006.09.1 R1-19-4-806. Imprest Fund Accounts
AR ADC 006.09.1 R1-19-4-806Arkansas Administrative Code
Ark. Admin. Code 006.09.1 R1-19-4-806
006.09.1 R1-19-4-806. Imprest Fund Accounts
Authority
“Imprest” fund accounts may be established and maintained by State government agencies, boards, commissions and institutions. Authority to establish such accounts is authorized in ACA 19-4-806, ACA 19-4-1802 and 19-4-904 (d). Record keeping and documentation requirements of such accounts are prescribed by ACA 19-4-1108 and ACA 19-4-815. The authority to establish imprest accounts is vested in the Chief Fiscal Officer of the State. All requests to establish, increase or decrease the authorization of such accounts must be submitted on an “Imprest Fund Request” Form, P1-19-4-806.
Imprest fund accounts authorized for agencies, boards, commissions and institutions include:
Under no circumstances may imprest accounts be used to circumvent purchasing regulations or make payroll advances.
All cash and cash equivalents must be recorded on AASIS or the agency's original book of record.
If an agency has an internal audit function, each imprest fund account must be audited no less than each biennium. If the agency does not have an internal audit function, then each imprest fund account must be reviewed by management personnel on an annual basis. The review must include, at a minimum, tying the reconciliation balance to the amount reflected on the AASIS trial balance or the agency's original books of record and verifying that reconciling items are cleared within a two month period.
Purpose
A petty cash account is a small account that may be utilized to pay for minor expenses such as postage due, freight, etc. It should generally be used to pay for:
Establishment
If a Treasury Fund is used to establish a Petty Cash Fund, a warrant must be issued. When recording the warrant, expense code 5120010000 should be used. A journal entry must be made to reclassify this warrant from expense using a Non-Budget Relevant (NBR) general ledger account to the petty cash or imprest bank funds general ledger account. The journal entry would be as follows:
For petty cash held at agency
Debit 1010103000 Petty Cash
Credit 5080029000 NBR Other Expenses and Services
For petty cash held at a financial institution
Debit 1100002100 Imprest Bank Funds
Credit 5080029000 NBR Other Expenses and Services
If a commercial bank account is used to establish a Petty Cash Fund, the following entry will be made:
For petty cash held at agency
Debit 1010103000 Petty Cash
Credit 1100002000 Non-AASIS House Bank or the agencies AASIS House Bank
For petty cash held at a financial institution
Debit 1100002100 Imprest Bank Funds
Credit 1100002000 Non-AASIS House Bank or the agency's AASIS House Bank
Agencies that use AASIS to process checks and warrants will need an agency vendor number set up by the Department of Finance and Administration-Office of State Procurement (DFA-OSP). The title should include the agency name, agency employee “Custodian” and “Petty Cash.” More detailed instructions are located following the section on Travel Advance Revolving Fund.
If the petty cash funds are held at the agency, the general ledger account is 1010103000. If they are held at a financial institution, the general ledger account is 1100002100. In either case, the general ledger account should remain at the set amount unless the amount of the petty cash fund is changed. In the event that the established amount needs to be increased, petty cash should be debited and cash in bank credited if a commercial bank account is funding the petty cash increase.
Control
In order to properly control a petty cash system certain restrictions and regulations must be established and maintained. The minimum requirements include:
One person (Custodian) is to be responsible for the fund. This person must be appointed by the agency head or designee.
One person other than the Custodian shall authorize disbursements.
Petty cash vouchers shall be numbered with the prefix representing the fiscal year (such as FY03), a hyphen, and number beginning with 1 (one) each year and progressing upward, sequentially, until the end of the fiscal year.
The Custodian and the person, who authorizes the disbursement, must not have access to bank accounts, cash receipts and/or general accounting records.
Petty cash funds shall not be used to cash personal checks, make personal loans, or reimburse individuals for travel expenses.
Petty cash vouchers shall be reconciled monthly and internally audited.
Accounting for and Replenishing
Prior to making petty cash disbursement, a petty cash voucher must be completed and signed by the person responsible for authorizing the disbursement. The petty cash voucher used must contain, at a minimum, the following information:
• Petty cash voucher number
• Date
• Name of the person receiving the cash (expended by)
• Business area number
• Amount of the disbursement
• A description of the disbursement (purpose or product)
• The cost center code to be charged
• The general ledger codes to be charged
• The initials of the person approving the disbursement
• The initials of the person receiving the cash
• The signature of the person disbursing the funds.
A receipt, sales slip or other evidence of indebtedness must support all petty cash vouchers. See Appendix P2-19-4-806 to view a sample of an acceptable petty cash voucher. In the case of recurring items such as postage due, a summary sheet, P3-19-4-806, may be used in lieu of a petty cash voucher.
The petty cash voucher must be entered in an Imprest Account Journal, and the original copy shall be retained as documentation to replenish the fund. See Appendix P2-19-4-806 to view a sample petty cash journal. The petty cash replenishment postings are always made for the amount of actual expenditure from the fund, with the agency name, agency employee “Custodian” and “Petty Cash” as payee on the warrant or check. Petty cash accounts will be replenished as needed and at the end of each fiscal year so that expenses for one year will not carry over to the following year.
At all times petty cash accounts must have a total of cash and/or expenditure receipts equal to the amount reflected at the trial balance level. Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time.
Moneys and transaction documents of petty cash accounts should in no way be combined with change fund accounts or cash receipts.
Purpose
An agency/institution that receives cash for sales or services will find it necessary to have a “Change Fund” account.
Establishment
If a Treasury Fund is used to establish a Change Fund, a warrant must be issued. When recording the warrant, expense code 5120010000 should be used. A journal entry must be made to reclassify this warrant from expense using a Non-Budget Relevant (NBR) general ledger account to the change fund general ledger account. The journal entry would be as follows:
For change fund established by Treasury Fund
Debit 1010102000 Change Funds
Credit 5080029000 NBR Other Expenses and Services
If a commercial bank account is used to establish a Change Fund, the following entry will be made:
For change fund established by commercial bank
Debit 1010102000 Change Funds
Credit 1100002000 Non-AASIS House Bank or the agency's AASIS House Bank
Control
The Change Fund should be small and must be maintained completely separate from any Petty Cash Fund accounts or cash receipts kept by the agency.
Good accounting practices require that the amount of the Change Fund is verified daily, and all overages and shortages are shown in the Imprest Account Journal.
Accounting for and Replenishing
No expenditures are to be made from the Change Fund.
On June 1, 20XX, the agency must reimburse any shortages by charging the appropriate expense.
Purpose
Some State agencies and institutions of higher learning have a need for an Activities Revolving Fund to cover the costs of travel expenses to out-of-town games, contests and events, including emergency purchases away from the immediate locale of the institution. The costs of lodging and commercial transportation should be “direct billed” when possible using the Arkansas Agency Travel Card. Limitations on advances are governed by R1-19-4-1008 “Travel Advance Revolving Funds”. For those expenses not direct billed, an “Activities Revolving Fund” may be established and used to purchase goods or services such as:
• Commercial or chartered transportation for official staff and team/group members to and from out-of-town events/contests in which the school is participating;
• Meals and lodging for official staff and student participants while attending out-of-town events;
• Emergency medical services for official staff and participants injured in the course of school related activities;
• Emergency equipment repair or replacement costs;
• Out-of-town official recruitment expenses;
• Any goods or services which place human life or State property in jeopardy unless purchased immediately;
• Payments to students or others working in concession stands and selling tickets to events and to or on behalf of students and/or student athletes for meal allowances when they are required to be on campus during official institutional student holidays in accordance with institutional policy and NCAA regulations;
• Payment to officials and security guards for events;
• Payments to or on behalf of prospects for official expenses associated with a campus visit including travel, meals and entertainment expenses in accordance with institutional policy and NCAA regulations.
Establishment
Activities Revolving Fund accounts are to be applied for and maintained as cash funds on deposit with a financial institution with disbursements made in the form of a check, warrant or electronic deposit rather than cash (currency). The “Imprest Fund Request” Form must be used to request the establishment of an Activities Revolving Fund. The amount authorized for each Activities Revolving Fund will be determined by the particular needs of the agency/institution. The initial funds to establish the revolving fund are provided by the benefiting agency/department and must be charged to Commitment Item 02 (Operating Expenses). Another entry is required to reclassify the expense using a NBR general ledger account that will not restore appropriation and record the cash in the imprest fund. The entry is as follows:
Debit 1100002100 - Imprest Bank Funds
Credit 5080029000 - NBR Other Expenses & Services
Control
The administrative head of the agency/institution or his/her designated agent is responsible for approving all advances of funds and all expenditures from the fund established for the activities of each applicable department for student events. The minimum requirements include:
• One person (Custodian) is to be responsible for the fund.
• A person other than the Custodian shall authorize disbursements.
• The Custodian and person authorizing disbursement must not have access to bank accounts, cash receipts and/or general accounting records.
• Activities Revolving Funds are not to be used to cash personal checks or make personal loans.
• Revolving fund accounts should be reconciled monthly and internally audited.
• All issues from and receipts to the fund must be supported by signed documents that shall be retained until audited by the Division of Legislative Audit or an independent accounting firm.
Accounting for and Replenishing
Upon receipt of the warrant or check to establish the fund, the fund Custodian will cause a ledger to be established and maintained which reflects:
• The initial amount of the fund and date established;
• Each issue of funds indicating the date issued, issue document number and check number, individual receiving the funds and amount;
• Each receipt of reimbursement indicating the receipt number, individual making the reimbursement, date of reimbursement or receipt and amount;
• Balance of cash in bank.
The Custodian responsible for administering the fund must have on hand at all times either cash in bank and/or signed receipts for travel advances outstanding equal to the amount established for the fund. Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time. The ledger and supporting documentation as specified herein for all entries made thereon must be maintained in proper order for audit purposes. The persons who received advances will reimburse the Activities Revolving Fund through a deduction from their travel reimbursement (Submitted on Form TR-1).
PLEASE NOTE: Moneys or transaction documents of Activities Revolving Fund should in no way be combined with petty cash accounts, change fund accounts or cash receipts.
Purpose
A Travel Advance Revolving Fund is established to provide travel funds for employees who have no other means to pay for travel on official business in connection with their jobs. Travel advances are to be issued and repaid in accordance with R1-19-4-1008, “Travel Advance Revolving Funds”.
Establishment
Travel Advance Revolving Fund accounts are to be applied for and maintained as cash funds on deposit with a financial institution with disbursements made in the form of a check, warrant or electronic deposit rather than cash (currency). The “Imprest Fund Request” Form is used to request the establishment of a Travel Advance Revolving Fund. The initial funds to establish the revolving fund are provided by the benefiting agency/department and must be charged to Commitment Item 02 (Operating Expenses) and GL # 5120010000 (Imprest Fund Establishment).
A journal entry must be made to reclassify this warrant from expense to the travel advance general ledger account. The journal entry would be as follows:
Debit 1100002100 Imprest Bank Funds
Credit 5080029000 NBR Other Expenses & Services
The general ledger account 1100002100 should remain at the set amount unless the set amount of the Travel Advance Fund changes.
Control
The administrative head of the agency/institution or his/her designated agent is responsible for approving all advances of funds and all expenditures from the fund. The minimum requirements for administering the fund include:
• One person (Custodian) is to be responsible for the fund.
• A person other than the Custodian shall authorize disbursements.
• The Custodian and person authorizing disbursement must not have access to bank accounts, cash receipts and/or general accounting records.
• Travel Advance Revolving Funds are not to be used to cash personal checks or make personal loans.
• Revolving fund accounts should be reconciled periodically and internally audited.
Accounting for and Replenishing
Upon receipt of the warrant or check to establish the fund, the fund Custodian will cause a ledger to be established and maintained which reflects:
• The initial amount of the fund and date established;
• Each issue of funds indicating the date issued, issue document number and check/warrant number, individual receiving the funds and amount;
• Each receipt of a warrant/check indicating the warrant/check number, individual for whom the warrant/check was issued, date of warrant/check and amount;
• Balance of cash in bank.
The Custodian responsible for administering the fund must have on hand at all times either cash in bank and/or signed receipts for travel advances outstanding equal to the amount established for the fund. Issues from and reimbursements to the fund will be subject to audit or inspection by the Department of Finance and Administration and the Division of Legislative Audit at any time. The ledger and supporting documentation as specified herein for all entries made thereon must be maintained in proper order for audit purposes. Replenishment will be accomplished when the employee to whom funds were advanced repays travel advances through a deduction from their travel reimbursement (submitted on Form TR-1). The replenishment in the form of a warrant/check will be payable to the travel advance fund.
Moneys or transaction documents of the Travel Advance Revolving Fund should in no way be combined with petty cash accounts, change fund accounts or cash receipts. A vendor number must be assigned to the custodian of the petty cash accounts. It must be a vendor number created by DFA-Office of State Procurement (DFA-OSP). Questions should be sent to DFA-OSP.
To establish a vendor number, use the following link: https://www.ark.org/dfa/osp/aasis_forms/vendor_maintenance_form_f10021.html.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.09.1 R1-19-4-806, AR ADC 006.09.1 R1-19-4-806
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