1.35.18 Imprest Funds

Manual Transmittal

December 18, 2015

Purpose

(1) This transmits revised IRM 1.35.18, Financial Accounting, Imprest Funds.

Material Changes

(1) The Office of Servicewide Policy, Directives and Electronic Research (SPDER) renumbered this IRM from 1.32.8 to 1.35.18.

(2) The IRM was renamed from Investigative Imprest Funds to Imprest Funds focusing on the IRS cash management of funds held outside of the Treasury and includes the Property Appraisal and Liquidation program as an additional authorized imprest operation.

(3) Added the statute language and sources for IRS waiver authority to operate imprest operations to 1.35.18.2, Background.

(4) Revised the following to 1.35.18.3, Authorities:

  1. Added United States Code (USC), Title 31, Chapter 33, Depositing and Keeping Money.

  2. Added Code of Federal Regulations (CFR), Title 26, Part 301, Procedure and Administration Collection and Seizure of Property for Collection of Taxes.

  3. Added CFR, Title 31, Part 202, Depositaries and Financial Agents of the Federal Government.

  4. Added CFR, Title 31, Part 208, Management of Federal Agency Disbursements.

  5. Added Internal Revenue Code, Subtitle F, Chapter 64, Collection.

  6. Added Treasury Financial Manual (TFM), Vol. I, Part 2, Chapter 3400, Accounting for and Reporting on Cash and Investments Held Outside of the U.S. Treasury.

  7. Added Government Accountability Office, Principles of Federal Appropriation Law, Vol. II, Chapter 9, Liability and Relief of Accountable Officials.

  8. Added IRM 5.10.5, Seizure and Sale.

  9. Removed TFM, Vol. I, Part 4, Chapter 3000, Third-Party Draft Procedures for Imprest Fund Disbursing Agencies.

(5) Revised the following to 1.35.18.4, Related Resources:

  1. Added TFM, Vol. I, Part 2, Chapter 3100, Instructions for Disbursing Officers' Reports.

  2. Added IRM 9.4.8, Undercover Operations.

(6) Every IRS office and/or role identified in 1.35.18.6, Responsibilities was revised to identify the current official title and to more accurately describe responsibilities. The following offices and/or roles were added:

  1. Director, Financial Reports Office.

  2. Criminal Investigation Attaches (International Operations).

  3. Criminal Investigation Cashiers.

  4. Criminal Investigation Alternate Cashiers.

  5. Headquarters International Operations Cashier.

  6. Headquarters International Operations Alternate Cashier.

  7. International Sub-cashiers.

  8. Property Appraisal and Liquidation Program Manager.

  9. Property Appraisal and Liquidation Cashier.

  10. Property Appraisal and Liquidation Alternate Cashier.

  11. Property Appraisal and Liquidation Sub-cashier.

(7) Added new section 1.35.18.8, Types of Imprest Funds, that list the authorized IRS imprest funds.

  1. Sections 1.35.18.7.1, Criminal Investigation Imprest Fund (Domestic Operations), and 1.35.18.7.2, Criminal Investigation Imprest Funds (International Operations), identify the different procedures authorized for Criminal Investigation (CI) in supporting investigative operations and imprest funds abroad.

  2. Section 1.35.18.7.3, Property Appraisal and Liquidation (PAL), was added to authorize imprest fund change making support for the Property Appraisal and Liquidation (PAL) program.

(8) All sections of the previous IRM 1.32.8 were revised to account for imprest funds from an overall IRS perspective, versus solely a CI perspective. Additionally, many sections were reorganized to more accurately match the operational steps an organization would follow during the lifecycle management of an imprest fund (opening to close).

  1. 1.35.18.9, Establishing an Imprest Fund.

  2. 1.35.18.10, Designation of Cashier.

  3. 1.35.18.11, Establishing an Imprest Fund Checking Account.

  4. 1.35.18.12, Funding an Imprest Fund.

  5. 1.35.18.13, Changes in Cashiers.

  6. 1.35.18.14, Cashier Responsibilities.

  7. 1.35.18.15, Imprest Fund Internal Controls.

  8. 1.35.18.16, Imprest Fund Losses.

  9. 1.35.18.17, Fiscal Year-end Accounting.

  10. 1.35.18.18, Closing an Investigative Imprest Fund.

(9) Added a new section 1.35.18.9.1, Imprest Fund Requesting Officials, identifying the authorized individuals that may request the establishment of a new, or changes to an existing, imprest fund operation.

(10) Revised 1.35.18.11.2, Checking Account Signature Cards, to more clearly identify the mandatory signatures required and the exclusion of previously listed individuals that had the ability to authorize expenses, increasing separation of duties and internal controls.

(11) Revised and expanded 1.35.18.15, Imprest Fund Internal Controls, to clearly identify the mandatory internal controls necessary for imprest fund operations.

(12) Added the procedures for requesting and approving imprest fund cash operations within 1.35.18.8, Types of Imprest Funds.

(13) Added 1.35.18.10.1, Designating a Sub-cashier, to reclassify the Headquarters International Operations Cashier (as a Category B cashier) and the Property Appraisal and Liquidation Cashier (as a Category D cashier) and allowing for the appointment of sub-cashiers to support authorized IRS enforcement operations.

Effect on Other Documents

This supersedes IRM 1.32.8, dated January 14, 2011.

Audience

Criminal Investigation Division
Small Business / Self-Employed Division
Chief Financial Officer

Effective Date

(12-18-2015)


Jeffrey S. Wallbaum
Acting Chief Financial Officer

Overview

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

  2. The Associate Chief Financial Officer, Financial Management, Financial Management Policy Office, develops and maintains this IRM.

Background

  1. In accordance with the implementation of the Debt Collection Improvement Act of 1996, imprest funds may only be used when the Electronic Funds Transfer (EFT) requirement is waived.

  2. The Department of the Treasury, Bureau of the Fiscal Service, Policy Directive: Imprest Funds Policy Statement (dated November 9, 1999) states that all imprest funds are to be eliminated unless they meet certain identified waiver criteria.

  3. The IRS maintains imprest funds as identified in the waiver authority derived from within the Treasury Imprest Fund Policy Directive and identified in 31 CFR 208, §208.4, Waivers:

    • Where a threat may be posed to national security, the life or physical safety of any individual may be endangered, or a law enforcement action may be compromised;

    • Where an agency’s need for goods and services is of such unusual and compelling urgency that the Government would be seriously injured unless payment is made by a method other than electronic funds transfer; or, where there is only one source for goods or services and the Government would be seriously injured unless payment is made by a method other than electronic funds transfer.

  4. The IRS has two separate Business Units (BUs) that require cash to support Internal Revenue Code law enforcement operations:

    • CI serves as the law enforcement arm of the IRS, and performs various undercover operations in support of its mission. CI establishes investigative imprest funds to provide special agents with funding for ongoing covert operations.

    • SB/SE conducts liquidation auctions as part of its responsibilities under the Property Appraisal and Liquidation (PAL) program. SB/SE does not have the capability to conduct electronic sales transactions at most auction locations and must provide the opportunity to support cash sales as stated in Treasury Regulation, section 301.6335-1(7), Payment of Bid Price, "all payments for property sold under this section shall be made by cash or by certified, cashiers, or treasury check drawn on any bank or trust company incorporated under the laws of the U.S. or under the laws of any State." This necessitates that cash be made available to support the program.

Authorities

  1. The authorities for this IRM include:

    1. Internal Revenue Code, Section 7608, Authority of Internal Revenue Enforcement Agents.

    2. United States Code, Title 31, Chapter 33, Depositing, Keeping, and Paying Money.

    3. Code of Federal Regulations, Title 26, Part 301, Procedure and Administration Collection Seizure of Property for Collection of Taxes.

    4. Code of Federal Regulations, Title 31, Part 202, Depositaries and Financial Agents of the Federal Government.

    5. Code of Federal Regulations, Title 31, Part 208, Management of Federal Agency Disbursements.

    6. Internal Revenue Code, Subtitle F, Chapter 64, "Collection" .

    7. Department of the Treasury, Bureau of the Fiscal Service, Policy Directive: Imprest Fund Policy Statement, November 9, 1999.

    8. Department of the Treasury, Bureau of the Fiscal Service, Manual of Procedures and Instructions for Cashiers, April 2001.

    9. Treasury Financial Manual, Vol. I, Part 4, Chapter 8000, Designated Depository Checking Accounts.

    10. Treasury Financial Manual, Vol. I, Part 2, Chapter 3400, Accounting for and Reporting on Cash and Investments Held Outside of the U.S. Treasury.

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

    12. Government Accountability Office, Principles of Federal Appropriations Law, Volume II, Chapter 9, Liability and Relief of Accountable Officers.

    13. IRM 1.2.48.11, Delegation Order 9-10, Authorization to Approve Confidential Expenditures.

    14. IRM 1.2.40.17, Delegation Order 1-18, Settlement of Accounts and Relief of Accountable Officers.

    15. IRM 5.10.5, Seizure and Sale, Sale Procedures.

    16. IRM 1.35.7, Debt Collection.

Related Resources

  1. Related resources for this IRM include:

    1. Internal Revenue Code, Section 7608, Authority of Internal Revenue Enforcement Agents.

    2. Treasury Financial Manual Vol. I, Part 2, Chapter 3100, Instructions for Disbursing Officers' Reports.

    3. IRM 9.4.8, Undercover Operations.

    4. IRM 9.11.1, Fiscal and Budgetary Matters.

    5. IRM 10.4.1, Managers Security Handbook.

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

    7. IRM 10.2.8, Emergency Planning Incident Reporting.

Definitions

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

    1. Accountable Officer - A certifying officer, disbursing officer, collecting official, cashier, and any other officer or employee who is responsible for or has custody of public funds.

    2. Cashier - A U.S. Government employee who is responsible for issuing and reconciling requested funds from an imprest fund.

    3. Class A Cashier - A cashier, officer, or employee who receives an advance from a Federal agency appropriation and has not been authorized to advance an imprest fund to another cashier, except the alternate. The Class A cashier is personally accountable to the head of the Federal agency or designee for the entire amount of the advance received.

    4. Class B Cashier - A cashier, officer, or employee who receives an advance from a Federal agency appropriation and is authorized to advance an imprest fund to his or her own alternate and to a subcashier. The Class B cashier is personally accountable to the head of the Federal agency or designee for the entire amount of the advance received.

    5. Class D Cashier - A cashier, officer, or employee who receives an advance from a Federal agency appropriation solely for change-making purposes. They may advance funds to subcashiers for change-making purposes only upon authorization by the head of the Federal agency from which they received the advance. The Class D cashier is personally accountable to the head of the Federal agency for the entire amount of the advance.

    6. Sub-cashier - A permanent officer or employee who has been designated in writing by the head of a Federal department designee to receive an imprest fund from a Class B or D cashier, and who is under the supervision of the head of the same business unit as the cashier from whom the advance is received, and is accountable to such cashier for the funds received. The provisions for payment limitations and safekeeping that apply to cashiers also apply to subcashiers.

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

    8. Checking Account Signature Cards - Cards signed by the cashier for opening a checking account at a financial institution.

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

    10. Churning - The act of using income generated from an undercover operation to offset the necessary and reasonable expenses of undercover operations.

    11. Disbursing Officer - An employee of the Federal Government, a Treasury Disbursing Officer (TDO), or non-Treasury Disbursing Officer (NTDO), authorized to perform financial transactions (deposit collections, disburse checks, and transfer funds between agencies).

    12. Imprest Fund - Cash advanced to a duly authorized cashier for a specific purpose which is charged against a Government appropriation account.

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

    14. Investigative Expenditures - Confidential and non-confidential expenses incurred by special agents in connection with an undercover program.

Responsibilities

  1. This section provides responsibilities for:

    1. Chief Financial Officer.

    2. Associate Chief Financial Officer for Financial Management.

    3. Director, Beckley Finance Center.

    4. Director, Financial Management Policy Office.

    5. Director, Financial Reports Office.

    6. Chief, Criminal Investigation.

    7. Criminal Investigation, Director of Field Operations.

    8. Criminal Investigation, Director, Special Investigative Techniques.

    9. Director, Finance, Criminal Investigation.

    10. Special Agents in Charge.

    11. Criminal Investigation Attaches (International Operations).

    12. Criminal Investigation Special Agents.

    13. Criminal Investigation Cashiers.

    14. Criminal Investigation Alternate Cashiers.

    15. Criminal Investigation Headquarters International Operations Cashier.

    16. Criminal Investigation Headquarters International Operations Alternate Cashier.

    17. Criminal Investigation International Sub-Cashiers.

    18. Small Business/Self-Employed Property Appraisal and Liquidation Program Manager.

    19. Small Business/Self-Employed Property Appraisal and Liquidation Cashier.

    20. Small Business/Self-Employed Property Appraisal and Liquidation Alternate Cashier.

    21. Small Business/Self-Employed Property Appraisal and Liquidation Sub-Cashiers.

Chief Financial Officer

  1. The Chief Financial Officer (CFO) is responsible for:

    1. Overseeing all IRS financial management responsibilities in relation to imprest funds on behalf of the IRS Commissioner.

    2. Ensuring financial policy and processes in support of IRS imprest fund operations are established and managed with appropriate oversight and internal controls.

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

Associate Chief Financial Officer for Financial Management

  1. The Associate Chief Financial Officer for Financial Management (ACFO-FM) is responsible for:

    1. Overseeing IRS disbursing and cash management responsibilities on behalf of the Commissioner and CFO.

    2. Establishing, maintaining, and ensuring compliance with accounting policy and procedures for internal accounting operations and financial reporting on imprest funds.

    3. Establishing financial policy and processes in support of IRS imprest operations.

    4. Ensuring that IRS disbursing and cash management operations managed by the Director, Beckley Finance Center are in compliance with applicable Federal statutes, Treasury Financial Management regulations, Treasury cash management guidance, and within waiver authority delegated by the Secretary of the Treasury.

Director, Beckley Finance Center

  1. The Director, Beckley Finance Center (BFC) is assigned IRS Disbursing Officer responsibilities and is responsible for:

    1. Ensuring disbursing and cash management programs adhere to Federal statutory and Department of the Treasury policies, regulations, and guidance.

    2. Approving the establishment of imprest funds.

    3. Authorizing funding limitations associated for each imprest fund.

    4. Authorizing establishment of checking accounts to support imprest fund operations.

    5. Ensuring all imprest fund advances are maintained in approved Treasury financial institutions or maintained according to the storage instructions included in the approval for limited cash operations.

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

    7. Authorizing all imprest funds requiring cash operations not held within Treasury approved financial institutions including review/approval of storage and security of cash, internal controls (including quarterly external inspections), and authorizing minimum funding limitations.

    8. Approving appointment for all IRS disbursing agents and ensuring that adequate training has been completed prior to assuming disbursing agent duties.

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

    10. Ensuring monthly depository account reconciliation and expense reports are received and forwarded to the appropriate reporting officers.

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

    12. Approving, in coordination with the Chief, Criminal Investigation, any temporary waiver authority to support operational requirements that deviate from instructions established within this IRM.

    13. Ensuring proper oversight and internal controls are established for all IRS cash management and disbursing programs.

Director, Financial Management Policy Office

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

    1. Developing and issuing policy for imprest funds.

    2. Acting as the primary liaison with the Department of the Treasury for gaining all waiver approvals necessary for IRS imprest fund operations.

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

Director, Financial Reports Office

  1. The Director, Financial Reports Office is responsible for:

    1. Validating all internal accounting associated with imprest fund operations, including annotation of imprest funds within the appropriate general ledger account, and annotated in the footnotes of the annual financial statement.

    2. Reviewing and validating BFC Monthly Imprest Fund reports ensuring IFS sub-ledger accounts balance with Cashier Reports.

Chief, Criminal Investigation

  1. The Chief, Criminal Investigation is responsible for:

    1. Providing oversight of the investigative imprest fund program including headquarters reviews that confidential expenses are compliant with IRS policy and guidelines.

    2. Establishing a centralized financial plan for the conduct of CI operations.

    3. Approving all Group I undercover operations including approval of undercover plan for operations.

    4. Approving Form 8561, Request for Recoverable/Confidential/Incidental/Seizure Funds, in excess of $20,000.

Criminal Investigation Director of Field Operations

  1. The Director of Field Operations is responsible for:

    1. Monitoring the overall program of expenditures made from investigative imprest funds in the area and field offices.

    2. Approving all Group II undercover operations including approval of undercover plan for operations.

    3. Approving the initial Form 8561, Request for Recoverable/Confidential/Incidental/Seizure Funds, up to $20,000, as well as concurring with requests for additional funds.

Criminal Investigation Director, Special Investigative Techniques

  1. The Director, Special Investigative Techniques is responsible for:

    1. Implementing 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.

    2. Ensuring reviews of undercover operations are conducted.

    3. Receiving closing reports from Special Agents in Charge no later than 60 days after the close of operations.

Director, Finance, Criminal Investigation

  1. The Director, Finance, Criminal Investigation is responsible for:

    1. Committing and obligating funds for the investigative imprest fund program.

    2. Ensuring non-confidential purchases from investigative imprest funds are approved by staff authorizing officials.

Criminal Investigation Special Agents in Charge

  1. Special Agents in Charge are responsible for:

    1. Ensuring CI operations using imprest funds are in 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 CI cashiers and CI alternate cashiers.

    4. Supervising investigative imprest funds, including designating, assisting, training, and directing cashiers (that are field office employees) in the performance of their duties.

    5. Providing supervision and control over the operations of the cashiers that are field office employees.

    6. Providing supervision to undercover and cover agents during the conduct of approved operations.

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

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

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

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

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

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

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

    14. Terminating undercover operations, once a determination is made that the objectives have been accomplished, or can’t be accomplished, and preparing a closing report within 30 days.

    15. Ensuring audits are performed as required.

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

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

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

    19. Notifying BFC about increases or decreases to an investigative imprest fund.

    20. Certifying to the accuracy and legality of payments made from Federal Government funds.

Criminal Investigation Director, International Operations

  1. Criminal Investigation Director, International Operations is responsible for:

    1. Providing oversight for international investigative imprest funds.

    2. Providing supervision and control over the operations of the International Operations sub-cashiers assigned to a foreign post.

    3. Providing safeguards over the international investigative imprest funds and related records.

    4. Approving forms associated with the international investigative imprest fund. This includes signature on the investigative imprest fund foreign bank account.

    5. Approving advances and/or reimbursements from the international investigative imprest fund.

    6. Reviewing month-end reports.

    7. Approving Form 10411, Reimbursement Claim for Confidential Expenditures on Official Business, as the first level official at a foreign post.

    8. Ensuring approved Form 10411, accompanied by scanned original receipts, is mailed or electronically transmitted, with tracking to the Headquarters International Operations Cashier in Washington, DC.

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

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

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

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

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

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

    15. Certifying to the accuracy and legality of payments made from Federal Government funds.

Criminal Investigation Special Agents

  1. Special agents are responsible for:

    1. Complying with IRS policy and guidelines regarding imprest funds.

    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.

Criminal Investigation Cashiers

  1. Criminal Investigation (CI) 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 all investigative imprest funds in approved financial institutions unless authorization for cash operations is approved by the Director, BFC.

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

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

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

    9. Not making any payment that is questionable in nature.

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

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

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

    13. If directed, restoring any loss for which he or she is held accountable (see IRM 1.35.18.16, Imprest Fund Losses).

    14. Completing imprest fund training.

Criminal Investigation Alternate Cashiers

  1. Criminal Investigation (CI) alternate cashiers are responsible for:

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

    2. Performing CI cashier duties, as detailed in IRM 1.35.18.6.13, Criminal Investigation Cashiers, 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.

    4. Completing imprest fund training.

Criminal Investigation Headquarters International Operations Cashier

  1. The Headquarters (HQ) International Operations Cashier is responsible for performing all of the same duties as CI cashiers. The HQ International Operations Cashier is appointed as a Class B Cashier and is additionally responsible for:

    1. Authorizing international sub-cashiers appointed by the Director, International Operations with the approval of BFC.

    2. Performing the same cashier duties as detailed in IRM 1.35.18.6.13, Criminal Investigation Cashier.

    3. Advancing international imprest funds electronically to investigative imprest funds maintained in approved overseas financial institutions.

    4. Ensuring all financial transactions received from the monthly International Operations sub-cashiers reports are input into the CI Imprest Fund Computer Program.

    5. Completing imprest fund training.

  2. The HQ International Operations cashier is located in Washington, DC.

Criminal Investigation Headquarters International Operations Alternate Cashier

  1. The Headquarters International Operations Alternate Cashier is responsible for:

    1. Accepting the transfer of accountability for the HQ international operations investigative imprest fund, before a planned absence of the principal HQ International Operations Cashier, and returning the accountability when the principal cashier returns.

    2. Serving as acting HQ International Operations Cashier in the absence of the principal HQ International Operations Cashier.

    3. Performing cashier duties as detailed in IRM 1.35.18.6.15, Headquarters International Operations Cashier, after accepting the transfer of accountability for the HQ international operations investigative imprest fund.

    4. Completing imprest fund training.

Criminal Investigation International Operations Sub-cashiers

  1. International operations sub-cashiers are responsible for the same duties as CI cashiers identified in 1.35.18.6.13, Criminal Investigation Cashiers, "except" :

    1. They do not have access to the CI Imprest Fund Computer Program. Therefore, all authorized expenses must be forwarded to the HQ international operations cashier (with supporting documentation) for input into the CI Imprest Fund Computer Program.

    2. All international operations sub-cashier's funds are advanced from the HQ international operations cashier versus BFC.

    3. International operations sub-cashiers are located at overseas posts.

Small Business/Self-Employed Property Appraisal and Liquidation Program Manager

  1. The Property Appraisal and Liquidation (PAL) Program Manager is responsible for:

    1. Ensuring PAL operations using imprest funds are in compliance with IRS policy and guidelines.

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

    3. Supervising imprest funds, including designating, assisting, training, and directing cashiers (and alternates) in the performance of their duties.

    4. Coordinating all liquidation auctions in support of the PAL program including assignment of a PAL specialist (as sub-cashier) to support the liquidation auction with a change-making fund.

    5. Notifying the PAL cashier of the PAL specialist assigned to perform change-making duties at the various liquidation auctions.

    6. Approving the sub-voucher for the change fund to be assigned to the sub-cashier.

    7. Overseeing and validating the balance of the PAL cashier's account as part of the monthly reporting.

    8. Interacting with BFC on all aspects of the PAL imprest fund operations including compliance with the requirements identified throughout this IRM.

    9. Ensuring proper procedures are accomplished during any transfer of accountability of cashier responsibilities.

    10. Ensuring audits are performed as required.

    11. Maintaining audit reports for six years and three months.

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

    13. Taking appropriate action in case of loss, or possible loss, of all or a portion of an imprest fund, including change funds assigned to sub-cashiers.

Small Business/Self-Employed Property Appraisal and Liquidation Cashier

  1. The PAL Cashier is responsible for:

    1. Managing the PAL imprest fund in an approved financial institution as a change-making fund only.

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

    3. Designating PAL specialists, as sub-cashiers, (as assigned by the PAL Program Manager) with the authority to provide a change-making capability at approved liquidation auctions.

    4. Providing the sub-cashier a check for the authorized change fund upon receipt of an approved sub-voucher.

    5. Ensuring the sub-cashier understands all accountable official responsibilities including the protection of cash in approved storage container and the return of funds within five business days after the close of the liquidation auction.

    6. Maintaining detailed records and documentation of all transactions.

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

    8. Reconciling the authorized imprest fund balance with the current bank statement, and any outstanding sub-vouchers on a monthly basis, including review by the PAL Program Manager before forwarding to BFC.

    9. Accepting personal accountability and responsibility for the custody of the PAL imprest fund, including all sub-vouchers.

    10. Transferring accountability for the PAL imprest fund to the alternate cashier before planned absence following established procedures.

    11. Reconciling the imprest fund monthly, and preparing all required forms.

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

    13. Completing imprest fund training.

Small Business/Self-Employed Property Appraisal and Liquidation Alternate Cashier

  1. The PAL Alternate Cashier is responsible for:

    1. Serving as acting Cashier in the absence of the principal Cashier.

    2. Performing cashier duties, as detailed in IRM 1.35.18.6.19, Property Appraisal and Liquidation Cashier, after accepting the transfer of accountability for an imprest fund.

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

    4. Completing imprest fund training.

Small Business/Self Employed Property Appraisal and Liquidation Sub-cashier

  1. The PAL Sub-cashier is responsible for:

    1. Maintaining the safety and security of funds used to ensure that sufficient money is available to provide change to successful bidders at cash sales.

    2. Maintaining an accurate record of all transactions and ensuring the fund balance is maintained, and returned to the PAL cashier within five business days after the conclusion of the liquidation auction.

    3. Accepting personal accountability and responsibility for the custody of the change fund, including responsibility for all shortages. Sub-cashiers may be directed to restore losses for which they are liable.

Beckley Finance Center Imprest Fund Management

  1. The Director, Beckley Finance Center (BFC) maintains management of the overall imprest fund program ensuring that all IRS cash management processes and disbursements are authorized and remain compliant with Federal statutes, Treasury financial regulations and relevant Federal regulations/directives as authorized by the Department of the Treasury’s Bureau of the Fiscal Service.

  2. All IRS imprest funds must be maintained in an authorized financial institution checking account unless cash operations are specifically authorized by the Director, BFC.

  3. All requests for CI cash operations must be forwarded by the appropriate Imprest Fund Requesting Official and approved by Director, Finance, Criminal Investigation. All requests for cash operations must include all relevant information covered under 1.35.18.15, Imprest Fund Internal Controls, for ensuring protection of assets and the safety of the cashier (and subcashiers). Additionally, an audit plan for quarterly unannounced audits must be developed and approved jointly between CI and BFC before cash operations can commence.

  4. The Beckley Finance Center (BFC), Miscellaneous Programs Unit, manages the IRS imprest fund program on behalf of the Director, BFC. They are the primary liaison office with business unit imprest fund managers and cashiers. All imprest fund correspondence should be sent to:

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

Types of Imprest Funds

  1. The IRS uses imprest funds to support:

    1. Criminal Investigation (CI) in support of IRS law enforcement and investigative activities, and

    2. Small Business/Self-Employed (SB/SE) Property Appraisal and Liquidation (PAL) Specialists conducting auctions of seized assets.

Criminal Investigation Imprest Fund (Domestic Operations)

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

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

  3. CI is authorized to certify imprest fund disbursements related to the enforcement of laws and regulations associated with investigating and enforcing the Internal Revenue Code. All investigative imprest fund disbursements are input and validated within the CI Imprest Fund Computer Program.

  4. All CI investigative imprest fund cashiers balance their monthly financial institution account statements and their monthly CI imprest fund disbursements, submitting copies to Beckley Finance Center on a monthly basis.

  5. All cash operations must be pre-approved by the Director, Beckley Finance Center. All authorized cash operations must be inspected quarterly by an authorized third-party as approved by CI and BFC.

Criminal Investigation Imprest Funds (International Operations)

  1. The international operations imprest funds are maintained using the same investigative imprest fund procedures as CI domestic operations. Exceptions to these procedures are discussed in this subsection.

  2. CI manages international investigative imprest operations through a centralized imprest fund office located in Washington, DC.

  3. International operations imprest funds are investigative imprest funds located in overseas posts, preferably in U.S. embassies.

  4. International operations imprest funds are maintained in checking accounts at U.S. banks in overseas locations, or in a comparable foreign bank if a U.S. bank is not available. The account name is "CI Imprest Fund." Any deviation to using the approved account name must be pre-approved by the Director, BFC.

  5. Each international operations sub-cashier who performs investigative imprest fund duties at an overseas location must be a:

    1. U.S. citizen, and a

    2. U.S. Government employee.

  6. If the international operations sub-cashier is not an IRS employee, CI initiates a Memorandum of Understanding (MOU) on a case-by-case basis with the Federal agency employing the cashier. The MOU should include all of the same responsibilities and duties as other international operations cashiers.

  7. All checks, receipts, and bank statements are scanned. The originals are retained in the overseas post location files.

  8. The international operations cashier e-mails the scanned copies of the checks and receipts monthly to the HQ International Operations Cashier. Bank statements are e-mailed monthly to the HQ International Operations Cashier.

  9. After month-end reconciliation, the CI attaché or cashier sends the original receipts and original bank statements to the HQ International Operations Cashier.

  10. All requests to increase, decrease, open, or close an international operations imprest fund are sent to the HQ International Operations Cashier who enters the financial information into the CI Imprest Fund Computer Program.

Property Appraisal and Liquidation (PAL)

  1. Small Business/Self-Employed (SB/SE) establishes imprest funds to provide a change-making capability supporting liquidation auctions associated with the PAL program. A central PAL Cashier is assigned cashier responsibilities and allocates sub-cashier change funds to the PAL specialist supporting the various liquidation auctions.

  2. The PAL program is authorized an imprest fund for change-making purposes only. PAL cashiers and sub-cashiers are not authorized to disburse funds for purchases.

  3. The PAL Cashier balances their monthly financial institution account statement and submits a copy to BFC on a monthly basis.

Establishing an Imprest Fund

  1. A request to establish an imprest fund is initiated by the appropriate business unit (BU) requesting official. The requesting official:

    1. Establishes that an operational requirement exists that can only be satisfied through the use of an imprest fund.

    2. Identifies the appropriate funding level required to meet operational requirements.

    3. Identifies both a primary and alternate cashier.

    4. Recommends a financial institution to support the imprest fund or forwards a request for cash operations outside of a financial institution. Funds that will not be held within a financial institution must be approved by the Director, Beckley Finance Center.

  2. If requesting an imprest fund cash operation (to be held outside an approved financial institution), the imprest fund requesting official must also determine:

    1. The cash requirement of the imprest fund (or the cash portion of the overall imprest fund, if a joint financial institution/cash operation is being recommended).

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

    3. The security requirements of the imprest fund storage location.

  3. Each imprest fund must have one alternate cashier.

  4. Each imprest fund is established and maintained using the Department of Treasury, Optional Form (OF) 211, Request for Change or Establishment of an Imprest Fund.

Imprest Funds Requesting Officials

  1. The following individuals are authorized, as requesting officials, to create memorandums to establish or make changes (for example, designation, revocation) for imprest funds:

    1. CI Special Agent in Charge.

    2. CI Director, International Operations.

    3. SB/SE PAL Program Manager.

  2. The authorized requesting officials send a memorandum with an explanation of the impending action to the Beckley Finance Center, Miscellaneous Programs Unit:

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

  3. The BFC prepares an OF 211 for the signature of the Director, BFC. Once signed, the original OF 211 is returned to the Imprest Fund Requesting Official.

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 or Criminal Investigation Attaché (International Operations) responsible for an investigative imprest fund.

    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.

Designation of Cashiers

  1. The appropriate imprest fund requesting official 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 cashier, alternate cashier, or sub-cashier must be an employee whose duties do not require making investigative expenditures or granting approval for investigative expenditures. For example, the Criminal Investigation Attache (International Operations) 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 imprest fund.

  5. Cashiers (with the exception of the HQ International Operations Cashier and the PAL Cashier) may not have sub-cashiers.

  6. Cashiers responsible for PAL imprest funds do not have authority to expense funds for purchases. The PAL imprest fund is authorized to support change-making only.

Designating a Sub-Cashier

  1. The HQ International Operations Cashier and the PAL Cashier are both authorized to appoint sub-cashiers to conduct authorized IRS imprest operations.

  2. The HQ International Operations Cashier is designated with Treasury Category B authority. In this capacity, the HQ International Operations Cashier is authorized to make disbursements and may also advance funds to a sub-cashier.

  3. The HQ International Operations Cashier must ensure that the safeguards established for investigative imprest funds are established for each international sub-cashier overseas location. That includes funds being maintained in an approved financial institution or obtaining pre-approval for cash operations.

  4. The HQ International Operations Cashier will maintain funds accountability for each sub-cashier within their imprest fund limitations. All advances to sub-cashiers will use electronic funds transfers to an approved international financial institution.

  5. The PAL Cashier is designated with Treasury Category D authority. In this capacity, the PAL Cashier can appoint sub-cashiers solely for change-making purposes. PAL sub-cashiers will submit an approved sub-voucher to the PAL Cashier to obtain a change-making fund.

  6. The PAL Cashier will advance change-making funds to the authorized PAL sub-cashiers using a check draft from the authorized financial institution. The amount should not exceed the amount authorized by the PAL Program Manager to support a particular liquidation auction. Change-making funds will be returned to the PAL Cashier (by check or money order) within 10 calendar days after the conclusion of the liquidation auction.

Establishing an Imprest Fund Checking Account

  1. All imprest funds should be maintained in checking accounts at authorized financial institutions approved by the Director, BFC.

  2. Imprest funds are maintained in checking accounts under the account name "CI Imprest Fund" for CI imprest funds and "SB/SE Imprest Fund" for the PAL imprest fund. The account is not in the name of a cashier.

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

  4. Checking accounts are identified by the IRS Employer Identification Number.

  5. Any deviations, or exceptions to the requirements established above, must be approved by the Director, BFC.

  6. At the end of the calendar year, the financial institution sends each 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

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

    1. Fees incurred.

    2. Checking account maintenance charges.

  8. 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.

Establishing or Transferring Checking Accounts

  1. The appropriate requesting official sends a memorandum requesting the establishment of a new checking account for an 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 the particular imprest fund financial institution.

    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. The BFC sends the original signed signature cards, the original Certification to Resolutions Governing Bank Account (from the financial institution), and the original Standard Form 3881 to the requesting official.

  5. The cashier establishes the checking account at a federally insured bank or credit union under the appropriate account name identified in IRM 1.35.18.11, Establishing an Imprest Fund Checking Account.

  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.

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 (for CI domestic imprest funds).

    2. Alternate cashier (for CI domestic imprest funds).

    3. HQ International Operations Cashier (for CI international imprest funds).

    4. International Operations Sub-Cashier (for CI international imprest funds).

    5. PAL Cashier (for PAL imprest fund).

    6. PAL Alternate Cashier (for PAL imprest fund).

    7. Director, Beckley Finance Center (for all imprest funds).

  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 this section.

  4. When there is a change in the personnel, the Special Agent in Charge or CI Director, International Operations 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. The BFC sends the original signed signature cards to the Special Agent in Charge or CI Director, International Operations.

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 or the CI Director, International Operations notifies BFC using the same procedures used in establishing the imprest fund checking account.

Funding an Imprest Fund

  1. For new imprest funds, the business unit's financial staff enters a commitment for the value of the fund through the Integrated Procurement System (IPS). Additionally, the imprest fund requesting official sends a memorandum requesting funds to BFC, Miscellaneous Programs Unit.

  2. For established imprest funds, the business unit financial staff enters a commitment for the cumulative value of all funds through IPS at the beginning of each fiscal year.

  3. BFC transmits the funds via Electronic Funds Transfer (EFT) to the authorized financial institution checking account after the Director, BFC approves the request(s).

Increases and/or Decreases to an Investigative Imprest Fund

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

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

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 1.35.18.15.5.2, Unannounced Cash Audits, for the audit process.

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. When 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 CI Special Agent in Charge or the CI Director International Operations 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 1.35.18.15.5.5, Audit Process, for additional information.

Unplanned Cashier Absence

  1. Formal transfer of accountability is not required if the principal cashier's unplanned absence is less than 15 consecutive workdays. The amount of transfer must still be verified, but can be informally transferred. The informal transfer documentation must be prepared and signed (or acknowledged electronically) by either the principal or alternate cashiers with the approval of the Special Agent in Charge/CI Director, International Operations.

  2. If the unplanned absence extends beyond 15 consecutive workdays or the cashier is not returning, the Special Agent in Charge/CI Director, International Operations must formally transfer the accountability. See 1.35.18.13.1, Planned Cashier Absences and Transfer of Accountability, for the procedures.

  3. An independent audit of the investigative imprest fund is required. This audit does not substitute for a quarterly unannounced audit. See 1.35.18.15.5.5, Audit Process, for additional information.

  4. 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.

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/CI Director, International Operations 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.

Cashier Responsibilities

  1. Cashiers are responsible for the accountability of the cash advanced to them at all times. This includes the accountability of the cash maintained in financial institutions or in approved cash storage locations. Appointment to any of these positions must be documented in writing and approval establishes the cashier as a an accountable official for the IRS.

  2. CI Cashiers, Headquarters International Operations Cashiers, and International Operations Sub-Cashiers are also responsible for ensuring that all disbursements are properly certified only for authorized expenses.

  3. Cashiers are responsible for providing monthly accountability of bank balances and authorized expenses through their organizational managers identified in IRM 1.35.18.9.1, Imprest Funds Requesting Officials, and to the BFC Miscellaneous Programs Unit.

  4. Only CI accountable officials are allowed to make disbursements from imprest funds. The following subsections of IRM 1.35.18.14 are provided to assist CI accountable officials in maintaining accurate accountability of their assigned imprest funds.

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. As soon as the expenditures for which the funds were advanced are complete, the special agent follows CI 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."

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:

    1. IRM 9.4.8, Undercover Operations.

    2. IRM 9.11.1, Fiscal and Budgetary Matters.

    3. 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, or advances, 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 1.35.18.14.4, Security Deposits, for additional information.

Income from Operations

  1. There are two typical sources for income earned on investigative imprest funds. They are:

    1. Authorized churning.

    2. Financial institution earned interest.

Authorized Churning
  1. Only the proceeds from a churning undercover operation may be used to offset the expenses of the operation. 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.

  2. 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 Treasury General Fund as miscellaneous receipts.

  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: Miscellaneous Programs Unit
    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.

Earned Interest
  1. There are instances when interest can be earned from imprest funds maintained within an authorized financial institution. Monthly, the cashier will remit all earned interest to BFC for deposit to the Treasury General Fund.

  2. The cashier sends a check for the amount of the earned 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

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 following CI internal approval 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 with a transmittal memorandum including 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 Treasury 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.

Monthly Reconciliation and Reporting

  1. At the end of every month, the cashier must reconcile the imprest fund and prepare 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.

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. The BFC reviews the reimbursement voucher and the Director, BFC approves the request for replenishment. The BFC then transmits the funds via EFT to the checking account at the financial institution.

Imprest Fund Internal Controls

  1. There are many internal controls regarding the protection of cash held outside of the Treasury. IRS imprest funds fall into the following categories:

    1. Physical security.

    2. Authorizations

    3. Separation of duties.

    4. Validations.

    5. Audits and independent reviews.

Physical Security

  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 without 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.

Authorizations

  1. The accountability for each investigative imprest fund is vested with each 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 employee requesting an advance of funds must have proper identification and authorization before the cashier disburses funds from the investigative imprest fund.

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

Separation of Duties

  1. 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.

Validations

  1. The Special Agent in Charge, Criminal Investigation Director, International Operations, 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.

Audits and Independent Reviews

  1. Each imprest fund has several types of audits and reviews that can be accomplished to validate the fund balance, documentation, and the physical security of the fund.

    1. Imprest funds that are entirely maintained within authorized financial institutions are validated monthly through the submission of monthly bank statements and the CI Imprest Fund Computer program reconciliation of monthly expenses. These are validated by CI and BFC validating expenses and ensuring each imprest fund is in balance with fund authorizations. The SB/SE PAL Program Manager also ensures that all funds are accounted for monthly for the PAL imprest fund.

    2. Imprest funds that have been granted authorization to conduct cash operations must be physically inspected quarterly by an independent team conducting an unannounced cash audit.

    3. All imprest funds also go through a complete audit/validation any time there is a transfer of accountability.

  2. Additionally, any imprest fund can be inspected at any time by an independent review team.

Monthly Audits
  1. All cashiers operating imprest funds in an authorized financial institution must validate both the monthly bank statement and the monthly expenses as identified in 1.35.18.13.5. Monthly Reconciliation and Reporting. These monthly audits include a review by the appropriate business unit official in addition to a review by BFC. This dual-layered audit review helps to ensure that imprest funds are being operated within authorized limitations and that expenses are authorized and approved.

Unannounced Cash Audits
  1. Unannounced audits of investigative imprest funds utilizing cash held outside of financial institutions 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 is to validate the fund balance, the actual composition of the fund, all authorizing/expense documentation, and inspect the physical security of the funds.

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

Transfer of Accountability Audits
  1. Any time a cashier must transfer imprest fund accountability to another cashier, a full audit must be conducted by the outgoing and incoming cashiers as identified in 1.35.18.12(1)-(3), Changes in Cashiers. This audit helps to validate and remove the accountability from the outgoing cashier while assigning that accountability to the new cashier.

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.

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.

    6. Access to any cash held outside of designated financial institutions (in approved storage facility) including a copy of the cash operations approval letter from BFC.

  4. The auditing employees must provide the audit report with original signatures to the Special Agent in Charge or CI Director, International Operations, 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 and three months after the period covered by the report.

Imprest Fund Losses

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

  2. The Special Agent in Charge or CI Director, International Operations 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/or 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.

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 or CI Director, International Operations 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 or CI Director, International Operations 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 CI will take immediate action(s) necessary to ensure the cashier is granted relief and reimbursed for the full amount paid.

Debt Collection

  1. The BFC is responsible for managing the account receivables for administrative debts. After receipt of the Special Agent in Charge or CI Director, International Operations 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, IRS mails a demand letter through the United States Postal Service, by first-class postage, to the cashier. The demand letter 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 date of the letter.

    4. The opportunity to repay the debt in full.

    5. The repayment options available to the debtor, if the debt cannot be paid in full.

    6. Instructions for submitting a financial hardship request.

    7. The address where to submit the payment.

    8. An IRS point of contact regarding the debt.

    9. The IRS policies regarding the assessment of interest, administrative charges, and penalties.

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

    11. The debtor's process rights.

  3. Information on administrative debt policy is located in IRM 1.35.7 Debt Collection.

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, FMP Office, 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.

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 CI Director, International Operations or the Special Agent in Charge determines whether or not the cashier has been negligent in the performance of 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 imprest funds.

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

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

    5. Unauthorized or improperly documented transactions.

    6. Unexplained disappearance or shortage of imprest funds.

Requesting Relief

  1. A cashier may request relief from repaying a loss in the 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/CI Director, International Operations.

  2. The CI Director, International Operations or 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 Associate CFO for Financial Management.

  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 IRS appropriation(s).

Fiscal Year-end Accounting

  1. The Associate CFO, Financial Management, Financial Reports Office records a commitment (estimate) for anticipated confidential expenditures, which are obligated from investigative imprest funds. Obligations should be recorded by office, financial plan, activity, and sub-object class and should remain as an obligation until either liquidated via payment or deobligated.

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 or the CI Director, International Operations 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 1.35.18.15.5.5, Audit Process, for additional information.

  4. The Special Agent in Charge/CI Director, International Operations must resolve all investigative imprest fund losses before the investigative imprest fund is closed. See IRM 1.35.18.16, 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.