FAR 13.305-2—Agency responsibilities.
Plain-English Summary
FAR 13.305-2 explains the agency-level controls that must exist when an agency uses imprest funds or third-party draft accounts for small purchases. It covers four main subjects: periodic review of whether each fund or account is still needed, ensuring balances do not exceed actual needs, promptly adjusting funding levels when circumstances change, and issuing implementing regulations. Those regulations must address who is authorized to make purchases and how purchases are documented, including proof of receipt and acceptance by the Government, proof that suppliers received cash or third-party draft payments, and records of cash advances and reimbursements. In practice, this section is about internal control and accountability: agencies must prevent idle or excessive cash, reduce misuse risk, and create an audit trail for every transaction. For contractors and suppliers, the practical effect is that payment and receipt records must be clear, timely, and supportable. For contracting personnel, it means agency procedures must be written, current, and actually followed, not just published.
Key Rules
Review fund necessity regularly
Each agency must periodically review every imprest fund and third-party draft account to determine whether it is still needed. The agency must also confirm that the amount held in each fund or account does not exceed actual operational needs.
Adjust balances promptly
When circumstances change, the agency must take prompt action to reduce or otherwise adjust imprest funds and third-party draft accounts to a level that matches demonstrated need. This prevents excess cash or unused account capacity from remaining in place.
Issue implementing regulations
Agencies must develop and issue their own procedures for using imprest funds and third-party drafts. These procedures are mandatory and must be tailored to the agency’s operations and controls.
Control who may purchase
Agency regulations must designate the personnel authorized to make purchases using imprest funds or third-party drafts. This limits use to approved individuals and supports accountability.
Document every purchase
Agency procedures must require documentation of purchases made with imprest funds or third-party drafts. The documentation must support receipt and acceptance by the Government, supplier receipt of cash or draft payment, and any cash advances or reimbursements.
Responsibilities
Agency
Periodically review all imprest funds and third-party draft accounts, determine whether each is still needed, ensure balances are not excessive, and adjust funding levels promptly when warranted. The agency must also issue implementing regulations that establish purchase authorization and documentation procedures.
Contracting Officer / Agency Acquisition Officials
Ensure the agency’s local procedures are in place and followed, and that use of imprest funds or third-party drafts is controlled through authorized personnel and proper documentation. They should monitor compliance and correct weaknesses in internal controls.
Authorized Purchasers / Designated Personnel
Make purchases only when authorized under agency procedures and maintain the required documentation for each transaction, including evidence of receipt and acceptance, payment to suppliers, and any cash advance or reimbursement records.
Suppliers
Provide evidence of receipt of cash or third-party draft payments when payment is made through those methods, and support the transaction record as required by the agency’s procedures.
Practical Implications
Agencies cannot leave imprest funds or third-party draft accounts on autopilot; they must actively manage them and reduce balances when demand drops.
The documentation requirement is critical for auditability, so missing receipts, acceptance records, or proof of payment can create compliance problems quickly.
Authorization controls matter because only designated personnel may use these payment methods; informal or ad hoc use is a common weakness.
This section is mainly about internal agency control, but contractors and suppliers may still be affected by the need to provide clear proof of payment and receipt.
If agency procedures are outdated or incomplete, the agency is not meeting this requirement even if the funds themselves are being used for legitimate purchases.
Official Regulatory Text
Each agency using imprest funds and third party drafts shall- (a) Periodically review and determine whether there is a continuing need for each fund or third party draft account established, and that amounts of those funds or accounts are not in excess of actual needs; (b) Take prompt action to have imprest funds or third party draft accounts adjusted to a level commensurate with demonstrated needs whenever circumstances warrant such action; and (c) Develop and issue appropriate implementing regulations. These regulations shall include (but are not limited to) procedures covering- (1) Designation of personnel authorized to make purchases using imprest funds or third party drafts; and (2) Documentation of purchases using imprest funds or third party drafts, including documentation of- (i) Receipt and acceptance of supplies and services by the Government; (ii) Receipt of cash or third party draft payments by the suppliers; and (iii) Cash advances and reimbursements.