FAR 13.305—Imprest funds and third party drafts.

General.

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.

Agency responsibilities.

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.

Conditions for use.

FAR 13.305-3 sets the conditions under which imprest funds and third-party drafts may be used for purchases under simplified acquisition procedures. It addresses four core topics: dollar thresholds for imprest fund transactions, dollar thresholds for third-party draft transactions, the requirement that use be advantageous to the Government, and compliance with any additional agency conditions plus the policies and regulations referenced in FAR 13.305-1. In practice, this section limits these payment methods to relatively small purchases and requires the contracting activity to justify their use as a practical, efficient payment approach. The rule matters because it ties payment method selection to both fiscal controls and agency-specific policy, helping prevent misuse of cash-like instruments and ensuring the Government uses the most appropriate payment mechanism for the transaction. Contractors and contracting personnel should treat this as a gatekeeping provision: if any condition is not met, these methods should not be used.

Procedures.

FAR 13.305-4 explains the operating procedures for purchases made with imprest funds or third party drafts. It covers the required purchase authorization or funding verification before the buy is made, the normal practice of placing orders orally without competition when prices are reasonable, the fact that contract clauses are generally unnecessary because ordering and delivery happen almost simultaneously, when a written purchase order may still be used, how that order must be marked if used, and the post-purchase documentation that the authorized buyer must provide to the cashier and obtain from the supplier. In practice, this section is designed to keep very small, immediate purchases fast and simple while still preserving basic fiscal control, auditability, and proof of what was bought, from whom, and at what price. It matters because it balances speed with accountability: agencies can meet urgent, low-dollar needs without full formal contracting procedures, but they still must document funds availability, the transaction, and the supplier’s sales information. Contractors and suppliers should understand that these purchases may be made quickly and informally, but they still need to provide proper sales documentation when requested and may be asked to support discounts or tax-exempt treatment through a written order.