Imprest Expenditure Bank Account

An imprest expenditure bank account addresses one alternative for handling small dollar purchases.

An imprest expenditure bank account operates in the following way.

  • A separate bank account is established for the department for expenditures of $500 or less. Refer to the Administrative Procedure – Cash Receipts and Cash Disbursements.
  • A designated amount is deposited to this account by the Financial Services Department.
  • The department issues cheques from the account to pay for small expenditures.
  • To replenish the account, the department processes a petty cash reimbursement which also serves as the mechanism for recording the expenditures in the department’s accounts.

This section sets out considerations in determining whether an imprest expenditure bank account represents the best solution to the department’s needs and explains the following:

Is an Imprest Expenditure Bank Account the best solution?

Key Requirements

Ineligible Payments

Establish an Imprest Expenditure Bank Account

Departmental Procedures for Financial Control

Imprest Expenditure Bank Account Record

Imprest Expenditure Bank Account Reconciliation Report

Reimburse an Imprest Expenditure Bank Account

Change Account Signators for an Imprest Expenditure Bank Account

Increase the Amount of the Imprest Expenditure Bank Account

Close an Imprest Expenditure Bank Account

 

Is an Imprest Expenditure Bank Account the best solution?

Consider the following:
Necessary financial controls – Imprest expenditure bank accounts operate under reasonably exacting financial controls:

  • restricted access to unused cheques,
  • two signatures on all cheques,
  • maintenance of imprest expenditure bank account records,
  • monthly reconciliation of the bank statement to the accounting records, and
  • annual confirmation to the Financial Services Department of continuing need for the account and check of financial controls.

Alternatives – Consider other alternatives which have less burdensome administrative requirements from the department’s perspective:

  • Where small purchases do not exceed $100 each, use the department’s petty cash fund,
  • Expand the use of an existing imprest expenditure bank account within the department.

For more detailed information on recommended controls refer to the Recommended controls by Business Process – Imprest Bank Accounts.

An Interactive Control Questionnaire is available to help assess the effectiveness of your unit’s systems of internal control and to facilitate making changes that improve it.

Key Requirements

Departmental Responsibilities:

  • Assess whether an imprest expenditure bank account is the most efficient approach for small dollar purchases and, if so, determine the appropriate account balance.
  • Maintain appropriate financial controls over the account (see Departmental Procedures for Financial Control below)
  • Process reimbursements to the account on a timely basis to meet the department’s operating needs and the need to record expenses in the fiscal period in which they are incurred.
  • Upon request, confirm account details to the Financial Services Department.

Financial Services Department Responsibilities:

  • Approve the establishment of an imprest expenditure bank account where this is the best option for meeting the department’s needs
  • Make the necessary banking arrangements.
  • Communicate the required information for opening, maintaining and closing the account to the department.
  • Confirm on a regular basis the existence and need for the account

Approvals:

  • The request for an imprest expenditure bank account is approved by the Director, Chair, Dean or Head of the department.
  • The University’s Chief Financial Officer approves the establishment of the bank account.
  • The department establishes internal authorization procedures with respect to expenditures paid from the account. The cheques for these expenditures require two signatures: the custodian and one other person. Caution: Imprest cheques should never be pre-signed
  • The Request for Reimbursement Form and the Imprest Expenditure Bank Account Reconciliation Report are approved by a person who is at least one level of authority higher than the custodian.

Ineligible Payments

Do Not Use an Imprest Expenditure Bank Account for the following:

However, payments for personal services which are very small, non-routine and non-recurring (e.g. paying a student a nominal amount for a delivery) may be made when the department is reasonably certain that the individual will not receive more than $500 from the University in the calendar year.

Establish an Imprest Expenditure Bank Account

Departmental Procedures:

  • Submit a request in writing to the Financial Services Department, Banking Services, clarifying the following information:
    • purpose of the account and type of expenditures,
    • amount of bank balance required, i.e. the total expected monthly expenditures,
    • name of the intended custodian of the bank account, and
    • authorized cheque signators. It is recommended that a minimum of three persons be designated as signators, one of which is the custodian.

Financial Services Department Procedures:

  • Approve establishment of account where such an account is determined to be the best solution for the department’s needs,
  • Forward to the department a signature card to be signed by all signing officers,
  • Upon return of the signature card, establish a University accounting record for the new imprest expenditure bank account,
  • Communicate with the bank, and
  • Inform the department in writing of the amount, the bank account number, the initial supply of cheques and cheque order form.

Departmental Procedures for Financial Control

Security:

Ensure access to unused cheques is restricted. They should be kept in a secure location such as a locked drawer.

Authorizations:

  • Establish and appropriately communicate internal authorization for payments from the account.
  • Ensure each payment is supported by an original voucher, i.e. receipt or invoice.

Stop Payments:

If the custodian wishes a stop payment placed on a cheque, contact the banking desk of the Financial Services Department at 978-2146.

Stale-Dated Cheques:

A cheque is stale-dated six (6) months after the issue date and, generally, banks will not cash cheques beyond this period.

The issuing department should take the following action with respect to stale-dated cheques:

  • Record a cancellation in your Imprest Expenditure Bank Account Record.
  • If you have already requested reimbursement for this cheque, the next reimbursement request should reflect an adjustment which credits the account charged originally.

See Imprest Expenduture Bank Account Record below for more explanation

Depositing Funds:

Deposits to an imprest expenditure bank account may be made only by the Financial Services Department. A department should not deposit funds directly into this account.

Therefore, when a refund is received or cash is to be deposited to the imprest account it should be deposited with the Cashier, crediting the appropriation account charged with the original payment. See Deposits with the Cashier.

Avoiding Duplicate Payments:

When a cheque is issued, it is recommended that the cheque number be recorded on the paid invoice/voucher. This practice, as well as the practice of making payments only on the basis of original vouchers, helps guard against duplicate payments.

Required Records:

Annual Confirmation:

Once annually submit an Imprest Bank Account Reconciliation Report to:

Banking Services
Financial Services Department
215 Huron Street, 2nd Floor

Ensure that the confirmation portion at the bottom of the form is completed and signed.

The confirmation may be submitted at any time in the fiscal year.

Imprest Expenditure Bank Account Record

The Imprest Expenditure Bank Account Record records cheques issued and deposits made.

Here is an example of an Imprest Expenditure Bank Account Record [coming soon]

This record should include the following information:

  • Balance forward
  • Issued cheques:
    • record amounts as debits,
    • record cheque number, payee and issue date.
  • Cancelled cheques:
    • record as credits,
    • enter the date, reason for cancellation (e.g. stale-dated), cheque number.
    • Enter a “C” in the Cheque Cleared column of the original item.
  • Reimbursements requested:
    • recorded as credits
    • separately record each reimbursement requested and include the amount and date of request.
  • A column to indicate whether cheques have cleared the bank and reimbursements have been received by the bank.
  • A column to record the reimbursement request date for each payment. This links the payment to a reimbursement request and facilitates bank reconciliation and retrieval of original invoices if necessary.

Imprest Expenditure Bank Account Reconciliation Report

Bank Statement:

The account custodian will receive a monthly statement and cancelled cheques. Note : The bank mails these to the Financial Services Department before they are forwarded to the account custodian.

If a statement is not received contact:

Financial Services Department
215 Huron Street
2nd Floor
978-2140

Update Bank Account Record:

Upon receipt of the bank statement update the Imprest Expenditure Bank Account Record with a checkmark against each cheque which has cleared the bank, and each reimbursement which has been deposited.

Complete the Imprest Expenditure Bank Account Reconciliation Report. Go to the following link for Instructions to Complete this form [coming soon]

Reimburse an Imprest Expenditure Bank Account

The Imprest Expenditure Bank Account – Request for Reimbursement / Closure / Decrease form is available to facilitate reimbursement and processing in FIS by Departments.

To assist you in completing the form, there is the document Instructions for Completion: Imprest Expenditure Bank Account – Request for Reimbursement / Closure / Decrease form.

The department will then process the Imprest Bank Account Reimbursement in FIS.

An electronic approval is acceptable if the approver is on-line. If the approver is not on-line, then the Imprest Bank Account Reimbursement form should be signed.

The system-assigned document number should be written on screen print or paper form.

Change Account Signators for an Imprest Expenditure Bank Account

Department:

  • Contact the Financial Services Department to request a signature card:

Banking Services
Financial Services Department
215 Huron Street 2nd Floor

  • Complete and return the card to the same address.

Financial Services Department:

  • Reviews and prepares the communication to the bank.

Increase the Amount of the Imprest Expenditure Bank Account

Follow the procedures to establish an imprest expenditure bank account. Record the increase in the departmental Imprest Expenditure Bank Account Record after receiving confirmation of increase from the Financial Services Department.

Close an Imprest Expenditure Bank Account

Department:

As soon as all issued cheques have cleared the bank, advise the Financial Services Department in writing that the account is no longer required. Include the following in the communication:

  • A reimbursement request for expenses incurred but not yet reimbursed.
  • A cheque drawn on the Imprest Expenditure Bank Account for the balance in the account as per the department’s Imprest Expenditure Bank Account Record. Note: Account cannot be closed until all other cheques have cleared the bank.
  • Final Imprest Expenditure Bank Account Reconciliation Report.
  • All unused cheques.

Financial Services Department:

Review, approve, and communicate with the bank.

Last revision: March 11, 2011