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Policies and Procedures

Policy 306 – Imprest Checking (Bank) Accounts

Effective
June 1, 2003
Last Updated
July 25, 2016
Last Reviewed
September 24, 2015
Responsible University Officer
University Controller
Responsible Unit
Accounting Services

Policy Statement

An imprest checking account is established at a commercial financial institution and is often used like a revolving loan. For example, start-up costs or payments to subjects participating in a research study might be paid through an imprest checking account, which would then be reimbursed from the Office of Sponsored Research or other appropriate funds. The initial funding for an imprest checking account is from the University's unrestricted endowment income pool and must be returned to the pool when the imprest checking account is closed.

The imprest checking accounts are authorized and established when timing of disbursements is sensitive and critical to management objectives.

Restrictions on Use

Under no circumstances should imprest funds be used for the following:

  • making stipend payments
  • making payments for personal services
  • payment to vendors
  • loans and advances to employees

There should be no deposits to the account other than account replenishment checks or checks issued for increasing the imprest bank balance.

Bank Account Balances

The balance in an imprest checking account should equal approximately two months’ operating cash needs (i.e., two months’ average expenditures and charges). Departments should periodically review activity and the balance in each imprest account to determine if the account is funded appropriately, and make changes accordingly. Any imprest bank account that becomes inactive should be closed in a timely manner.

Account Replenishment

At a minimum, imprest checking accounts should be replenished monthly. If replenishment is needed more or less often, the balance in the account may not be in keeping with the purpose of the account.

Account Overdrafts
The department is responsible for maintaining a positive cash balance in the account. An overdrawn imprest account will be charged all applicable overdraft fees for each day the account is overdrawn. Frequent overdrafts are grounds for closing the account.

Documentation

Departments are required to maintain supporting documentation for each disbursement, including proper authorization for the disbursement, in accordance with University record retention policies.

Reconciliation and Check Retention

Departments are required to perform monthly reconciliation of the imprest checking account to the fund source in ConnectCarolina, and reconcile the checkbook to the bank statement. The bank reconciliation should include the following controls:

  • Identifying, resolving and clearing reconciling items.
  • Notifying Cash Management in Accounting Services of any unauthorized activity.
  • Evidence of supervisor review and sign off on the reconciliation.
  • Assigning the duties of writing checks and reconciling the imprest account to two different individuals.
  • Documenting any communications or discussions with the bank employee regarding the account.

Voided Checks and Bank Charges

Departments will retain voided checks with their monthly bank statement.

Bank charges may include those for printing checks and deposit slips.

Interest credits, monthly service charges or other charges should not appear on the statement. If these charges appear, then it is the department's responsibility to contact Cash Management in Accounting Services by sending an email to cash_management@unc.edu.

Escheat of Checks

Outstanding checks will have to be escheated (returned) to the State of North Carolina. The current escheat law requires checks issued and not presented to the bank for payment within the past one year (12 months preceding July 1 of that year) to be escheated. Outstanding checks may be escheated earlier if the University deems it necessary. Contact Cash Management or send an email to cash_management@unc.edu for forms and assistance in escheating checks to the State. The check payable to the State of North Carolina for escheats will not be recorded in the University accounting system.

Annual Confirmation

Accounting Services will request annual confirmation of the imprest checking account. A copy of the June 30 statement and the bank reconciliation for June, including a list of outstanding checks, is also to be submitted to Accounting Services.

General Imprest Checking Account

Student Accounts and University Receivables, Scholarships and Student Aid, Student Stores, Extension Division, Travel Services, Utilities Division of the Facilities Services Department, and others as appropriate, participate in a combined or general imprest checking account established with the State Treasurer. Schedules of checks, receipts and/or paid invoices should support reimbursement to the imprest funds. Accounting services is responsible for deposit and certification of the deposit to the State Treasurer and monthly reconciliation of the bank statements for these accounts.

Reason for Policy

To provide guidelines for managing imprest checking accounts, which are supported by a limited amount of University's unrestricted endowment income funds.

Exclusions

None

Special Situations

None

Procedures

  • 306.1 - Establishing an Imprest Checking (Bank) Account
  • 306.2 - Maintaining and Closing an Imprest Checking (Bank) Account

Additional Information

Frequently Asked Questions

Q: How do I properly void checks?
A: Write the word "void" across the payee line in large clear letters. Use an ink pen so that the markings will be impossible to remove and cannot be erased.

Related Data

None

Contacts

SUBJECT CONTACT TELEPHONE FAX E-MAIL
Imprest bank account Cash Management 919-962-1601 919-962-3306 cash_management@
unc.edu
Reimbursement of imprest checking account Disbursement Services 919-962-0748 919-962-2356 pettycash@unc.edu

History

Revised:
July 25, 2016: Updated contact info.
September 24, 2015: Updated language on ConnectCarolina system and processes.
July 16, 2014: Updated information on account overdrafts.
March 11, 2010