table 19 in the report displays the fiscal year-end balances for each agency. The balances are based on USAS activity processed under the comptroller objects listed below. Financial Services is responsible for approving the establishment of all petty cash funds.

• Thus, the imprest balance states the initial cash distribution to a petty cash account, and does not subsequently change unless the total amount of cash allocated to the petty cash box changes.
• The person approving the check for the petty cash custodian to cash should review the petty cash receipts and attach them to the check request.
• The original budget should also include actual appropriation amounts automatically carried over from prior years by law.
• Only full-time KCTCS employees are authorized to be imprest custodians.
• The amount of the fund should be limited to four weeks’ expenditures from such funds.
• Documenting your Imprest account with receipts helps you to monitor how much money is being spent on incidental expenses, while also keeping you protected from employee fraud.

Control over the petty cash occurs during the replenishment process. The person approving the check for the petty cash custodian to cash should review the petty cash receipts and attach them to the check request. Control can also occur when an independent person confirms that the petty cash custodian’s cash and receipts adds up to the imprest amount. Any time an expense is paid through the Imprest petty cash procedure, it needs to be documented with receipts. Your accounting team should monitor the account for any discrepancies between the actual cash and the expected cash in the account.

Fayetteville Policies and Procedures

Harold Averkamp has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. In this example the maximum amount of petty cash that can be issued is $100. The claimant may only spend what they have and is only replenished with what they spend, in this case $90. A cash allowance is an expense that is repaid immediately in cash, instead of being reimbursed at a later date.

Such ordinances or resolutions set an absolute maximum or ceiling on the expenditures, but the time period for incurring expenditures does not coincide with the government’s fiscal year; it may even cover several years. Your annual report requires seven digits for all account codes however, their display in the chart of accounts varies. The expenditure or expense accounts are presented in the export without object codes. Object codes are available in the BARS Manual. The reporting at the subobject level is not required. A petty cash imprest system allows only the replenishment of the spend made. So, if one starts the month with $100 in a petty cash float and spends $90 of it in that month, an amount of $90 will then be placed in the float to bring the balance back to $100.

BARS Reporting Requirements

Put simply, you’ll gain much more visibility into your petty cash balances as well as how that cash is being used. The Financial Affairs Compliance Office monitors the usage of each fund. The Financial Affairs Compliance Office may recall an imprest fund if any violation of this policy occurs. It is important to perform a count of the fund in the presence of the old and new custodians at the time of transfer. The count must be documented with a statement signed by the custodians .

• The custodian is personally responsible for maintaining and reconciling the fund.
• In instances where he fund’s custodian will be away for an extended period, an updated agreement must be submitted to appoint a new custodian.
• A department head or equivalent administrator must authorize the Request for Imprest Fund form and designate the custodian.
• The fund custodian must submit a signed reconciliation report to the Financial Affairs Compliance Office within fifteen days after the end of each month.
• Appropriated budgets are required by statute in cities (Chapter 35.32A RCW, Chapter 35.33 RCW and Chapter 35A.33 RCW), counties (Chapter 36.40 RCW), and most other local governments in Washington State.

Operating budget – Presents the estimated expenditures and available resources necessary to provide the services for which the government was created. Comprehensive budget – An government-wide budget that includes all resources the government expects and everything it intends to spend or encumber during a fiscal period.

Establishing an Imprest Fund

It is unreasonable to issue a check for such small expenses and for managing the same custodians are appointed by the company. Enter total reimbursement requested and accounting code information on a Check Request form. The establishment of strong internal controls for cash receipts or disbursement is necessary to prevent mishandling of funds and to safeguard against loss. Bank must be notified the account is being closed. Repayment will be deposited to the business unit’s local depository bank. The KCTCS Assistant Vice President of Treasury and Accounting may perform an audit of imprest fund activity at any time without notice.

Requests to establish imprest checking accounts must be approved by the responsible Department Head, the campus Chief Financial Officer , the USNH Controller, and the USNH Vice Chancellor. All USNH checking accounts must include the USNH Controller among the authorized bank signators. Monthly bank statements for all USNH bank accounts are received directly from the bank by the USNH Controller before the statements are forwarded to the responsible department. Imprest checking accounts require monthly reconciliation (and monthly replenishment, if un-replenished receipts exceed $300). All bank balances must be reconciled to the checkbook balance and to the authorized imprest balance on a monthly basis and submitted to the USNH Controller within 30 days of the bank statement date for review.

BARS Alerts

The amount of the fund should be limited to the total of two week’s expendituresbased on regular activity. The Schedule 09, Schedule of Liabilities, includes a new validation check for net imprest balance pension liabilities. Governments will receive a red flag if they have pension related liabilities but do not report them on the Schedule 09 or if they are using the incorrect ID No.

At the end of the period, the petty cash book is balanced and reconciled. Amount is cross checked with vouchers and amount for that is reimbursed to maintain the original imprest amount. At the end, the cashier submits the vouchers to the chief cashier along with vouchers. After reconciliation, cash spent on expenses is reimbursed and maintains the imprest cash fund to the initial fixed amount. Float is the term used for a granted amount. One of the main benefits of the Imprest system is the fact that it helps to deter unauthorised spending, as the money in the account is earmarked for a particular use. Because Imprest accounts pay out roughly the same amount of cash on a regular basis before they’re automatically replenished, it’s much easier to flag discrepancies and detect employee fraud.

Managing Imprest Funds

The responsible department must notify and submit the appropriate paperwork to the Office of the Vice President for Finance and Treasurer when there is a change requested to the petty cash fund. Only cities and special purpose districts with revenue usually less than $300,000 are required to prepare this schedule. However, conservation districts, fire districts, transportation benefit districts, local/regional trauma care councils and industrial development corporations are required to prepare the Schedule regardless of the amount of revenue. However, no financial activity reports do not require a formal Schedule 22 to be submitted. Governments who file a no activity report will be required to submit supporting documents to confirm no activity, such as meeting minutes, county reports and/or bank statements.

See the BARS Manual 3.8.2, Employee Travel for additional guidance specific to advanced travel revolving funds. Revolving funds are public funds and may never be used for personal cash advances, loans or expenditures. No receipts may be deposited to the fund other than approved replenishments and increases to the authorized balance as described above. Original budget – The first complete appropriated budget. The original budget may be adjusted by reserves, transfers, allocations, supplemental appropriations, and other legally authorized legislative and executive changes before the beginning of the fiscal year. The original budget should also include actual appropriation amounts automatically carried over from prior years by law. A checking account is a highly liquid transaction account held at a financial institution that allows deposits and withdrawals.