FAR 13.305-1—General.
Plain-English Summary
FAR 13.305-1 explains when and how imprest funds and third-party drafts may be used in simplified acquisition. It covers two main subjects: first, that these payment methods may be used to acquire and pay for supplies or services; and second, that the detailed rules for establishing, accounting for, and administering them are found outside the FAR in Treasury and GAO guidance and in agency implementing regulations. The section also points agencies to the Treasury Financial Manual, Title 7 of the GAO Policy and Procedures Manual for Guidance of Federal Agencies, and the Manual of Procedures and Instructions for Cashiers issued by the Financial Management Service. In practice, this means the FAR authorizes the payment methods at a high level but leaves the operational controls, cashier responsibilities, and accounting procedures to financial management rules. For contracting officers and agency personnel, the key significance is that use of these methods is not free-form; it must follow the applicable fiscal controls, cashier procedures, and agency-specific instructions. For contractors, the practical effect is that payment may be made through these special mechanisms only when the agency has properly established and is authorized to use them.
Key Rules
Imprest funds allowed
Imprest funds may be used to acquire and pay for supplies or services. This gives agencies a small-cash payment option for certain purchases when permitted by applicable fiscal rules.
Third-party drafts allowed
Third-party drafts may also be used to acquire and pay for supplies or services. Their use is subject to the same general limitation that the payment method must be authorized and properly administered.
Treasury and GAO rules control
The detailed policies for establishing and accounting for imprest funds and third-party drafts are not in this FAR section. Agencies must follow Part IV of the Treasury Financial Manual, Title 7 of the GAO Policy and Procedures Manual, and agency implementing regulations.
Cashier duties are governed elsewhere
Responsibilities of designated cashiers and alternates are addressed in the external financial management guidance, not in this FAR text. Agencies must ensure those personnel follow the required controls and procedures.
Agency procedures still apply
Each agency must apply its own implementing regulations in addition to the Treasury and GAO guidance. Agency-level instructions may add specific controls, approval steps, or accounting requirements.
Treasury cashier manual guidance
Agencies are also directed to the Manual of Procedures and Instructions for Cashiers issued by the Financial Management Service. This serves as additional operational guidance for handling cash-related procedures.
Responsibilities
Agency
Ensure any use of imprest funds or third-party drafts complies with Treasury guidance, GAO procedures, the Treasury cashier manual, and agency implementing regulations. Establish and maintain the required accounting and control procedures.
Designated Cashier
Handle imprest fund or draft transactions in accordance with the applicable Treasury, GAO, and agency procedures, including proper safeguarding, disbursement, and accounting for funds.
Alternate Cashier
Perform cashier duties only as authorized and follow the same controls and accounting requirements that apply to the designated cashier.
Contracting Officer / Acquisition Personnel
Use these payment methods only when permitted by agency policy and applicable fiscal rules, and coordinate with finance personnel to ensure the method is properly authorized and administered.
Treasury / Financial Management Service
Provide the governing manuals and procedures that agencies must follow for cashier operations and related fund administration.
GAO / Agency Financial Policy Authorities
Provide the policy framework and implementing guidance that governs establishment, accounting, and control of imprest funds and third-party drafts.
Practical Implications
This section is an authorization, not a complete procedure manual. Users must look to Treasury, GAO, and agency guidance for the actual steps and controls.
A common pitfall is assuming the FAR alone is enough to set up or use an imprest fund or third-party draft; it is not.
Because cashier responsibilities are controlled elsewhere, agencies need clear designation, backup coverage, and accounting controls to avoid misuse or audit findings.
Contracting and finance staff should coordinate before using these payment methods so the purchase, payment, and recordkeeping requirements line up.
If agency procedures are outdated or inconsistent with Treasury guidance, the agency should resolve that before relying on imprest funds or third-party drafts.
Official Regulatory Text
Imprest funds and third party drafts may be used to acquire and to pay for supplies or services. Policies and regulations concerning the establishment of and accounting for imprest funds and third party drafts, including the responsibilities of designated cashiers and alternates, are contained in PartIV of the Treasury Financial Manual for Guidance of Departments and Agencies, Title 7 of the GAO Policy and Procedures Manual for Guidance of Federal Agencies, and the agency implementing regulations. Agencies also shall be guided by the Manual of Procedures and Instructions for Cashiers, issued by the Financial Management Service, Department of the Treasury.