1.32.8  Investigative Imprest Funds

1.32.8.1  (01-14-2011)
Overview

  1. This IRM provides policies and procedures for establishing and managing investigative imprest funds.

  2. The Chief Financial Officer, Internal Financial Management Unit, Office of Financial Management Policy, develops and maintains this IRM.

1.32.8.2  (01-14-2011)
Background

  1. Criminal Investigation serves as the law enforcement arm of the Internal Revenue Service (IRS), and performs various undercover operations in support of its mission. Criminal Investigation establishes investigative imprest funds to provide special agents with funding for ongoing covert operations. Investigative imprest funds are used by CI for all confidential and some non-confidential expenditures.

1.32.8.3  (01-14-2011)
Authority

  1. 26 USC section 7608(c), Rules Relating to Undercover Operations.

  2. Department of the Treasury, Financial Management Service (FMS), Policy Directive: Imprest Fund Policy Statement, November 9, 1999.

  3. Department of the Treasury, FMS, Manual of Procedures and Instructions for Cashiers (Cashier's Manual), April 2001.

  4. Department of the Treasury, FMS, Volume I, Treasury Financial Manual, Part 4, Chapter 3000, Third-Party Draft Procedures for Imprest Fund Disbursing Agencies.

  5. Department of the Treasury, FMS, Volume I, Treasury Financial Manual, Part 4, Chapter 8000, Designated Depository Checking Accounts.

  6. Department of the Treasury, FMS, Volume I, Treasury Financial Manual, Part 6, Chapter 8000, Cash Management.

  7. Department of the Treasury Directive 32-04, Settlement of Accounts and Relief of Accountable Officers.

  8. Delegation Order 9-10, Authorization to Approve Confidential Expenditures, in IRM 1.2.48, Delegations of Authority for Criminal Investigation Activities.

  9. Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers, in IRM 1.2.40, Delegations of Authority for Organization, Finance and Management Activities.

1.32.8.4  (01-14-2011)
Related Resources

  1. Department of the Treasury Directive 32-01, Accounting Principles and Standards.

  2. IRM 1.15.30, Records Management, Records Control Schedule for Criminal Investigation.

  3. IRM 9.11.1, Fiscal and Budgetary Matters.

  4. IRM 10.2.8, Emergency Planning and Incident Reporting.

  5. IRM 10.4.1, Managers Security Handbook.

1.32.8.5  (01-14-2011)
Definitions

  1. In this IRM, the terms below have the following meanings:

    1. Cashier - the Criminal Investigation employee who is responsible for issuing and reconciling requested funds from an investigative imprest fund.

    2. Certifying Officer - an individual who is personally accountable and responsible for the accuracy and legality of payments made from Federal Government funds.

    3. Checking Account Signature Cards - cards signed by the cashier when opening a checking account at a financial institution.

    4. Criminal Investigation (CI) Imprest Fund Computer Program - a computer software program used by cashiers to input and track investigative imprest fund transactions.

    5. Churning - the act of using income from an undercover operation to offset the necessary and reasonable expenses pursuant to undercover operations.

    6. Imprest Fund - cash advanced to a duly authorized cashier which is charged against a Government appropriation account.

    7. Internal Orders - data elements in the Integrated Financial System (IFS) identifying project costs at the lowest level of budget detail issued by Corporate Budget.

    8. Investigative Expenditures - confidential and non-confidential expenses incurred by special agents in connection with an undercover program. For additional information on confidential and non-confidential expenditures see IRM 9.11.1, Fiscal and Budgetary Matters, and Delegation Order 9-10, Authorization to Approve Confidential Expenditures, in IRM 1.2.48, Delegations of Authority for Criminal Investigation Activities.

1.32.8.6  (01-14-2011)
Responsibilities

  1. This section provides responsibilities for:

    1. Chief Financial Officer.

    2. Associate Chief Financial Officer for Corporate Budget.

    3. Associate Chief Financial Officer for Internal Financial Management.

    4. Director, Office of Financial Management Policy.

    5. Director, Beckley Finance Center.

    6. Chief, Criminal Investigation.

    7. Director of Field Operations.

    8. Director, Special Investigative Techniques.

    9. Director, Finance, Criminal Investigation.

    10. Special Agents in Charge.

    11. Special Agents.

    12. Cashiers.

    13. Alternate Cashiers.

1.32.8.6.1  (01-14-2011)
Chief Financial Officer

  1. The Chief Financial Officer is responsible for:

    1. Establishing financial policy for the investigative imprest funds.

    2. Granting requests for relief in accordance with Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers.

1.32.8.6.2  (01-14-2011)
Associate Chief Financial Officer for Corporate Budget

  1. The Associate Chief Financial Officer for Corporate Budget is responsible for approving and issuing the internal orders that identify CI project costs.

1.32.8.6.3  (01-14-2011)
Associate Chief Financial Officer for Internal Financial Management

  1. The Associate Chief Financial Officer for Internal Financial Management is responsible for establishing, maintaining, and ensuring compliance with accounting policy and procedures for internal accounting operations and financial reporting.

1.32.8.6.4  (01-14-2011)
Director, Office of Financial Management Policy

  1. The Director, Office of Financial Management Policy is responsible for:

    1. Developing and issuing policy for investigative imprest funds.

    2. Granting relief to cashiers in certain situations in accordance with Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers.

1.32.8.6.5  (01-14-2011)
Director, Beckley Finance Center

  1. The Director, Beckley Finance Center (BFC) is responsible for:

    1. Granting permission to establish investigative imprest funds.

    2. Authorizing amounts to open investigative imprest funds.

    3. Receiving notification memoranda when a Special Agent in Charge changes.

    4. Authorizing all requests for permission to exceed the maximum authorized amount of an investigative imprest fund for a temporary period in an emergency situation.

    5. Authorizing establishment of a new checking account.

    6. Authorizing closure or transfer to a different financial institution of an existing checking account.

    7. Reconciling the investigative imprest funds to the General Ledger every month.

1.32.8.6.6  (01-14-2011)
Chief, Criminal Investigation

  1. The Chief, Criminal Investigation is responsible for oversight of the investigative imprest fund program.

1.32.8.6.7  (01-14-2011)
Director of Field Operations

  1. The Director of Field Operations is responsible for oversight of investigative imprest fund expenditures in the field offices.

1.32.8.6.8  (01-14-2011)
Director, Special Investigative Techniques

  1. It is the responsibility of the Director, Special Investigative Techniques, through a vigorous program of evaluation and follow-up, to ensure that funds are used appropriately and in a manner that is both lawful and consistent with the administration and enforcement of the laws enforceable by CI.

1.32.8.6.9  (01-14-2011)
Director, Finance, Criminal Investigation

  1. The Director, Finance, CI is responsible for committing and obligating funds for the investigative imprest fund program.

1.32.8.6.10  (01-14-2011)
Special Agents in Charge

  1. Special Agents in Charge are responsible for:

    1. Ensuring compliance with IRS policy and guidelines.

    2. Determining the location for investigative imprest funds and providing for the personal safety of the cashiers.

    3. Maintaining the records used to designate cashiers and alternate cashiers.

    4. Supervising investigative imprest funds, including designating, assisting, training, and directing cashiers in the performance of their duties.

    5. Providing supervision and control over the operations of cashiers.

    6. Approving authorizations, advances, reimbursement vouchers, and accountability reports.

    7. Monitoring and controlling all expenditures reimbursed from investigative imprest funds.

    8. Ensuring money is expended in a manner that is both lawful and consistent with the administration and enforcement of the Internal Revenue laws.

    9. Providing safeguards over the investigative imprest funds and related records.

    10. Maintaining adequate internal controls over investigative imprest funds, and taking appropriate action to ensure the internal controls are carried out as prescribed.

    11. Ensuring cashiers have access to the CI Imprest Fund Computer Program.

    12. Maintaining investigative imprest funds at levels that are commensurate with demonstrated needs.

    13. Ensuring audits are performed as required.

    14. Maintaining audit reports for six years, three months.

    15. Taking corrective action for matters discovered during any audit or review, or by any other means.

    16. Taking appropriate action in case of loss, or possible loss, of all or a portion of an investigative imprest fund.

    17. Notifying BFC for increases or decreases to an investigative imprest fund.

1.32.8.6.11  (01-14-2011)
Special Agents

  1. Special Agents are responsible for:

    1. Complying with IRS policy and guidelines.

    2. Completing requests for advances, reimbursement vouchers, accountability reports, and other necessary documentation, following established procedures.

    3. Ensuring money is spent in a manner that is both lawful and consistent with the administration and enforcement of the Internal Revenue laws.

    4. Safeguarding all funds and related records.

1.32.8.6.12  (01-14-2011)
Cashiers

  1. Cashiers are responsible for:

    1. Having a thorough knowledge of the policy and regulations for use of investigative imprest funds.

    2. Disbursing funds that have been properly authorized for disbursement.

    3. Maintaining detailed records and documentation of all transactions in the CI Imprest Fund Computer Program using established procedures.

    4. Maintaining copies of all official forms related to the establishment of an investigative imprest fund, and any changes related to it.

    5. Maintaining financial institution records and source documents for all checking account transactions.

    6. Maintaining all records by fiscal year, and retaining them on-site so they are available for review and audit.

    7. Ensuring each investigative imprest fund is safeguarded and controlled at all times.

    8. Recognizing they must not make any payment that is questionable in nature.

    9. Accepting personal accountability and responsibility for custody of an investigative imprest fund and payments from it.

    10. Transferring the accountability for an investigative imprest fund to the alternate cashier, before a planned absence, following established procedures.

    11. Reconciling an investigative imprest fund monthly and preparing all required forms.

    12. Being responsible for all shortages. If directed, cashiers must restore any losses for which they are liable.

    13. Completing the Imprest Fund Training Tutorial.

    14. Understanding that they cannot handle cash.

1.32.8.6.13  (01-14-2011)
Alternate Cashiers

  1. Alternate cashiers are responsible for:

    1. Serving as acting cashiers in the absence of the principal cashier.

    2. Performing cashier duties, as detailed in IRM 1.32.8.6.12, after accepting the transfer of accountability for an investigative imprest fund.

    3. Accepting the transfer of accountability for an investigative imprest fund, before a planned absence of the principal cashier, and returning the accountability when the principal cashier returns.

1.32.8.7  (01-14-2011)
Optional Form (OF) 211, Request for Change or Establishment of Imprest Fund

  1. OF 211, Request for Change or Establishment of Imprest Fund, is used whenever there is a need to:

    1. Authorize a new investigative imprest fund.

    2. Establish a new checking account.

    3. Designate a principal or alternate cashier.

    4. Revoke the designation of a principal or alternate cashier.

    5. Change from principal cashier to alternate cashier or vice versa.

    6. Change the Special Agent in Charge.

    7. Change a cashier's responsibilities.

    8. Change a cashier's name or location.

    9. Increase or decrease the amount of the investigative imprest fund.

    10. Close or transfer an existing checking account to a different financial institution.

    11. Close an investigative imprest fund.

  2. The Special Agent in Charge sends a memorandum giving notice of an impending action (for example, designation, revocation) to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  3. BFC prepares the OF 211, and the Director, BFC signs it.

  4. BFC sends the original signed OF 211 to the Special Agent in Charge.

1.32.8.8  (01-14-2011)
Establishing an Investigative Imprest Fund

  1. Criminal Investigation establishes an investigative imprest fund when there is no other satisfactory means of providing funds essential for the enforcement of laws and regulations.

  2. Criminal Investigation maintains investigative imprest funds in checking accounts at federally insured banks or credit unions under the account name "CI Imprest Fund."

  3. Before requesting the designation of a cashier, the Special Agent in Charge determines:

    1. The fund level of the investigative imprest fund.

    2. The security necessary to provide for the personal safety of the cashier.

    3. The security of the investigative imprest fund.

  4. Each investigative imprest fund must have one alternate cashier.

1.32.8.8.1  (01-14-2011)
Funding an Investigative Imprest Fund

  1. For new investigative imprest funds (for example, when a new field office is created), the Director, Finance, CI, enters a commitment for the value of the fund through the Web Request Tracking System (webRTS). The Special Agent in Charge sends a memorandum requesting funds to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  2. For established investigative imprest funds, the Director, Finance, CI, enters a commitment for the cumulative value of all funds through webRTS at the beginning of each fiscal year.

  3. Each cashier sends a funding request to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  4. After the Director, BFC approves the request, BFC transmits the funds via Electronic Funds Transfer (EFT) to the checking account.

1.32.8.8.2  (01-14-2011)
Increases and/or Decreases to an Investigative Imprest Fund

  1. Criminal Investigation notifies BFC whenever it wishes to increase or decrease the amount of an investigative imprest fund. The Special Agent in Charge prepares a memorandum for submission to the Director, BFC with a copy to the Director, Finance, CI, who completes an amendment to the webRTS requisition.

  2. BFC processes requests for increases or decreases to an investigative imprest fund when the amendment reaches completed status in webRTS.

1.32.8.9  (01-14-2011)
Designation of Cashiers

  1. The Special Agent in Charge notifies the Director, BFC by memorandum when designation of a principal or alternate cashier is needed.

  2. The person designated as cashier must not be a certifying officer.

  3. A principal or alternate cashier must be an employee whose duties do not require making investigative expenditures or granting approval for investigative expenditures. For example, the Special Agent in Charge who approves reimbursements from an investigative imprest fund cannot be designated as cashier for an investigative imprest fund.

  4. Designation and revocation must occur concurrently to avoid having two principal cashiers accountable simultaneously for the same investigative imprest fund.

  5. Cashiers responsible for investigative imprest funds may not have sub-cashiers.

1.32.8.9.1  (01-14-2011)
Termination of Cashier's Designation

  1. The designation of a cashier remains in effect until the date specified on the OF 211. When a cashier leaves the IRS or otherwise ceases to perform duties as a cashier, the Special Agent in Charge promptly notifies the Director, BFC, preferably in advance, by memorandum.

  2. The effective date the investigative imprest fund is closed or formally transferred to a new cashier must correspond with the revocation date on the OF 211 for the outgoing cashier. See IRM 1.32.8.12, Planned Cashier Absences and Transfer of Accountability, for information.

1.32.8.9.2  (01-14-2011)
Changes in Cashiers

  1. Cashier changes must be anticipated to allow for timely action so the continuity of the investigative imprest fund is maintained. These changes include:

    1. Designation of a new cashier.

    2. Revocation of a cashier's designation.

    3. Transfer of accountability.

  2. An audit of the investigative imprest fund must be performed before any of the activities listed above occur. See IRM 1.32.8.18, Unannounced Audits, for the audit process.

1.32.8.10  (01-14-2011)
Managing Checking Accounts

  1. All investigative imprest funds are maintained in checking accounts at local financial institutions under the account name "CI Imprest Fund." The account is not in the name of a cashier.

  2. The financial institution where the checking account is maintained must be a federally insured bank or a credit union.

  3. All checking accounts are identified by the IRS Employer Identification Number.

  4. Monthly, the cashier must remit all earned interest to BFC for deposit to the General Fund. The cashier sends a check for the amount of the interest, payable to the "Internal Revenue Service," with a memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Deposit Room
    110 N. Heber Street
    Beckley, WV 25802-9002

  5. At the end of the calendar year, the financial institution sends the cashier Form 1099-INT, Interest Income, for the amount of the interest earned during the year. The cashier forwards the Form 1099-INT with a transmittal memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  6. The cashier makes payments to the financial institution for:

    1. Fees incurred.

    2. Checking account maintenance charges.

  7. Service charges assessed by the financial institution cannot be netted against or deducted from earned interest. The cashier requests reimbursement for these expenses from BFC when the monthly accountability report is submitted.

  8. Each cashier inputs all investigative imprest fund transactions into the CI Imprest Fund Computer Program. Entries in the database include information associated with records of funds advanced, expenditures, checking account transactions, and changes to investigative imprest funds.

  9. There are no subsidiary investigative imprest funds.

1.32.8.10.1  (01-14-2011)
Establishing or Transferring Checking Accounts

  1. The Special Agent in Charge sends a memorandum requesting the establishment of a new checking account for an investigative imprest fund, or the transfer of an established checking account to a different financial institution to the Director, BFC at:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  2. The memorandum must include:

    1. Two sets of signature cards (both cards must have original signatures).

    2. A completed Certification to Resolutions Governing Bank Account for Unincorporated Association.

    3. Standard Form 3881, ACH Vendor/Miscellaneous Payment Enrollment Form.

      Note:

      The signature cards, Certification to Resolutions Governing Bank Account for Unincorporated Association, and Standard Form 3881 are obtained from the financial institution.

  3. The Director, BFC signs the signature cards.

  4. BFC sends the original signed signature cards, the original Certification to Resolutions Governing Bank Account for Unincorporated Association, and the original Standard Form 3881 to the Special Agent in Charge.

  5. The cashier establishes the checking account at a federally insured bank or credit union under the account name "CI Imprest Fund."

  6. The financial institution's records must reflect, at all times, current signatures that are valid for making withdrawals from the checking account. The financial institution is notified promptly whenever there is a change in cashiers or a checking account is being closed.

1.32.8.10.2  (01-14-2011)
Checking Account Signature Cards

  1. Checking account signature cards are signed by the cashier who opens the checking account. Banks and credit unions keep signature cards on file, and use them to identify the cashier, when the cashier returns to the bank or credit union to perform checking account transactions.

  2. The following individuals must sign the signature cards:

    1. Principal cashier.

    2. Alternate cashier.

    3. Special Agent in Charge.

    4. Director, Beckley Finance Center.

  3. The signature cards must always be current, and new signature cards must be prepared when there is a change in personnel in the positions listed in IRM 1.32.8.10.2(2).

  4. When there is a change in the personnel, the Special Agent in Charge sends a memorandum with two sets of signature cards (with original signatures), to the Director, BFC at:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  5. The Director, BFC signs the signature cards.

  6. BFC sends the original signed signature cards to the Special Agent in Charge.

1.32.8.10.3  (01-14-2011)
Change in Financial Institution or Financial Institution Information

  1. Sometimes it is necessary to change the financial institution where the investigative imprest fund is located, or the information about the financial institution changes. For example, the financial institution name changes due to a merger. When this occurs, the Special Agent in Charge notifies BFC using the procedures in IRM 1.32.8.10.1, Establishing or Transferring Checking Accounts.

1.32.8.11  (01-14-2011)
Closing an Investigative Imprest Fund

  1. When an investigative imprest fund needs to be closed, (for example, two field offices merge), the Special Agent in Charge must notify, in advance by memorandum, the Director, BFC.

  2. The investigative imprest fund may be completely liquidated by sending a check to BFC. The cashier sends a check payable to the "Internal Revenue Service" with a transmittal memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Deposit Room
    110 N. Heber Street
    Beckley, WV 25802-9002

  3. Prior to closure, an audit or financial review of the investigative imprest fund must be conducted. See IRM 1.32.8.18.1, Audit Process, for additional information.

  4. The Special Agent in Charge must resolve all investigative imprest fund losses before the investigative imprest fund is closed. See IRM 1.32.8.20, Investigative Imprest Fund Losses, for additional information.

  5. The Director, BFC signs OF 211, Request for Change or Establishment of Imprest Fund, to revoke a cashier's designation, in conjunction with closing the fund.

1.32.8.12  (01-14-2011)
Planned Cashier Absences and Transfer of Accountability

  1. A cashier's responsibility and accountability for an investigative imprest fund must be formally transferred in the following circumstances:

    1. The principal cashier anticipates being absent or assigned to other duties for more than 15 consecutive workdays. Responsibility and accountability are transferred from the principal cashier to the alternate cashier or another designated principal cashier.

    2. When the principal cashier resumes investigative imprest fund duties after a period during which the alternate cashier was accountable. Responsibility and accountability are transferred from the alternate cashier to the principal cashier.

    3. When a principal cashier's designation is being revoked. Responsibility and accountability are transferred from the former principal cashier to the alternate cashier or to a newly designated principal cashier.

  2. The transfer must include the financial institution records, checks, and other financial data for the investigative imprest fund. This is necessary to permit uninterrupted disbursing services during the absence.

  3. The Special Agent in Charge must notify the Director, BFC, by memorandum, in advance of the transfer, to request the designation of the new cashier.

  4. The outgoing principal cashier must prepare all forms necessary for the transfer of accountability using the CI Imprest Fund Computer Program and the incoming new principal or alternate cashier must acknowledge receipt of the fund and the transfer.

  5. The outgoing principal cashier must balance the fund in the presence of the incoming new principal or alternate cashier and two employees who are not associated with the operation of the investigative imprest fund.

  6. An independent audit must be performed before the fund is transferred to the new principal or alternate cashier. This audit may not substitute for a quarterly unannounced audit. See IRM 1.32.8.18.1, Audit Process, for additional information.

1.32.8.13  (01-14-2011)
Unplanned Cashier Absence

  1. Transfer of accountability is not required if the principal cashier's unplanned absence is less than 15 consecutive workdays. The alternate cashier automatically accepts the accountability if the fund has previously been transferred to the alternate. The principal and alternate cashiers must prepare and sign a receipt for this informal transfer.

  2. If the alternate cashier has not previously received a transfer of accountability, the principal cashier formally transfers the accountability. See IRM 1.32.8.12, Planned Cashier Absences and Transfer of Accountability, for the procedures.

  3. If the unplanned absence extends beyond 15 consecutive workdays or the cashier is not returning, the Special Agent in Charge must formally transfer the accountability. See IRM 1.32.8.12, Planned Cashier Absences and Transfer of Accountability, for the procedures.

  4. An independent audit of the investigative imprest fund is required. This audit does not substitute for a quarterly unannounced audit. See IRM 1.32.8.18.1, Audit Process, for additional information.

  5. The alternate cashier retains the responsibility and accountability for the investigative imprest fund until it is formally transferred back to the principal cashier or until a new principal cashier is designated.

1.32.8.14  (01-14-2011)
Advances to Investigative Personnel

  1. Advances may be provided to special agents to cover their expenses on an approved authorization. The special agent requests an advance of funds following procedures prescribed by CI internal operating procedures. The cashier advances funds to the special agent in anticipation of an authorized expenditure. If the expenditure does not occur, the special agent returns the funds immediately to the cashier by check or money order made payable to "CI Imprest Fund."

  2. Before advancing any funds, the cashier verifies:

    1. A current authorization is on file.

    2. The maximum amount for the approved authorization is not exceeded.

  3. The cashier maintains a detailed record for all transactions in the CI Imprest Fund Computer Program.

  4. A special agent (trained as a cover agent) may receive an advance of funds for investigative expenditures and submit claims for reimbursement on behalf of another special agent only in an undercover operation.

  5. The special agent receiving the funds must not commingle it with other official funds for which the employee has custody, nor with any private funds.

  6. As soon as the expenditures for which the funds were advanced are complete, the special agent follows CI's internal operating procedures to report all transactions to the cashier, with the appropriate receipts. Unused funds are returned to the cashier by check or money order made payable to "CI Imprest Fund."

  7. The cashier may not accept cash.

1.32.8.15  (01-14-2011)
Expenditures

  1. Two types of expenditures can be made from the investigative imprest fund: confidential and non-confidential. Each disbursement must be properly authorized and documented according to CI internal operating procedures.

  2. For additional information on confidential and non-confidential expenditures, see IRM 9.11.1, Fiscal and Budgetary Matters, and Delegation Order 9-10, Authorization to Approve Confidential Expenditures in IRM 1.2.48, Delegations of Authority for Criminal Investigation Activities.

  3. The cashier maintains a detailed record for each expenditure in the CI Imprest Fund Computer Program.

  4. Special agents must follow CI internal operating procedures when requesting reimbursement from the investigative imprest fund. Reimbursement for improper payments, including gifts and loans, are not allowed from the investigative imprest fund.

  5. Expenses initially identified as unrecoverable but subsequently recovered are handled in the same manner as security deposits. See IRM 1.32.8.15.2, Security Deposits, for additional information.

1.32.8.15.1  (01-14-2011)
Income from Operations

  1. Only the proceeds from a churning undercover operation may be used to offset the expenses of the operation. Undercover operations that earn minimal amounts of income, on an infrequent basis, are not required to be approved for churning. If an undercover operation which is not approved for churning earns income, the income must be sent to BFC for deposit to the General Fund as miscellaneous receipts.

  2. Income earned from an approved churning operation may be used to fully fund the operation but is limited to the amount of the confidential funds and expenses authorized for the operation. Income earned in an approved churning operation must be sent to BFC to be applied against that undercover operation's internal order.

  3. The cashier sends all checks or money orders, payable to the "Internal Revenue Service," with a transmittal memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Deposit Room
    110 N. Heber Street
    Beckley, WV 25802-9002

  4. The authority for churning proceeds is in 26 USC section 7608(c), Rules Relating to Undercover Operations.

  5. For additional information, see IRM 9.11.1, Fiscal and Budgetary Matters.

1.32.8.15.2  (01-14-2011)
Security Deposits

  1. Security deposits are treated as an advance of funds from an investigative imprest fund. However, if it is determined that the security deposits are non-recoverable, they are expensed on the monthly report by the special agent and sent to BFC, following CI internal operating procedures.

  2. When a security deposit is expensed through the investigative imprest fund, but later refunded to the special agent from the vendor, the special agent must send the security deposit to BFC for re-deposit to the CI appropriation. The security deposit is not returned to the cashier. If the security deposit is paid from an open (unexpired) appropriation, the special agent must send the security deposit to BFC by memorandum with the following statements:
    "The amount transmitted herewith represents the refund of funds previously expensed through the investigative imprest fund. These funds should be re-deposited to CI's appropriation."

  3. In cases where an appropriation has expired, BFC deposits the security deposit as a miscellaneous receipt in the General Fund.

  4. The Special Agent must send all checks or money orders, payable to the "Internal Revenue Service," with a transmittal memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Deposit Room
    110 N. Heber Street
    Beckley, WV 25802-9002

  5. For additional information, see IRM 9.11.1, Fiscal and Budgetary Matters.

1.32.8.16  (01-14-2011)
Monthly Reconciliation and Reporting

  1. At the end of every month, the cashier must reconcile the investigative imprest fund and prepare the monthly reconciliation forms. These forms are generated from the CI Imprest Fund Computer Program. For additional information, see IRM 9.11.1, Fiscal and Budgetary Matters.

  2. The cashier sends the forms with the supporting documents to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  3. The cashier must retain a copy of the forms and the supporting documents.

1.32.8.16.1  (01-14-2011)
Checking Account Replenishment

  1. The cashier must prepare a reimbursement voucher to replenish the funds in the checking account to maintain the correct balance. The cashier sends the voucher with the monthly reconciliation forms to BFC.

  2. After the Director, BFC approves the request, BFC transmits the funds via EFT to the checking account at the financial institution.

1.32.8.17  (01-14-2011)
Security - Physical Facilities and Safeguards

  1. The cashier retains exclusive control of all checks and record documentation in containers which meet the requirements of IRM 10.4.1, Managers Security Handbook.

  2. Checks and record documentation must not be stored in:

    1. File cabinets with key locks; for example, wooden cabinets or metal cabinets not designed and/or approved for secure storage.

    2. The cashier's or any other employee's desk drawer.

    3. Depositories in the cashier's name only.

    4. Safe deposit boxes solely in the cashier's name.

  3. Keys and combinations must be issued and accounted for in accordance with IRM 10.4.1, Managers Security Handbook.

  4. The security container must be locked at all times except when the cashier is actually making a transaction. The container must be locked whenever the cashier is absent, even if the absence is only momentary.

  5. The security container must not be located in an area that can easily be observed by the public.

  6. Investigative imprest funds must not be commingled at any time with private funds or unofficial funds. They must be kept separate in a locked security container.

  7. Space assigned to the cashier is subject to periodic, unannounced inspections by IRS security officers. This is to ensure proper safeguards are maintained to prevent unauthorized individuals from having access to the cashier area and to emphasize protection of the investigative imprest funds.

1.32.8.18  (01-14-2011)
Unannounced Audits

  1. Unannounced audits of investigative imprest funds must be performed at least once each quarter. The timing of the audit should not be predictable or the element of surprise will be lost.

  2. The purpose of the unannounced audit includes ascertaining the amount of the fund and verifying the actual composition of the fund.

  3. Additional information on unannounced audits can be found in IRM 9.11.1, Fiscal and Budgetary Matters, Exhibit 9.11.1-2.

1.32.8.18.1  (01-14-2011)
Audit Process

  1. Auditing employees must be independent and have no interest in the operation of the investigative imprest fund. For example, the employee must not be authorized to approve expenditures or other transactions from the investigative imprest fund and must not be the supervisor of the cashier.

  2. Employees appointed to perform the audit must not perform two successive audits. Employees should alternate with other eligible employees.

  3. The cashier provides the following documents to the auditors:

    1. Form 2844, Reconciliation of Imprest Fund.

    2. OF 211, Request for Change or Establishment of Imprest Fund, for any changes that have occurred since the last audit.

    3. Form 1149, Statement of Designated Depository Account.

    4. Form 1129, Cashier Reimbursement Voucher and/or Accountability Report.

    5. Checking account documentation, such as the check register, uncashed checks, deposits in transit, and unreimbursed vouchers.

  4. The auditing employees must provide the audit report with original signatures to the Special Agent in Charge, and mail a copy of the audit report to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  5. The audit report may be destroyed six years, three months, after the period covered by the report.

1.32.8.19  (01-14-2011)
Internal Controls

  1. The accountability for each investigative imprest fund is vested solely in the designated cashier. Accountability can be formally transferred to an alternate cashier or to an incoming principal cashier, but accountability rests with only one individual at a time. Cashiers and their alternates are not allowed under any circumstances, during their official duty hours, to maintain any unofficial or additional funds other than the funds they are specifically designated to administer.

  2. The Special Agent in Charge and the Special Investigative Techniques Program Analyst review the fund level of each investigative imprest fund once a year to ensure it does not exceed actual needs.

  3. The cashier must maintain a clear separation of duties to ensure the effectiveness of internal controls. For example, cashiers must not have control or responsibility over the approval of expenditures from the investigative imprest fund.

  4. The employee requesting an advance of funds must have proper identification and authorization before the cashier disburses funds from the investigative imprest fund.

  5. Cashiers (principal or alternate) must not disburse any funds to an employee on behalf of another employee unless specifically authorized.

1.32.8.19.1  (01-14-2011)
Independent Reviews

  1. Investigative imprest funds are audited periodically by personnel from the Treasury Inspector General for Tax Administration (TIGTA) in accordance with its regulations and procedures. TIGTA furnishes a copy of each audit report to:

    1. Chief, Criminal Investigation.

    2. Director, Special Investigative Techniques.

    3. Director, Beckley Finance Center.

    4. Special Agents in Charge for the applicable investigative imprest fund(s).

  2. The audit report is reviewed to evaluate the significance of any adverse findings and for initiation of appropriate procedural or systemic modifications.

1.32.8.20  (01-14-2011)
Investigative Imprest Fund Losses

  1. The Special Agent in Charge is responsible for immediately reporting all losses to the investigative imprest fund to the Director, BFC.

  2. The Special Agent in Charge must send a written report immediately when any loss or shortage occurs, including:

    1. Robbery, burglary, and/or theft.

    2. Illegal disbursements resulting from fraud, forgery, alteration of vouchers, or other improper practices.

    3. Improper accounting.

    4. Any other irregularity.

  3. The report to the Director, BFC must include:

    1. A detailed statement of facts, including the type of irregularity, date, amount, names of individuals involved, and a description of how the irregularity occurred.

    2. A citation to any pertinent supporting documents such as pay records, contracts, and vouchers.

    3. Information on procedural deficiencies and the proposed corrective action, if applicable and known at the time the report is prepared.

    4. Information on the funds recouped from the individual, or expected to be recouped, if applicable and known at the time the report is prepared.

  4. See IRM 10.2.8, Emergency Planning and Incident Reporting, for additional information.

1.32.8.20.1  (01-14-2011)
Other Required Action

  1. If the loss of funds appears to be the result of unlawful or other improper action by the cashier, the Special Agent in Charge impounds, audits, and transfers the remaining balance of the investigative imprest fund to the alternate cashier or to a new principal cashier.

  2. There may be cases where the cashier repays the lost funds and relief is not requested. The repayment must be made by check payable to the "Internal Revenue Service." The Special Agent in Charge provides the cashier with a receipt for the re-payment amount, and sends the check with an appropriate transmittal memorandum to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Deposit Room
    110 N. Heber Street
    Beckley, WV 25802-9002

  3. If the cashier repays the lost funds, and later a determination is made that the cashier was not at fault (for example, new evidence is discovered), BFC and the Special Agent in Charge take immediate action to ensure the cashier is granted relief and reimbursed for the full amount paid.

1.32.8.20.1.1  (01-14-2011)
Debt Collection

  1. BFC is responsible for managing the account receivables for administrative debts. After receipt of the Special Agent in Charge's written report, BFC determines if a debt is owed to the IRS, and maintains a record of the debt. The loss is recorded as an account receivable in IFS, in the cashier's name, until the matter is resolved.

  2. After the account receivable is established, the IRS mails a billing notice through the United States Postal Service, by first-class postage, to the cashier. The billing notice contains all due process rights and the following information:

    1. Type or nature of the debt owed.

    2. The amount of the debt.

    3. The payment due date, usually 30 days from the billing notice date.

    4. Repayment options available to the debtor, if the debt can not be paid in full.

    5. The address to send payment.

    6. The debtor's process rights.

    7. The collection actions that IRS may enforce if the debt is not paid by the payment due date.

  3. Information on administrative debt policy is located on the Internal Financial Management (IFM) website under the heading: Debt Collection - Employee Non-Tax Debt. Refer to the policy for information about the debt collection process.

1.32.8.20.2  (01-14-2011)
Relief of Cashiers

  1. The cashier is accountable for the entire amount of the investigative imprest fund for which the cashier is designated. If relief is granted for the loss of all or part of the fund, the amount relieved is restored to the fund by an obligation against the IRS appropriation(s). Granting relief does not imply that funds are forthcoming from another Government agency or another source. Relief is made to the individual cashier not to the IRS or to the financial plan(s) involved.

  2. Relief may be granted by:

    1. Administrative action by the Director, Office of Financial Management Policy, in accordance with Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers, if the loss is less than $10,000.

    2. Administrative action by the Chief Financial Officer, in accordance with Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers, if the loss is $10,000 or more.

  3. Relief may not be granted for circumstances involving illegal, improper, or incorrect payments, both in nature and amount, including those resulting from fraud, forgery, alterations of vouchers, and other improper practices.

1.32.8.20.3  (01-14-2011)
Grounds for Relief

  1. Relief will be granted only in cases where the loss occurred through no fault of the cashier.

  2. Relief will not be granted in cases where the loss has occurred because of negligence on the part of the cashier. The Special Agent in Charge determines whether or not the cashier has been negligent in the performance of investigative imprest fund duties. As a guideline for this determination, negligence may be indicated by the presence of one or more of the following factors:

    1. Frequent errors in transactions, record keeping, or reports.

    2. Embezzlement or misappropriation of investigative imprest funds.

    3. Failure to maintain records and/or to submit reports.

    4. Unprotected investigative imprest funds, particularly if theft is involved.

    5. Unauthorized or improperly documented transactions.

    6. Unexplained disappearance or shortage of investigative imprest funds.

1.32.8.20.4  (01-14-2011)
Requesting Relief

  1. A cashier may request relief from repaying a loss in the investigative imprest fund. The cashier must prepare a statement explaining the circumstances of the loss and its discovery and give it to the Special Agent in Charge.

  2. The Special Agent in Charge must send a memorandum requesting relief, regardless of the amount, to:


    Internal Revenue Service
    Director, Beckley Finance Center
    Attn: Miscellaneous Programs Unit
    110 N. Heber Street
    Beckley, WV 25802-9002

  3. The following documents must be attached to the memorandum:

    1. A detailed statement from the cashier explaining the circumstances of the loss and its discovery.

    2. Statements from the cashier's supervisor supporting the recommendation for relief.

    3. Statements obtained through the local Security Officer, the Federal Bureau of Investigation, the Secret Service, and/or the local police authority, as applicable, explaining their findings.

    4. Other pertinent documents or information.

  4. The Director, BFC sends the request for relief with the attached documents to the Director, Office of Financial Management Policy.

  5. If relief is granted to the cashier for all or part of the fund, BFC restores the amount relieved to the investigative imprest fund by obligating it against the IRS appropriation(s).


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