7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

## Handbook 9.11 Fiscal and Personnel Matters Handbook Chapter 1 Fiscal and Budgetary Matters
### Contents [9.11] 1.1 Overview [9.11] 1.2 Central Financial Plan [9.11] 1.2.1 Director, Finance Division (Controller), Criminal Investigation [9.11] 1.2.1.1 Budget Formulation [9.11] 1.2.1.2 Financial Plan Development [9.11] 1.2.1.3 Financial Plan Execution [9.11] 1.2.1.4 Staffing Levels-- Graded Authorized Staffing Pattern [9.11] 1.2.2 Regional Controller [9.11] 1.2.3 CI District Responsibilities [9.11] 1.3 Incidental Investigative Expenditures [9.11] 1.3.1 Defining Incidental Expenditures [9.11] 1.3.2 Accounting For Incidental Expenditures [9.11] 1.4 Confidential Investigative Expenditures (Pre-Authorised) [9.11] 1.4.1 Pre-authorized Confidential Expenditures [9.11] 1.4.1.1 Confidential Expenditures for Informants (SOC 9101) [9.11] 1.4.1.2 Confidential Expenditures for Undercover Operation (SOC 9102) [9.11] 1.4.1.3 "Other" Confidential Expenditures (SOC 9103) [9.11] 1.4.1.4 Confidential Expenditures for Protection and Maintenance of Witnesses and Informants (SOC 9104) [9.11] 1.4.2 Authorization For Confidential Funds [9.11] 1.4.2.1 Requests For Authority To Establish Authorizations [9.11] 1.4.2.2 Requests for Authority to Establish Cover Document/Premise Authorization [9.11] 1.4.3 Approval Levels For Confidential Expendiure Authorizations [9.11] 1.4.4 Management Responsibilities For Confidential Expenditures [9.11] 1.4.4.1 Assistant Commissioner, CI [9.11] 1.4.4.2 Directors of Investigations [9.11] 1.4.4.3 District Directors [9.11] 1.4.4.4 Chiefs, CI [9.11] 1.4.5 Confidential Fund Report For The Region [9.11] 1.4.6 Investigative Imprest Fund For Confidential Expenditures [9.11] 1.4.6.1 Imprest Fund Level [9.11] 1.4.6.2 Advances From The Investigative Imprest Fund [9.11] 1.4.6.3 Accounting For Expenditures From The Investigative Imprest Fund [9.11] 1.4.6.3.1 Accounting For Payments To Informants [9.11] 1.4.6.4 Closing The Investigative Imprest Fund [9.11] 1.4.6.5 Guidelines For The Investigative Imprest Fund Cashier [9.11] 1.4.6.5.1 Investigative Imprest Fund Cashier Responsibilities Exhibit [9.11] 1-1 MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-2 Form 8561, Request For Recoverable/Confidential/Incidental/Seizure Funds Exhibit [9.11] 1-3 Form 8562, Request/Receipt For Advance From Investigative Imprest/Or Non-Recoverable Funds Exhibit [9.11] 1-4 Form 2507, Receipt For Money--Cashier Advance Fund Exhibit [9.11] 1-5 Standard Form 1164, Claim For Reimbursement For Expenditures On Official Business Exhibit [9.11] 1-6 Standard Form 1165, Receipt For Cash--Subvoucher Exhibit [9.11] 1-7 Managerial Control Plan for the Imprest Fund for Investigative Purposes Exhibit [9.11] 1-8 Authorization Ledger Balance Exhibit [9.11] 1-9 Accountability of Advances, Expenditures, and Funds Returned Exhibit [9.11] 1-10 Accounting For Use of Confidential Funds
### [9.11] 1.1 (04-26-1999) Overview
This chapter provides guidance on the fiscal and budget matters for Criminal Investigation (CI). The following will be discussed in this chapter: Central Financial Plan. Incidental Investigative Expenditures Confidential Investigative Expenditures (Pre-authorized)
### [9.11] 1.2 (04-26-1999) Central Financial Plan
Criminal Investigation operates under a centralized financial plan for all direct law enforcement expenses. The Assistant Commissioner (Criminal Investigation) is the financial plan manager and the Director, Finance Division, CI administers the plan and allocates the resources. Criminal Investigation is allocated a portion of the IRS total budget. CI also receives reimbursement from the Department of the Treasury, Department of Justice, State Department and other government agencies for joint and special operations. Regional Controllers receive funds to provide general support for CI on par with all other district functions. Each district and Service Center is responsible for effectively using budget allocations in accordance with all relevant guidelines.
### [9.11] 1.2.1 (04-26-1999) Director, Finance Division (Controller), Criminal Investigation
The Director, Finance Division is responsible for; Requesting and justifying resources (Budget Formulation). Distributing available resources to districts, service centers and Headquarter components (Financial Plan Development). Ensuring resources are effectively expended to accomplish CI program goals (Financial Plan Execution). Authorizing appropriate staffing levels. (Graded Authorized Staffing Pattern)
### [9.11] 1.2.1.1 (04-26-1999) Budget Formulation
The Director, Finance Division, and the Director, National CI Operations, develop budget initiatives to include in the IRS budget requests sent to the Department of the Treasury. Finance Division provides additional information as requested and monitors the progress of the initiatives through Treasury, Office of Management and Budget (OMB) and Congress.
### [9.11] 1.2.1.2 (04-26-1999) Financial Plan Development
Each year, the Director, Finance Division, requests financial plan requirements from the districts. These requirements are compared to the budget availability received from the Internal Revenue Service (IRS) Chief Financial Officer (CFO). Funds are then allocated to each district to cover as many of the requirements as possible.
### [9.11] 1.2.1.3 (04-26-1999) Financial Plan Execution
The CI Finance Division, Plan Execution Section monitors and reviews district and Headquarters expenditures to ensure appropriate use of resources. Financial Operating Guidelines are issued annually to assist districts in the most effective use of available resources. Staff provides advice and assistance to district offices. Reviews are conducted to compare overall resource use and financial plan availability. Some funds are allocated directly to the individual district offices. These include: Travel Training Overtime Cash Awards Various enforcement expenses to perform day-to-day operations. Other funds are provided to the districts to reimburse expenses that relate to specific projects. These include: High Intensive Drug Traffic Areas (HIDTA) Motor Fuel Excise Tax Organized Crime Drug Enforcement Task Force (OCDETF) Treasury Asset Forfeiture Fund (TAFF) Other expenses are controlled centrally and paid at the Headquarter Office level. These include: Salaries/Benefits (Full Time Equivalents, FTE) Purchase of automobiles and vans Investigative Equipment Confidential expenditures for Undercover Operations Antenna Lease Sites Relocation ADP Equipment
### [9.11] 1.2.1.4 (04-26-1999) Staffing Levels-- Graded Authorized Staffing Pattern
The Director, Finance Division, CI, is also responsible for the authorization of appropriate staffing levels. The Grade Authorized Staffing Pattern (GASP) report is the authorizing document for distribution of positions (by employment category and grade) to districts, service centers and national office. The GASP is issued each quarter and compares current staffing with authorized staffing levels. Written requests for changes in the GASP should be submitted for the approval of the Director Finance Division, CI. Approved changes will be reflected in the next quarter's GASP. Requests may be sent by mail, e-mail, or faxed to (202) 622-5201. A Direct Investigative Time (DIT) analysis is performed each April to determine the authorized percentage of GS-13 Field Special Agents for each district. District case level data is extracted from Criminal Investigation Management Information System (CIMIS) for the previous two (2) year period for analysis. All DIT hours worked are used in the analysis. The percentage of DIT worked on Investigation Level 13 is adjusted by ten percent (10%) to accommodate developmental assignments. The resulting Investigation Level 13 percentage becomes the authorized percentage of GS-13 Field Special Agents for the district; however, a GS-13 limit of sixty percent (60%) is currently in place. The number of GS-13 promotions per quarter is calculated by multiplying the number of Field Special Agents on-rolls by the authorized GS-13 percentage and subtracting the number of GS-13 Field Special Agents. Special agents assigned to Case Reviewer positions and those placed to accommodate Headquarters Office or trailing spouse needs are not counted in this calculation. Service Center staffing follows the recent Service Center Criminal Investigation Branch reorganization. Any requests to change staffing must have the approval of the Office of Tax Refund Fraud and be forwarded to the Director, Finance Division, CI, for final approval. Approved changes will be reflected in the next GASP.
### [9.11] 1.2.2 (04-26-1999) Regional Controller
The Regional Controller will treat CI as an equal partner among all other district functions for support. This includes providing: Space and Space Alterations Office Furniture Telephone service All normal daily administrative needs NOTE: For a complete list of those expenses that are to be provided by the CI centralized plan and the responsibilities of the Regional Controllers, refer to the Memorandum of Understanding between Assistant Commissioner, CI, Assistant Commissioner (Finance)/Controller, Assistant Commissioner, Human Resources & Support, and Chief Information Officer, effective October 1, 1993. (See Exhibit 9.11.1-1).
### [9.11] 1.2.3 (04-26-1999) CI District Responsibilities
CI districts are responsible to deliver CI program goals in accordance with all relevant guidelines and within allocated resources. Financial Operating Guidelines are issued annually by CI Finance Division, Chief Financial Officer, Regional Controllers and District Controllers. Additional guidance is found in the Part 1 of the Internal Revenue Manual at 1.6.1, Financial Codes.
### [9.11] 1.3 (04-26-1999) Incidental Investigative Expenditures
Incidental expenditures are minor expenses of a special agent. They are unexpected and generally do not reoccur in an investigation. Incidental expenditures are generally made without prior approval of a management official. Incidental expenditures are independent of Delegation Order No. 16 (as revised). Incidental expenditures are expenditures which fall into Sub-Object Class Code 2505 (SOC 2505) (see the Handbook in Part 1 of the IRM entitled Financial Management Codes Handbook): Incidental expenditures: May not total more than $75 (may be authorized to $125) on each occasion. May not exceed $125 in a calendar month without prior managerial approval. May not total more than $500 in any calendar month for one special agent. If a special agent is on travel status and incurs incidental expenditures for daily subsistence (surveillance activities, meeting with informants, etc.), he or she should claim reimbursement as an incidental expenditure and reduce his or her per diem as explained in the Travel Handbook of the IRM A special agent should use discretion in incurring incidental expenditures. Incidental expenditures will not be used instead of pre-authorized confidential expenditures, especially as it relates to payments to informants for information and other defined categories that require various levels of approval. For example, if a special agent meets an informant once a week about a narcotics project and incurs costs, this would not be considered incidental expenditures.
### [9.11] 1.3.1 (04-26-1999) Defining Incidental Expenditures
Incidental expenditures are defined as follows: Purchase of a cup of coffee, a sandwich, a drink, a meal, or other similar minor purchases for an informant when it is necessary for a special agent to meet the informant at an inconspicuous place in order to ensure security or to protect the identity of the informant. A special agent should also seek reimbursement for himself or herself as well as for the informant. Cost of copies of third-party records, such as county real estate records, whose purpose is determining and establishing tax liabilities or for investigation and enforcement activities. These would not include documents or research costs that are reimbursable under summons provisions. Tax Fraud Investigative Aides (TFIA's) may be reimbursed for this type of expenditure, but they are limited to this category of expenses. Cost of minor expenses related to surveillance activities, such as a drink or a meal to maintain one's cover. Other miscellaneous expenses to secure evidence that are not of a recurring nature. The term "evidence" is not restricted to that used or admissible in a court case. For example, a special agent may incur miscellaneous expenses related to the execution of a search warrant or purchase material at a tax shelter seminar.
### [9.11] 1.3.2 (04-26-1999) Accounting For Incidental Expenditures
A special agent is required to account for incidental expenditures and obtain reimbursement as follows: If prior written approval is not required, a special agent must notify his or her Group Manager in writing (routing slip or memo) and record in his or her diary on the date a brief description of the expense, amount expended, place, and persons present, including the assigned informant number or code name, if applicable. These memos will be maintained at the direction of the Chief, CI. Whenever possible, receipts should be obtained for items costing $75 or more and stapled in the diary. If not possible, an explanation of why a receipt was not obtained should be in the diary. Group Managers are expected to follow up and review a special agent's diary for the proper documentation. When a special agent determines that he or she will have incidental expenditures of more than $125 in a calendar month, or will have an incidental expense greater than $75 on a single occasion (example: drilling a safe deposit box during a search warrant execution may exceed $75), he or she will prepare a memorandum to the Chief, CI, stating expenditures spent to date, amount of possible additional expenses, reasons for the additional expenditures, and a request for authorization to spend funds at the approval level. The Chief, CI, may authorize incidental expenditures totaling no more than $125 per occasion with a maximum of $500 in any calendar month for each special agent. The Chief, CI, should maintain a photocopy of the approved authorizations exceeding $125 in a given month or $75 in a single incident. A special agent should claim reimbursement of incidental expenditures on his or her travel voucher by showing the date of expenditure, amount, and the following explanation: "Incidental Expenditures" . A special agent should not give any additional description or explanation of the incidental expenditure on the travel voucher, nor should related receipts or memoranda be attached.
### [9.11] 1.4 (04-26-1999) Confidential Investigative Expenditures (Pre-Authorised)
Confidential Expenditures allows special agents to purchase or acquire information and services that are necessary to complete a case. For example, special agents may: Pay cash to informants to gather information and evidence about the violation of federal statutes. Pay for meals and entertainment of an informant. Make cash payments when it is not possible for an informant to file a claim for payment. Use cash when it is necessary to protect or conceal the identity of the special agent or informant. Pay cash when immediate action is required to gather information and records. NOTE: In all situations, the agent must use good judgment and ensure that effective case development is served by the use of these funds. This includes reviewing information before payment is made. Expenditures must be approved by the correct official and follow the dollar limits set by the Commissioner. The district Chief is authorized to approve special agents' claims for reimbursement for authorized confidential expenditures through the imprest fund. The Director of Investigations and the Director, National Operations Division, are the approving officials for the regions and headquarters, respectively. The authorization to incur confidential expenditures requires identifying the location of the imprest fund being utilized. District employees will specify and use the imprest fund of the appropriate district office. Imprest funds located at regional offices or Headquarters will be specified and used only when employees concerned are performing duties for those offices. NOTE: In situations where an expenditure is not confidential and normal procurement procedures cannot be used, a disbursement may be made from the investigative imprest fund. Normal procurement procedures include the use of the travel voucher, IMPAC VISA card, requisitions, and district imprest funds. The Director, Finance Division, CI, has authorizing officials on staff who are authorized by the Assistant Commissioner (Procurement) to approve non-confidential purchases from the investigative imprest fund. These individuals must be contacted before any procurement may be authorized and they will provide record-keeping instructions. An authorization for confidential expenditures should not be used for this type of expenditure.
### [9.11] 1.4.1 (04-26-1999) Pre-authorized Confidential Expenditures
Pre-authorized confidential expenditures fall into one of the following categories and SOCs: Confidential Expenditures for Informants (SOC 9101). Confidential Expenditures for Undercover Operations (SOC 9102). "Other" Confidential Expenditures (SOC 9103). Confidential Expenditures for Protection and Maintenance of Witnesses and Informants (SOC 9104). (see the Handbook in Part 1 of the IRM entitled Financial Management Codes Handbook):
### [9.11] 1.4.1.1 (04-26-1999) Confidential Expenditures for Informants (SOC 9101)
Confidential Expenditures for Informants (SOC 9101) --Represents the cost of payments to informants for: Information. Assisting in an investigation which could save time and reduce costs. Services such as locating witnesses and assets which will result in obtaining essential information, testimony, or evidence relating to an investigation. Payments for assisting in apprehending fugitives. Costs incurred because of payments on behalf of an informant are also confidential expenditures. This includes payments instead of a direct payment, such as purchasing an airline ticket for an informant or similar expenditures and payments made to reimburse expenses of the informant for gathering information for the Service. This terminology is not intended to include such minor "courtesy" expenses that an investigator may pay when meeting an informant, payments to or for an informant in connection with an approved undercover operation, or expenses for protecting an informant whose identity has been compromised (see SOC 9104). SOC 9101 also does not include the cost of rewards to informants awarded in tax investigations, which are chargeable to SOC 1182. Reimbursement for confidential expenditures is claimed only through imprest funds for investigative purposes and not on travel vouchers.
### [9.11] 1.4.1.2 (04-26-1999) Confidential Expenditures for Undercover Operation (SOC 9102)
Confidential Expenditures for Undercover Operations (SOC 9102) --Represents the cost of all confidential expenditures incurred in connection with the undercover program, e.g.: Travel costs for undercover support team members; Cover document and premise expenses preliminary to an undercover operation; Payments to an informant incidental to an undercover operation; and Practical exercises relating to undercover training. It does not include travel and per diem incurred by agents outside of their undercover assignment. Reimbursement for confidential expenditures is claimed only through imprest funds for investigative purposes and not on travel vouchers. Case agent or management travel should not be included in expenses for the undercover operation unless the case agent or manager are part of the cover team.
### [9.11] 1.4.1.3 (04-26-1999) "Other" Confidential Expenditures (SOC 9103)
"Other" Confidential Expenditures (SOC 9103) --Represents expenditures not included in SOC 9101, 9102, or 9104. Other confidential expenditures may include the following types of expenditures: The cost of admission to race tracks and racing forms. The cost of surveillance facilities and related expenses for the conduct of investigations and the authorized gathering of information regarding individuals or authorized projects involving suspected violations of laws under the jurisdiction of CI (ex: includes money laundering; T31); the authorized gathering of information concerning the administration and enforcement of the laws under the jurisdiction of CI (ex: includes money laundering; T31). Confidential expenses incurred in locating certain witnesses. Reimbursement for confidential expenditures may be claimed only through imprest funds for investigative purposes and not on travel vouchers.
### [9.11] 1.4.1.4 (04-26-1999) Confidential Expenditures for Protection and Maintenance of Witnesses and Informants (SOC 9104)
Confidential Expenditures for Protection and Maintenance of Witnesses and Informants (SOC 9104) --Represents the cost of all confidential expenditures incurred in protecting and relocating an informant or witness (see IRM Handbook 9.6 Chapter 7 Section 7.6 and the IRM Financial Management Codes Handbook). Reimbursement for confidential expenditures may be claimed only through imprest funds for investigative purposes and not on travel vouchers.
### [9.11] 1.4.2 (04-26-1999) Authorization For Confidential Funds
Whenever authorized expenditures are necessary, the total expected cost will be determined to obtain authorization. Based upon the tentative cost, an authorization will be requested using the procedures and guidelines that follow. If later it is determined that additional funds are needed, a revised request must be made. An authorization may be established in the name of an investigation, a general investigation, an undercover operation, "other" confidential expenditures, or a protected witness. An authorization may not be established in the name of an informant except for a SOC 9104 authorization. An "investigation" is either an information item or an investigation that has been assigned a number per CIMIS. If a groups subject is under simultaneous investigation for one specific violation or several related violations, this should be treated as an investigation. A "general investigation" is one specific information gathering or project to determining compliance with laws enforced by IRS in a defined geographical area or in a defined group of taxpayers. The existence of a National Project does not authorize approval to pay for any confidential expenditures or information gathering activities. An authorization may be established at the regional or National Office to develop and maintain cover documents and premises or to authorize confidential expenditures necessary to conduct undercover training. A district may establish multiple General Investigations (GIs) for the same investigative purposes but involving distinctly different geographical areas. The districts may obtain authorizations to use separate funds for each GI established in a different geographical area. The number of GIs and approved authorizations in a district must be based on reasonable and prudent judgment. Multiple GIs in a single group's area or in a single geographical area, covered by multiple groups would not be warranted. GIs for areas involving posts of duty (POD's) not having a CI Group Manager will generally be considered too small. Confidential fund authorizations in regard to investigations and undercover operations are valid for the duration of the assignment. In instances of an undercover operation, funds may be expended through the due date of the undercover closing report. With the exception of cover documents, confidential fund authorizations for general investigations (GIs) are valid for the duration of the GI. Authorizations for cover documents are valid for the duration of the undercover agent's assignment.
### [9.11] 1.4.2.1 (04-26-1999) Requests For Authority To Establish Authorizations
Written requests for approval for an authorization for confidential expenditures should originate from a special agent and contain the following information (Exhibit 9.11.1-2, Form 8561, Request for Recoverable/Confidential/Incidental/Seizure Funds): The name of the case, project, or other identifying entry. The case or project number, when applicable. The sub-object code(s). The expiration date of the authorization. The location of the investigative imprest fund to be utilized. The reason or purpose for the expenditures. Other relevant information useful to the management officials who will approve the authorization. The specific amount to be authorized. If the original request is insufficient, the special agent should submit an amended request for the additional expenditures and obtain the same level of approvals as the original request. For requests requiring the approval of the Assistant Commissioner, CI, the Regional Commissioner will approve the initial $20,000 as well as concur with the request for the additional funds. Authorization requests requiring approval of either the Regional Commissioner or the Assistant Commissioner, CI, should also include the amount of imprest funds authorized by the District Director and total payments made to date. Authorization may be established based on oral approval in emergency situations. When oral approval is given at the above-authorized levels, the special agent must submit a follow-up written request (Form 8561 (Exhibit 9.11.1-2)) for authorization within 24 hours. In all requests, on all forms, and in other documentation, a special agent will refer to an informant by code name and/or number. None of the imprest fund files will include any information that would compromise the identity or confidentiality of the informant. The Chief, CI, is responsible for ensuring the security and confidentiality of any grand jury information received in relation to an authorization, including information for the grand jury from an informant. Grand jury information cannot be disclosed to Service personnel not assisting in the grand jury. See text located in IRM Handbook 9.5 Chapter 2. Confidential expenditures do not include normal travel and per diem expenses incurred by special agents. The only exceptions are: In the case of undercover operation expenditures; and The Chief, CI, may approve on a case-by-case basis confidential expenditures by a special agent when meeting with an informant.
### [9.11] 1.4.2.2 (04-26-1999) Requests for Authority to Establish Cover Document/Premise Authorization
If appropriate, the Chief, CI, may request authorization for confidential expenditures to pay costs incurred by contact agents and trained undercover agents in obtaining and maintaining cover documentation which is not associated with a specific undercover operation (SOC 9102). All requests for cover documentation expenditures must be approved by the Director of Investigations or the Assistant Commissioner, CI. For those requests exceeding $20,000, approval authority rests with the Assistant Commissioner, CI. Cover documentation expenditure authorizations may be approved for the duration of the general investigation. Authorized funding for this type of general investigation is cumulative. For example, the general investigation is originally approved for two (2) years with authorized funding (SOC 9102) of $15,000. At the end of two (2) years, the general investigation is extended for 18 months with additional funds (SOC 9102) of $6,000 being requested. The total authorization for this general investigation now becomes $21,000. Requests for this type of authorization should be made on Form 8561 (Exhibit 9.11.1-2)). All requests for cover premises (storefronts) must be approved by the Assistant Commissioner, CI. See LEM IX located in IRM Handbook 9.14.
### [9.11] 1.4.3 (04-26-1999) Approval Levels For Confidential Expendiure Authorizations
The following individuals can approve all types of imprest fund authorizations in regards to single assigned investigations, general investigations and protected witnesses: More than $20,000: the Assistant Commissioner, CI. $20,000 or less: the Directors of Investigations, CI, and the Director, National Operations Division. $10,000 or less: District Directors and the Chief, Office of Narcotics and Money Laundering. Authority is limited to payments to or on behalf of informants, witness protection, and "other" expenses. They may not authorize confidential expenses for undercover operations. $5,000 or less: The Chief, CI, and the Section Chief, Narcotics and Currency Crimes, may only authorize confidential expenditures for payments to or on behalf of informants or payments which fall into the "other" category. Authorizations sought on the same investigation or general investigation will be combined together to determine the proper approval level. For example, if a district had an authorization to spend "other" confidential funds in connection with a general investigation of $5,000, and it sought an additional amount of $17,000, the total authorization for this project would be $22,000, and, therefore, the operation would be classified as Group I (ee text 9.4.8.3.1)(see text 9.4.8.3.1) .
### [9.11] 1.4.4 (04-26-1999) Management Responsibilities For Confidential Expenditures
This section discusses the responsibilities of the Assistant Commissioner, Directors of Investigations, District Directors, and Chiefs, CI.
### [9.11] 1.4.4.1 (04-26-1999) Assistant Commissioner, CI
The Assistant Commissioner, CI --is responsible to review confidential expenditure activity during regularly scheduled National Office reviews to ensure compliance with Service policy and guidelines.
### [9.11] 1.4.4.2 (04-26-1999) Directors of Investigations
The Director of Investigations --is responsible for monitoring the overall program of expenditures made from investigative imprest funds in the regional and district offices. This will be accomplished through a vigorous program of evaluation and follow up to ensure that: Funds are used effectively and in a manner that is both lawful and consistent with the administration and enforcement of the laws enforceable by CI. Use of confidential expenditures is not abused, value is received when confidential funds are expended, and the effectiveness of confidential expenditures is periodically reviewed. Correct procedures and controls are being followed.
### [9.11] 1.4.4.3 (04-26-1999) District Directors
District Directors --are responsible to designate two independent employees with auditing experience or similar qualifications to perform quarterly, unannounced cash verifications or whenever there is a formal transfer of accountability due to a change in cashiers of the imprest fund. CI employees in districts, regions, and Headquarters should not be designated to perform the unannounced cash verifications. No information from the investigative imprest fund records will be disclosed which may breach the integrity of the confidential expenditures.
### [9.11] 1.4.4.4 (04-26-1999) Chiefs, CI
The Chief, CI --is responsible for: Supervising the imprest fund, including assisting, training, and directing the cashier in the performance of his or her duties and in the safeguarding of the fund and related records. Approving authorizations, advances, reimbursement vouchers, and attached receipts, and accountability of reports after reviewing them for proper approval levels, completeness, and timeliness. Requiring the employee's immediate supervisor or higher management officials to conduct administrative reviews of requests for advances and reimbursement vouchers prior to his or her own personal review and approval. Ensuring that cashiers maintain detailed records of authorizations, funds advanced to investigative officers, checking accounts, and expenditure documentation. Ensuring that accountability reports (SF 1129, Reimbursement Voucher, and SF 1164) are prepared, approved, and submitted: On the last workday of each month (minimum requirement). Whenever there is a change in the approval level of the amount of funds to be maintained. Whenever there is a change in cashiers, the SF 1129 must be signed by the incoming cashier and the outgoing cashier. Ensuring that the accountability reports, SF 1129's, with all attached SF 1164's, are mailed directly to Fiscal Management. Having the alternate cashier assume the imprest fund responsibilities in those instances in which the cashier has been designated Acting Chief, CI. Notifying Fiscal Management and/or the disbursing officer by memorandum to prepare Optional Form 211, Request for Change or Establishment of Imprest Fund, whenever there is a change in the imprest fund due to the following: Designation of principal or alternate cashier. Revocation of principal or alternate cashier's designation. Change from principal to alternate cashier, or vice versa, when absent or assigned to other duties for more than 15 workdays. Change in cashier's name or location. Increase or decrease in the amount of funds. Establishment of a new checking account, transferring an existing bank account to a different bank, or closing of a bank account due to termination of cashier or alternate cashier. Requesting a cash verification of the fund due to transfer of accountability between cashiers. Determining the geographical locations of investigative imprest funds within the district with the approval of the District Director and Regional Fiscal Management. Ensuring that the fund is maintained at the lowest practical level and reviewed regularly to be sure it does not exceed actual needs. Ensuring that all imprest fund cash, checks, and other items making up the fund will be retained under the exclusive control of the cashier in containers which meet the requirements of the IRM as found in the Managers Security Handbook. Security requirements for the type of storage facility will vary according to the amount of cash involved. Investigative imprest funds should not be intermingled with other funds, including private or unofficial funds, but will be kept separated in a locked cash box within the imprest fund storage container. Forms, records, and documentation relating to the imprest fund as well as the cash, checks, and non-cash items making up the fund should be under the exclusive control of the cashier with the same security requirements as noted above. Ensuring that keys and combinations are issued and accounted for in accordance with the IRM as found in the Managers Security Handbook. Combinations and/or keys to the lock on the imprest fund container and the cash box should be placed in a separate container in a signed, sealed, and dated envelope using Treasury Form 4032, Security Container Information, and maintained by Chief, CI; District Director; or Security Officer. The lock on the container should be changed at least once a year, or whenever there is a change in cashiers or transfer of accountability due to unforeseen extended absences of the cashier, or whenever the combination is compromised in any way. Alternate cashiers may have knowledge of the combination to the investigative imprest fund storage container when the fund is maintained in a checking account so that detailed records can be maintained when assuming the duties of the principal cashier in his or her unforeseen absence. An alternate cashier who maintains an advance from the cashier for purposes of advances must store it in a separate secure lock box within the imprest fund storage container. Keys and combinations must be limited to the cashier and/or alternate cashier. Following the procedures in the IRM, Imprest Funds Handbook, whenever the imprest fund duties are transferred, the alternate cashier may act on behalf of the principal cashier in the principal cashier's unforeseen absence of less than 15 consecutive days or during a period when no accountability report and/or reimbursement vouchers are due. Making formal transfer of the fund following IRM, Imprest Funds Handbook, when the foreseen absence of the principal cashier is more than 15 days or during a period when an accountability report and/or reimbursement vouchers are due. Taking actions to correct problem disclosed by unannounced cash verifications, local reviews, and audits conducted by Internal Audit and reviews conducted by the Director of Investigations and others who have oversight responsibilities. Submitting reports and taking corrective actions in case of loss or possible loss from the imprest funds following the IRM, Imprest Funds Handbook. Exhibit 9.11.1-7 is a mandatory control plan to assess the maintenance of the imprest fund for investigative purposes. It should be used by management and the imprest fund cashiers for the efficient and accurate operation of the investigative imprest fund. Personal goods purchased at governmental expense in connection with an official investigation but not consumed or otherwise disposed of in connection with the investigation are not to be appropriate to the private use of the purchaser but will be turned over to the Chief, CI, at such time as circumstances of the investigation permit. The Chief will transmit such goods to the Facilities Management office in the district for appropriate disposition. The transmittal memorandum will identify the goods and state how they were acquired.
### [9.11] 1.4.5 (04-26-1999) Confidential Fund Report For The Region
To assist the Chief, the District Director, and the Director of Investigations in the monitoring and controlling of confidential and nonconfidential expenditures, the cashier will prepare a Quarterly Accounting of Confidential Funds Authorization (Exhibit 9.11.1-10). The cashier will submit the report to the Chief by the close of business of the 5th workday following the end of the quarter. The Chief should forward the report to the Director of Investigations and a copy to the District Director by the 10th workday after the close of the quarter.
### [9.11] 1.4.6 (04-26-1999) Investigative Imprest Fund For Confidential Expenditures
With the approval of the District Director and Regional Fiscal Management Branch, the Chief, CI, may establish investigative imprest funds in different geographical locations in the district. For example, a major POD may spend substantial confidential funds, which require a separate investigative imprest fund in addition to the district headquarters imprest fund. Any additional investigative imprest funds which are established must be completely independent from any other investigative imprest fund. No secondary imprest funds can be established. Multiple imprest funds provide for immediate access to monies and serve to eliminate any "sub-cashier" problems.
### [9.11] 1.4.6.1 (04-26-1999) Imprest Fund Level
The Chief, CI, is responsible for determining the dollar size and any increase or decrease in an investigative imprest fund. Considerations, such as average usage in comparison to the dollar size of the fund, will not be the only factor to determine the dollar limitation of the imprest fund. The Chief, CI, is responsible to ensure that adequate funds are maintained to meet any reasonable need. At times, this may require funds on hand, which are many times greater than the average monthly usage. The Chief, CI, must consider the lead time to process the reimbursement voucher and the return of the replenishment check, including mail time. In addition, the Chief, CI, should recommend increases and decreases in the amount of maintained funds following the district's needs in relation to major investigations and projects in progress. When a determination is made that the amount of the investigative imprest fund should be increased, within the maximum amount authorized, the Chief responsible for the office in which the imprest fund is located will notify the Chief, Regional Fiscal Management Branch, by memorandum. See the IRM Imprest Funds Handbook, for instructions on this procedure. When a determination is made that the amount of the investigative imprest fund should be decreased, the Chief responsible for the office in which the imprest fund is located will notify the Chief, Regional Fiscal Management Branch, by memorandum. See the IRM Imprest Funds Handbook, for instructions on this procedure.
### [9.11] 1.4.6.2 (04-26-1999) Advances From The Investigative Imprest Fund
When an authorization has been approved, agents should obtain advances from the imprest fund. Requests for advance of funds must be made on Form 8562, Request/Receipt For Advance From Investigative Imprest Fund/Or Non-Recoverable Funds (Exhibit 9.11.1-3) and approved by the Group Manager and authorized by either the Branch Chief, Chief, CI, or District Director. An agent may spend no more than $500 in personal funds for "out-of-pocket" confidential expenditures for any approved authorization. When appropriate, the Chief, CI, may wish to personally make a confidential expenditure. In other instances, confidential expenditures may be made on behalf of the Chief, CI, such as a special agent purchasing beverage and food that the Chief may consume at a meeting with an informant. In these situations, if the Chief, CI, is personally making the request for an advance from the imprest fund, or a request is being made on behalf of the Chief, Form 8562 will be submitted to the District Director for approval and will detail the amount, nature, and purpose of the proposed expenditure. If the Chief wishes to personally make an expenditure or another CI employee desires to make a confidential expenditure on behalf of the Chief against an authorized fund without securing an advance from the imprest fund, he or she can only do so with the prior written approval of the District Director. The record of approval can be accomplished by memorandum that will be attached to the Standard Form (SF) 1164, Claim for Reimbursement for Expenditures on Official Business. In the case of an emergency, a request for an advance may be made through prescribed channels by telephone, telegraph, or teletype facsimile, or electronic mail. Proper personal identification and official written documentation are to be made in every case by both the sender and receiver of such communication. Form 8562 (as seen in Exhibit 9.11.1-3) also serves as a receipt for the advance of funds. The cashier or an alternate is the only individual who can make an advance of funds. The cashier(s) may not disburse more than the amount authorized by the Branch Chief, Chief, CI, or District Director, and cannot release money from the imprest fund without an approved copy of the authorization or written notification from the Chief, CI, or District Director, of an emergency approval. There are no subsidiary imprest funds except in undercover operations wherein the contact agent is allowed to receive advances from the imprest fund cashier and make advances to other special agents. A special agent may not receive an advance from the cashier and advance all or part of it to another special agent or group of special agents. Each special agent must submit a request for an advance and receive it individually from the cashier. Special agents will not use an advance for personal purposes. At any time, a special agent should be in a position to account for advances and able to return the unused funds. For example, a special agent should not deposit an advance into a personal bank account (except for conversion into currency) or combine it with any other official funds. A special agent must keep the advance(s) intact, readily available for use on official business. The cashier may transmit advances or make payments for expenses to special agents in POD's or geographical areas outside the location of the imprest fund by wire transfer, cashier's check, checks drawn on the imprest fund, or by courier. Such transmittals are not to be construed as establishing a subsidiary imprest fund. In such instances, the cashier is also responsible for securing proper signatures on Form 8562 (see Exhibit 9.11.1-3). Special agents should account for an advance as soon as possible after the expenditure(s) is made and return any excess funds. When a special agent returns all or part of the funds advanced in cash, the cashier will prepare and sign in duplicate Form 2507, Receipt for Money-Cashier Advance Fund (Exhibit 9.11.1-4), and forward the original to the special agent and retain the duplicate. Special agents may reimburse outstanding advances by means of a check that will serve as a receipt. Special agents may also deposit advances into their personal account for the purpose of returning advances to the cashier. The special agent should request an extension from the approving official when it is not practical to spend any portion of the advance by the end of the calendar month by including the following statement on the face of the SF 1164 (Exhibit 9.11.1-5). "Amount remaining outstanding in continuing authorized assignment $. Approved: Disapproved: Date: " The special agent will complete SF 1164 to account for expenditures made and request extensions of the outstanding balance from the Chief, CI, or the appropriate approving official. The special agent will complete SF 1164 by the 5th work-day after the close of the month, irrespective of when the advance was issued during the month. If the special agent spent none of the advance, he or she still must request an extension using SF 1164. The special agent must submit a separate SF 1164 for each authorization.
### [9.11] 1.4.6.3 (04-26-1999) Accounting For Expenditures From The Investigative Imprest Fund
To account for an advance, a special agent will prepare and submit an SF 1164, a memorandum of activity, and an itemization of the expenditures. The agent should attach to this itemization original receipts, bills, cashier's tape, and other documentation regarding the expenditures. A separate SF 1164 should be submitted for each authorization. If the Chief, CI, makes the confidential expenditure or another CI employee makes a confidential expenditure on behalf of the Chief, the SF 1164 will be approved by the District Director. The District Director is responsible for reviewing and monitoring confidential expenditures. Original receipts for items of $75 or more should be obtained. They should be dated, itemized as to services or supplies obtained, and show amount(s) spent. When the type of expenditure makes it impossible to obtain an original receipt, or only a duplicate or photocopy is available, a special agent will prepare a memorandum describing the expenditure, date, amount, and the reasons why a receipt was not obtained. If the receipt does not adequately describe the purchase, a special agent should prepare a similar memorandum and attach the receipt. Funds expended for security deposits may be treated as recoverable or non-recoverable funds, depending upon the certainty of their recovery. See text in IRM Handbook 9.4 Chapter 8 Section 8.16.4(5)h. On the front of the SF 1164, the special agent should show only the total amount claimed and describe it only as "Confidential Expenditures" . The special agent should also include a statement about the amount of advance to remain outstanding. The special agent is responsible for designating the correct sub-object class code (SOC's) and authorization number (Exhibit 9.11.1-5). The SF 1164 must be approved by the Chief, CI. At the option of the Chief, on the reverse of the SF 1164 under Item 6, Expenditures, the special agent should give a description by date of each expenditure. The total should match the amount claimed on the front side. The special agent should document the expenditure by attaching a receipt or memorandum if appropriate. The special agent should not disclose sensitive confidential information on the SF 1164 because the cashier forwards the original to Regional Fiscal Management Branch. The receipts and other documentation are retained by the Chief, CI, or cashier with an attached photocopy of the SF 1164.
### [9.11] 1.4.6.3.1 (04-26-1999) Accounting For Payments To Informants
CI employees must adhere to the following guidelines when involved in paying informants: When an informant will not furnish information without payment, a special agent should first advise the informant of Internal Revenue Service (IRS) reward procedures and the use of Form 211, Application for Reward for Original Information. If the informant does not wish to use these procedures, a special agent may find it necessary to purchase specific information. In these investigations, the agent should negotiate the value of the information and advise the informant that a tentative agreement for payment is subject to approval by higher authorities. Direct payments to informants should be made only after the information or evidence has been obtained and determined to be worthy of compensation, unless the payment is needed in order for the informant to pay expenses to obtain the information. The expense payment will not be outstanding for more than 30 calendar days and should be determined using a reasonable evaluation of its potential value compared to the estimated expenses required for the informant to obtain it. When making the evaluation, consideration should be given to whether: The information would not have been brought to our attention from other sources; the information has significant tax administration implications; the information has the potential of having probative value; and investigative time can be reduced. Each payment to an informant should be made by the paying special agent in the presence of another special agent acting as a witness. In appropriate situations, and with approval of the Chief, CI, the witness can be a revenue agent, or another federal or local law enforcement agent, who is involved in the same investigation with a special agent making the payment. In addition, if it is necessary and approved in advance by a Chief, CI, a special agent may pay an informant without a witness. For example, if a special agent and the informant are in a travel status and circumstances require a payment to the informant for expenses, a special agent may make the payment after obtaining the Chief's approval. However, a special agent must document the file in detail and the Chief, CI, should only give his advance approval in extraordinary situations. These payments should be made by cashier's check with the receipt copy in the informant's confidential file in the Chief's office. If the informant resides or relocates outside the special agent's work area, the Chief, CI, should request the district nearest to the informant's residence to make payment following proper procedures. For example, an informant may move to another district for security. To preclude the special agent from traveling and having substantial travel expenses, the Chief, CI, should request the nearest district to make the payment to the informant and obtain the necessary documentation. An informant may also be paid by check if this would be more convenient and not impair security. If an informant is paid by check, a separate receipt is not necessary. A special agent should obtain at the time of payment a signed receipt from the informant showing the date the information was received, the date of payment, and the amount of payment, preferably using Form 9832, Receipt of Cash (Exhibit 9.11.1-6). The informant should sign his or her fictitious name or code on the receipt. Both special agents should then sign the receipt and include the informant's designated number. If it is impossible to obtain a signed receipt at the time of payment, a special agent should properly document the file and obtain a receipt from the informant. The Chief, CI, must approve waivers and ensure that they were justified and properly documented. A special agent should not request an informant to sign a blank Form 9832. If a special agent reimburses an informant for expenses or other non-taxable payments (purchase of an illegal shelter, money laundering fees, etc.), he or she should also obtain a signed Form 9832 but note on it that the payment was made for paying expenses. The special agent should request and obtain, if possible, major receipts and other documentation from the informant such as airline tickets, hotel bills, etc. At a minimum, a special agent should document the file by requesting the informant to list the date, description, and amount of expenses incurred instead of reporting a lump-sum figure. In accounting for payment(s) to an informant, a special agent should submit to the Chief, CI, through channels a memorandum detailing the information received for which the payment was made, Form 9832 (Exhibit 9.11.1-6) and SF 1164 (Exhibit 9.11.1-5). To avoid making duplicative payments, coordination with other affected districts will be necessary when information relates to more than one district. The Chief will notify the Director of Investigations, who is responsible for this coordination. In addition, the Informant Claims Examiner (ICE) in the respective service center will be contacted to determine if the informant filed a Form 211. The specific procedures for contacting the ICE are outlined in Handbook 104, Information and Informant Rewards. Each paid informant should be advised that payments for information are not to be construed in any way as establishing an employer/employee relationship with the IRS. The Chief may provide this advice through a personal contact by an agent, with another agent as a witness, who will certify that they orally advised the informant. A copy of this document should be included in the informant's control file. The Chief will be responsible for advising all informants of the total amounts paid during the year and that all monies paid for information are taxable and should be reported on their tax returns. The Chief may provide this advice through a personal contact by an agent, who will certify that he or she orally advised the informant. A copy of this document should be included in the informant's control file. For those informants whose total payments from the Service during a calendar year are of a dollar amount that would make him or her liable to file a tax return, the Chief will be responsible for making follow-up checks to determine if these informants filed a return and reported the payments. These follow ups must be completed no later than November 30 of the year following the tax year. The Chief will initiate action if an informant failed to either file a return or report the payments. The Chief will prepare a report certifying he or she has initiated follow-up checks to ensure informants, who were required to file tax returns, have reported all payments received from the IRS. The report will contain the informants' control numbers, dollar amounts paid to the informants, and the dates the follow ups were conducted. See text in IRM Handbook 9.4 Chapter 2.
### [9.11] 1.4.6.4 (04-26-1999) Closing The Investigative Imprest Fund
After completion of all expenditures and submission of claims for reimbursement relating to an authorization, Item 10 of Form 8561 should be completed and forwarded to the imprest fund cashier.
### [9.11] 1.4.6.5 (04-26-1999) Guidelines For The Investigative Imprest Fund Cashier
Each Director of Investigations is responsible for implementing uniform cashier procedures and record keeping methods within their regions and ensuring that all districts with imprest funds follow the bookkeeping system. Alternative systems that incorporate proper accounting controls and provide excellent audit trails may be used at the option of the Director of Investigations. The Chief, CI, is responsible for appointment of employees as cashiers (principal and alternate) whose duties do not require making investigative expenditures or granting approval for investigative expenditures. All cashiers and alternates will be issued IRM 1724, Imprest Funds Handbook, and will be responsible for a working knowledge of its contents.
### [9.11] 1.4.6.5.1 (04-26-1999) Investigative Imprest Fund Cashier Responsibilities
Cashiers and alternate cashiers are responsible for: Maintaining detailed records of authorizations, funds advanced to investigative officers, checking account transactions, reimbursement of expenditures, and documentation following established procedures. Ensuring that currency and other negotiable instruments are adequately protected and exclusively controlled at all times. (The cashier is personally liable for all government money coming into his or her possession.) Verifying that an approved current authorization is on file before funds are disbursed, including advances, and ensuring that the maximum amount approved for any authorization is not exceeded. Issuing and/or securing a receipt when funds are advanced to or returned by an employee. See Part 1 of the IRM, Imprest Funds Handbook. Keeping imprest money separate from all other funds and not comingling personal or other money with imprest funds; loaning official funds; using imprest funds for personal purposes; depositing imprest fund money in financial institutions unless authorized to do so; or exchanging imprest fund money with other funds, personal or otherwise, unless properly authorized. Securing properly approved and authorized SF 1164 before reimbursement for expenditures is made to an employee or applied against an employee's advance. See Part 1 of the IRM, Imprest Funds Handbook The cashier: is responsible for ensuring that a special agent enters the Sub-Object Code (SOC) by amounts on each SF 1164. should cancel each SF 1164 by perforating or by stamping the word "Paid" on each one. should maintain a photocopy of the SF 1164 and attached original receipts and other confidential documentation submitted in support of the expenditures in a locked file. If the documentation is segregated and stored separately, the SF 1164 should be coded to correspond to the receipts and/or other documentation. (If the cashier is not a CI employee, then the Chief or Chief's designee should maintain these documents.) should retain the documentation relating to confidential expenditures made in undercover operations. (If the cashier is not a CI employee, then the Chief or Chief's designee should maintain these documents.) Establishing checking accounts, if deemed appropriate, maintaining current signature cards, ensuring that each check is issued in sequential order, maintaining detailed records of checking account transactions, and reconciling the bank account at the end of each month or time period when bank statements are received. See Part 1 of the IRM, Imprest Funds Handbook. Preparing and submitting SF 1149, Statement of Designated Depository Account, at the close of each month through the Chief, CI, to the Regional Chief Fiscal Management. See text 654 of IRM 1724, Imprest Funds Handbook. Preparing and submitting SF 1129 with attached SF 1164's, at least once a month as of the last workday through the approving official to the Regional Chief Fiscal Management Branch. See text 810 of IRM 1724, Imprest Funds Handbook. The cashier will submit a SF 1129 every month, even if a transaction has not occurred during the month. The cashier should request reimbursement only for completed transactions and not advances to employees. The cashier should promptly submit the SF 1129 at the end of the fiscal year, and include all expenditures made by the end of the fiscal year. The cashier should number the SF 1129 in the order of payment at the time it is prepared starting with "one" at the beginning of each fiscal year. The cashier must include the following statement on the SF 1129, in the Accounting Classification section: "Amounts claimed as confidential expenditures, for which receipts are not furnished, were incurred in connection with properly authorized activities as identified on the sub-vouchers. Detailed information on these expenses is held in the district office files." Refusing to disburse advances or pay reimbursement of expenses to an employee on behalf of another employee, except for undercover operations. Each employee for whom an advance is made or expenditure is reimbursed must request and receive it from the cashier individually. Making advances to the alternate cashier to permit uninterrupted disbursing services during short absences or when the volume of work requires the services of the alternate cashier. The alternate must sign a receipt for any advances and account for disbursements to the cashier as soon as possible but no later than the end of the month. Notifying the Chief, CI by the 10th workday of the month about any advance that is not accounted for. Paying financial institutions for fees charged for cashing reimbursement checks received from the disbursing officer and other banking maintenance fees charged by financial institutions and obtaining reimbursement by submitting a SF 1164 to the Chief, CI, for approval. Depositing regional reimbursements and returned advances to the financial institution within 5 workdays from receipt of the funds. Balancing the fund and preparing Form 2844, Reconciliation of Imprest Fund, during the quarterly unannounced cash verification audits in the presence of verifying employees and whenever accountability is transferred due to a change in cashiers. See text in IRM Part 1, Imprest Funds Handbook. Locking the fund storage container or safe at all times in which the imprest fund cash box, reports, records, original receipts, and other documentation are kept whenever not conducting business even if the absence is only momentary. Retaining copies and/or originals as appropriate for authorizations, advances, reimbursement vouchers, receipts, accountability reports, official forms, checking account records, and other documentation in an orderly system. In addition to maintaining a current and working knowledge of all pertinent regulations concerning imprest fund operations, the cashier will also be familiar with investigative procedures. The cashier is to be alert for any matters which do not appear to comply with prescribed regulations concerning confidential expenditures, for whatever purpose, and bring them to the attention of the Chief, CI, or other appropriate designee. Exhibit [9.11] 1-1 (04/26/99) MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-1 (Cont.) (04/26/99) MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-1 (Cont. 3) (04/26/99) MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-1 (Cont. 4) (04/26/99) MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-1 (Cont. 5) (04/26/99) MOU Between Assistant Commissioner, CI; Assistant Commissioner, (Finance)/Controller; Assistant Commissioner, Human Resources & Support; and Chief Information Officer Exhibit [9.11] 1-2 (04/26/99) Form 8561, Request For Recoverable/Confidential/Incidental/Seizure Funds Exhibit [9.11] 1-3 (04/26/99) Form 8562, Request/Receipt For Advance From Investigative Imprest/Or Non-Recoverable Funds Exhibit [9.11] 1-4 (04/26/99) Form 2507, Receipt For Money--Cashier Advance Fund Exhibit [9.11] 1-5 (04/26/99) Standard Form 1164, Claim For Reimbursement For Expenditures On Official Business Exhibit [9.11] 1-6 (04/26/99) Standard Form 1165, Receipt For Cash--Subvoucher
Exhibit [9.11] 1-7 (04/26/99)
Managerial Control Plan for the Imprest Fund for Investigative Purposes

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The Investigative Imprest Fund should be properly safeguarded, used for authorized purposes only, maintained at an adequate level, and properly accounted for. Internal controls should be adequate to detect and deter material fraud by employees. The Imprest Fund for Investigative Purposes is similar to a Small Purchase Imprest Fund. The differences are the advances of funds for investigative expenditures, the confidentiality of disbursements, and the use of checking accounts; otherwise it is established and maintained in a like manner. A review of the Investigative Imprest Fund should include, but is not limited to, the following.
| 1. | AUTHORIZATION --To assess the propriety of project and fund authorizations, determine whether:
|  |  | A. | An authorization has been requested and approved in advance by the appropriate authorizing official. (See Delegation Order 16 as revised, Authorization to Approve Confidential Expenditures). As outlined in Delegation Order 16, as revised, the following officials may authorize imprest fund expenditures:
|  |  |  | Amounts in excess of $20,000 | Assistant Commissioner (CI)
|  |  |  | Amounts up to $20,000 | Directors of Investigation (Criminal Investigation) and Director, National Operations Division (Criminal Investigation)
|  |  |  | Amounts up to $10,000 | District Directors
|  |  |  | Amounts up to $5000 | Chief (CI)
|  |  |  | All expenditures for SOC 2507, Confidential Expenditures for Undercover Operations, no matter what dollar amount, require approval at the Regional Commissioner level or above.
|  |  | B. | All authorizations related to a single case, information item, or non-recurring project should be identified when determining the approval level. (For example, Case #1028 has an imprest fund advance approved by the District Director in the amount of $2,500. A subsequent undercover operation is approved and a $18,000 advance for confidential expenditures is requested. Since the total aggregate amount authorized for this case is $20,500, approval by the Assistant Commissioner (CI) is required.)
|  |  | C. | A copy of the authorization is maintained by the cashier. Each authorization should have a brief description of the purpose, identification or project number, maximum amount authorized, and other information significant to the authorization.
| II. | CASHIER --To assess the propriety of cashier operations, determine whether:
|  |  | A. | Cashiers [Principal and/or Alternate(s)] have copies on file of the signed SF 211 Section VI (Request for Change or Establishment of Imprest Fund) by the Chief Disbursing Officer approving their designations.
|  |  | B. | Detailed records showing at all times the amount expended, amount advanced but not yet expended, and amount available (neither advanced nor expended) are maintained by the cashier under the authorization concerned.
|  |  |  |  | 1. | Advances and confidential expenditures.
|  |  | C. | The cashier who maintains a checking account keeps detailed records of checking account transactions, using the check stubs or other forms provided in the checkbook, including:
|  |  |  |  | 1. | Checks received and deposited to the account;
|  |  |  |  | 2. | Cash returned and deposited to the account;
|  |  |  |  | 3. | Uncashed checks returned by agents;
|  |  |  |  | 4. | Checks outstanding;
|  |  |  |  | 5. | All disbursements from the account, both for advances and expenditures;
|  |  |  |  | 6. | Statements of account transactions;
|  |  |  |  | 7. | Accurate, current, and dated entries.
|  |  | D. | The cashier maintains detailed records for each agent to whom an advance is made, including:
|  |  |  |  | 1. | Name of agent;
|  |  |  |  | 2. | Authorization number and numerical sequencing;
|  |  |  |  | 3. | Amounts advanced and returned with receipts (Form 2507, Receipt for Money--Cashier Advance Fund);
|  |  |  |  | 4. | Dates of advances and returns;
|  |  |  |  | 5. | Requests for advances.
| II. | CONFIDENTIAL EXPENDITURES AND REIMBURSEMENTS --To assess the propriety of fund expenditures and reimbursements, determine whether:
|  |  | A. | Requests for Confidential Expenditures (Form 8561) are properly approved and that authorized limitations are not exceeded;
|  |  | B. | Subvouchers for expenditures (Standard Form 1164) are submitted monthly and approved by the Chief, CI. And that the Chief reviews expenditures along with Forms 1164 and supporting receipts;
|  |  | C. | Advances outstanding to agents are correct and accurate;
|  |  | D. | Advances outstanding more than 31 days have an approved extension;
|  |  | E. | Advances are promptly returned when no longer needed;
|  |  | F. | Supporting receipts for subvouchers are original receipts or, if copies, a memorandum explaining the use of a photocopy or other duplicate was submitted.
|  |  | G. | Funds advanced to other agencies are properly documented and approved by management;
|  |  | H. | Subvouchers are cancelled by perforating or by stamping the word "Paid" , signing and/or initialing the document, and entering the date of payment to prevent reuse.
| IV. | ACCOUNTABILITY --To assess accountability over the fund, determine whether:
|  |  | A. | The cashier who maintains an imprest fund, or part of one, in a checking account is preparing a report at the close of each month, showing all transactions in the account during the month, using SF 1149, Statement of Designated Depositary Account;
|  |  | B. | The cashier is submitting OF 1129, Cashier Reimbursement Voucher and/or Accountability Report monthly, as of the end of the month;
|  |  | C. | The original SF 1149 and Optional Form SF 1129, with supporting documents, are transmitted to the Chief, Fiscal Management Branch, and copies are maintained by the cashier;
|  |  | D. | An accountability report is submitted each time there is a change in the amount of the imprest fund, or change in cashiers;
|  |  | E. | Accountability reports are being manually signed by the cashier and by the official responsible for the office in which the imprest fund is located;
|  |  | F. | Accountability is transferred to the alternate during the principal's absence;
|  |  | G. | Account verifications are performed at irregular intervals, once each quarter, without prior notice by two independent and responsible employees, which include:
|  |  |  |  | 1. | Reconciling the imprest fund by the cashier (on Form 2844) in the presence of the two verifying employees, including advances to alternate cashiers;
|  |  |  |  | 2. | Ascertaining the amount of the fund and noting each increase and/or decrease to the advanced amount of the fund since the last verification;
|  |  |  |  | 3. | Verifying the actual composition of the fund, to the extent applicable, which includes:
|  |  |  |  |  |  | (a) | Cash on hand;
|  |  |  |  |  |  | (b) | Uncashed advance or reimbursement checks on hand, if any;
|  |  |  |  |  |  | (c) | Interim receipts and unreimbursed subvouchers on hand (Also see 4, below), if any;
|  |  |  |  |  |  | (d) | Reimbursement vouchers in transit, if any; and
|  |  |  |  |  |  | (e) | Bank balance and outstanding checks, if any.
|  |  |  |  | 4. | Verifying employees are examining each of the interim receipts and unreimbursed subvouchers on hand (and their attachments) to ensure that each document supporting payment from the fund is (to the extent that such action will not affect the evidentiary value of the documents) currently dated, properly approved, signed by the employee receiving payment, cancelled to prevent re-use, serially numbered, itemized, and, if required, signed by the vendor concerned;
|  |  |  |  | 5. | The appropriate cash verification forms, showing the amount of the fund in each of the classifications in (3), above, their total, the total amount advanced, and any differences, are being prepared and signed by the cashier; the employees making the verification are certifying it's accuracy, or (indicating in the "Remarks" section of Form 2844 Reconciliation of Imprest Fund,) any irregularities observed or otherwise ascertained during their verification.
| V. | SECURITY AND SAFEGUARDS --To assess the fund security and safeguards, determine whether:
|  |  | A. | All imprest fund cash, checks, and other items making up the fund are retained under the exclusive control of the cashier, in containers which meet security requirements.
|  |  | B. | Imprest funds for investigative purposes are kept separate from other funds in a locked cash box within the imprest fund storage container.
|  |  | C. | Space assigned to the cashier is being maintained to prevent unauthorized individuals from having access to the cashier area, and has periodic, unannounced inspections by Regional and National Office Security Officers to ensure proper safeguards.
|  |  | D. | The key and/or combination for the imprest fund container and lockable cash boxes in which imprest funds are held are under the exclusive control of the cashiers only.
|  |  | E. | The alternate cashier who maintains an informal advance from the principal has a separate lockable cash box that should be secured inside the fund container.
|  |  | F. | The combination and/or spare keys for the fund container and lockable cash boxes are maintained in signed, sealed, and dated envelopes and retained in an appropriate container, unopened, except by a responsible official in the event of an emergency.
|  |  | G. | The combination to the lock on the imprest fund storage container is changed immediately upon receipt to a new lock; whenever there is a change in cashiers; whenever it has been necessary to effect access to the fund in the case of the unforeseen absence of the cashier(s); whenever the combination has been compromised in some way; or, in any event, at least once each year.
|  |  | H. | The imprest fund storage container, as well as cash lock boxes within the storage container, are locked at all times, except when cashiers are actually making transactions, and whenever cashiers are absent, even only momentarily.
|  |  | I. | The accountability for each imprest fund is vested in only one person--the individual whom the designating official has designated as cashier.
|  |  | J. | Cashiers and their alternates are maintaining (they are not allowed to) any unofficial or additional funds other than the ones they are specifically designated to administer during their official duty hours.
|  |  | K. | The maximum amount of each fund is fixed at the lowest practical level.
|  |  | L. | Reimbursement vouchers are transmitted to the fiscal management office by the official responsible for the office in which the imprest fund is located and not by the cashier(s).
|  |  | M. | The duties of the cashier are adequately separated.
|  |  | N. | Bank signature cards for checking accounts are signed by:
|  |  |  |  | 1. | Principal Cashier;
|  |  |  |  | 2. | Alternate Cashier;
|  |  |  |  | 3. | Official responsible for the office in which the imprest fund is located; and
|  |  |  |  | 4. | Chief, Fiscal Management Branch, or Chief, Office of Financial Operations, Systems and Accounting Standards Division, or designee.
|  |  | O. | Checks are pre-numbered in sequential order from the bank or manually numbered in sequential order prior to use by the cashier.
| VI. | MANAGERIAL INVOLVEMENT AND REVIEWS --To assess the adequacy of managerial controls, determine whether:
|  |  | A. | The Chief, CI is ensuring proper supervision over the fund, including assistance to the cashier in the performance of his/her duties and in the safeguarding of the funds.
|  |  |  |  | 1. | Ensuring that adequate training is provided for a new cashier;
|  |  |  |  | 2. | Ensuring that hours of operation for the imprest fund are established.
|  |  | B. | The Chief, CI is administratively approving reimbursement vouchers and/or accountability reports prepared by the cashier which includes:
|  |  |  |  | 1. | Signing the SF 1129, Cashier Reimbursement Voucher and/or Accountability Report;
|  |  |  |  | 2. | Examining the attached subvouchers supporting the payments made by the cashier for which reimbursement is being requested and ensuring that the accounting code information is correct;
|  |  |  |  | 3. | Ensuring that reimbursement vouchers are submitted at least monthly (if there has been activity of $25 or more in the fund), and that no more than one month's transactions are included on each SF 1129 submitted unless subvouchers have been accumulated for more than one month in order that reimbursement will be at least $25;
|  |  |  |  | 4. | Transmitting reimbursement vouchers directly to the fiscal management office after approving them.
|  |  | C. | The Chief, CI is promptly notifying the designating official, by memorandum, whenever there is to be a change in the imprest fund (designation or revocation of principal or alternate cashiers, change from principal or alternate cashier or vice-versa, change in cashier's name or location, or increase or decrease in the amount of the fund);
|  |  | D. | The Chief, CI is appointing two responsible and independent employees to perform a cash verification of the fund (at least once each calendar quarter);
|  |  | E. | The Chief, CI is directing the changing of the safe combination whenever there is a change in cashiers, transfer of accountability due to unforeseen absence of the cashier, or, in any event, at least once a year;
|  |  | F. | The Chief, CI is approving checking account reports prepared on Standard Form 1149, Statement of Designated Depositary Account;
|  |  | G. | The Chief, CI is aware that his/her approval of the cashier's certification indicates that receipts for confidential expenditures are maintained in the files of the imprest fund;
|  |  | H. | The Chief, CI (who is directly responsible) is ensuring that corrective actions for matters discovered by means of cash verifications, local reviews, internal audits, or by any other means are being carried out.
Exhibit [9.11] 1-8 (04/26/99) Authorization Ledger Balance Exhibit [9.11] 1-9 (04/26/99) Accountability of Advances, Expenditures, and Funds Returned Exhibit [9.11] 1-10 (04/26/99) Accounting For Use of Confidential Funds
### Internal Revenue Manual | ### Hndbk. 9.11 Chap. 1 Fiscal and Budgetary Matters | ### (04-26-1999)

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