Under the Debt Collection Improvement Act of 1996, P.L. 104-134, 110 Stat. 1321 (April 26, 1996) imprest funds may only be used when the electronic funds transfer (EFT) requirement is waived.

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 wavier criteria.

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 208.4, Waivers:

The IRS has one business unit that requires funds to support IRC law enforcement operations. Criminal Investigation serves as the law enforcement arm of the IRS and performs various undercover operations in support of its mission. Criminal Investigation establishes imprest funds to provide special agents with funding for ongoing covert operations.

See IRM 1.2.2.2.34, Delegation Order 1-44 (formally DO 187, Rev. 4), Investigative Imprest Funds and IRM 1.2.2.10.10, Delegation Order 9-10 (Rev 1), Authorization to Approve Confidential Expenditures, for the delegated authority relating to IRM 1.35.18, Financial Accounting, Imprest Funds.

This section provides roles and responsibilities for:

The Investigative Imprest Fund database is used by the Accounts Payable office to produce status reports on a monthly and quarterly basis. These reports include:

Program effectiveness is measured by processing and approving accurate authorizations, advances, and reimbursements, and evaluating the value received when confidential funds are expended.

Imprest fund controls are used to ensure the Investigative Imprest Fund is properly safeguarded, only for authorized purposes, maintained at an adequate level, and properly accounted for include:

The following terms and definitions apply to this program:

The following acronyms apply to this program:

31 CFR Part 202, Depositaries and Financial Agents of the Federal Government,

31 CFR Part 208, Management of Federal Agency Disbursements,

IRM 1.2.2.2.16, Delegation Order 1-18 (Rev. 2), Settlement of Accounts and Relief of Accountable Officers - Administrative Accounts,

IRM 1.2.2.10.10, Delegation Order 9-10, Authorization to Approve Confidential Expenditures,

IRM 1.15.4.8, Retiring Criminal Investigative (CI) and Grand Jury Case Files,

IRM 1.36.4, Administrative Accounting and Financial Management Reports, Administrative (Non-Tax) Debt Management,

IRM 9.4.8, Undercover Operations,

IRM 9.11.1, Fiscal and Budgetary Matters,

IRM 10.2.8, Incident Reporting,

Government Accountability Office (GAO), Principles of Federal Appropriations Law (aka the Red Book), 3d ed., 2016 rev., Ch. 9, GAO-06-382SP (Washington, D.C.: Mar. 2016)

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

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

CI is authorized to certify imprest fund disbursements for the enforcement of violations within the jurisdiction of CI. All investigative imprest fund disbursements are recorded and validated within the CI Imprest Fund computer program.

All CI investigative imprest fund cashiers balance their financial institution account statements and their disbursements, submitting copies to the Accounts Payable office, via the Miscellaneous Programs Unit monthly.

The international operations authorizations are maintained using the same investigative authorization procedures as CI domestic operations. Exceptions to these procedures are discussed in this subsection.

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

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

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, Accounts Payable.

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

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 the same responsibilities and duties as other International Operations cashiers.

The International Operations personnel scans and emails the copies of the checks and receipts monthly to the Special Investigative Techniques (SIT) Storefront Cover Agent (SFCA). Bank statements are emailed monthly to the HQ International Operations cashier.

After month-end reconciliation, the CI International Operations personnel sends the original receipts and original bank statements to the SIT SFCA.

The Director/Assistant Director, SIT is authorized, as requesting official, to create memorandums to establish or make changes. Reference IRM 1.35.18.3.2, OF 211, for a complete list of actions or situations that require a change memorandum.

The authorized requesting officials send a memorandum with an explanation of the impending action to the Director, Accounts Payable office, via the Miscellaneous Programs Unit address listed in IRM 1.35.18.1.3.3, Director, Accounts Payable.

The Accounts Payable office via the Miscellaneous Programs Unit prepares OF 211 for the signature of the Director, Accounts Payable. Once signed, OF 211 is returned to the imprest fund requesting official.

OF 211 is used whenever there is a need to:

The CI cashier is authorized to appoint sub-cashiers to conduct authorized IRS imprest operations.

The CI cashier is designated with Treasury Category B authority and is authorized to make disbursements and may also advance funds to a sub-cashier.

The CI 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.

The CI 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.

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, Accounts Payable, via the Miscellaneous Programs Unit address listed in IRM 1.35.18.1.3.3, Director, Accounts Payable:

The memorandum must be accompanied by:

The cashier establishes the checking account at a federally insured bank or credit union under the appropriate account name identified in IRM 1.35.18.5, Establishing an Imprest Fund Checking Account.

The financial institution's records must always reflect 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 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.

The following individuals must sign the signature cards:

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.

When there is a change in the personnel, the Director, SIT sends a memorandum with original signature cards, to address listed in IRM 1.35.18.1.3.3, Director, Accounts Payable.

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 Director, SIT notifies the Accounts Payable office via the Miscellaneous Programs Unit using the same procedures used in establishing the imprest fund checking account.

CI notifies the Accounts Payable office via the Miscellaneous Payables Unit whenever they wish to increase the amount of an investigative imprest fund. The Director, SIT prepares a memorandum for submission to the Director, Accounts Payable with a copy to the Director, Finance, who completes a shopping cart in PPS for increases. CI will coordinate increases or decreases with Finance.

The Accounts Payable and Government Payables and Funds Management units process requests for increases or decreases to an investigative imprest fund when the shopping cart reaches completed status in PPS.

Decreases require a transaction in Integrated Financial System (IFS) to decommit the funds.

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

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.

The Director, SIT must notify the Director, Accounts Payable via the Miscellaneous Programs Unit, by memorandum, in advance of the transfer, to request the designation of the new cashier. The Director/Assistant Director, Finance needs to be notified on any change to the Imprest Fund Cashier’s bank account or bank institution.

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.

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.

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 1.35.18.9.5.5, Audit Process.

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 Director, SIT.

If the unplanned absence extends beyond 15 consecutive workdays or the cashier is not returning, the Director, SIT must formally transfer the accountability. See IRM 1.35.18.7.1, Planned Cashier Absences and Transfer of Accountability, for the procedures.

An independent audit of the investigative imprest fund is required within 6 weeks of the cashier’s departure. This audit does not substitute for a quarterly unannounced audit. See IRM 1.35.18.9.5.5, Audit Process, for additional information.

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.

The designation of a cashier remains in effect until the date specified on OF 211. When a cashier leaves the IRS or otherwise ceases to perform duties as a cashier the Director, SIT promptly notifies the Director, Accounts Payable via the Miscellaneous Programs Unit preferably in advance, by memorandum. CI, Finance needs to be notified of the termination of the cashier.

The effective date the investigative imprest fund is closed or formally transferred to a new cashier must correspond with the revocation date on OF 211 for the outgoing cashier.

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 assigned SFCA in anticipation of an authorized expenditure. If the expenditure does not occur, the funds are returned to the cashier by check or money order made payable to ”CI Imprest Fund”.

Before advancing any funds, the cashier verifies:

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

As soon as the expenditures for which the funds were advanced are complete, the SFCA follows CI internal operating procedures to report all transactions to the cashier, with the appropriate receipts from the special agents who made authorized expenditures. Unused funds are returned to the cashier by check or money order made payable to “CI Imprest Fund”.

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.

For additional information on confidential and non-confidential expenditures, see:

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

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.

Expenses initially identified as unrecoverable, but subsequently recovered, are handled in the same manner as security deposits. See IRM 1.35.18.8.4, Security Deposits, for additional information.

There are generally two sources for income earned on investigative imprest funds:

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.

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 Government Payables and Funds Management via the Debt Collection Unit 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 Government Payables and Funds Management via the Debt Collection Unit 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 FY__ appropriation.”

In cases where an appropriation has expired, Government Payables and Funds Management via the Debt Collection Unit deposits the security deposit as a miscellaneous receipt in the Treasury General Fund.

The special agent must send all checks or money orders payable to the "IRS" with a transmittal memorandum to the address listed in IRM 1.35.18.1.3.4, Director, Government Payables and Funds Management.

See IRM 9.11.1, Fiscal and Budgetary Matters for more information.

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

The cashier sends the forms with the supporting documents to the *CFO BFC Invoice Link.

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

The cashier must prepare a reimbursement voucher to replenish the funds in the checking account to maintain the correct balance. The cashier submits the voucher with the monthly reconciliation forms to the *CFO BFC Invoice Link.

The Accounts Payable office via the Miscellaneous Payables Unit reviews the reimbursement voucher and processes the replenishment via EFT to the checking account at the financial institution.

The cashier retains exclusive control of all checks and record documentation in containers which meet the requirements of IRM 9.11.1.4.5.5.1, Investigative Imprest Fund Cashier Responsibilities.

Checks and record documentation must not be stored in:

Keys and combinations must be issued and accounted for in accordance with IRM 9.11.1.4.5.5.1, Investigative Imprest Fund Cashier Responsibilities.

The security container must always be locked and out of public view except when the cashier is making a transaction. The container must be locked whenever the cashier is absent, even if the absence is only momentary.

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.

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 imprest funds.

The accountability for each 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.

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

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

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.

The Director, SIT and the SIT program analyst reviews the fund level of each investigative imprest fund once a year to ensure it does not exceed actual needs.

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.

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

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

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 " IRS." The Director, SIT provides the cashier with a receipt for the re-payment amount and sends the check with an appropriate transmittal memorandum to the address listed in IRM 1.35.18.1.3.4, Director, Government Payables and Funds Management.

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

Government Payables and Funds Management via the Debt Collection Unit is responsible for managing the account receivables for administrative debts. After receipt of written report from the Director, SIT the Director, Government Payable and Funds Management, 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.

After the account receivable is established, IRS mails a demand letter through the U.S. Postal Service, by first-class postage, to the cashier. The demand letter contains all due process rights and the following information:

Information on administrative debt policy is located in IRM 1.36.4, Administrative Accounting and Financial Management Reports, Administrative (Non-Tax) Debt Management.

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.

Relief may be granted by:

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

Relief will not be granted in cases where the loss has occurred because of negligence on the part of the cashier. The Director, SIT determines whether 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 :

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.

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 Director, SIT.

The Director, SIT must send a memorandum requesting relief, regardless of the amount, to the address listed in IRM 1.35.18.1.3.4, Director, Government Payables and Funds Management.

The following documents must be attached to the memorandum:

The Director, Accounts Payable sends the request for relief with the attached documents to the Associate CFO for Financial Management.

If relief is granted to the cashier for all or part of the fund, Government Payables and Funds Management via the Debt Collection Unit restores the amount relieved to the investigative imprest fund by obligating it against IRS appropriation(s).