Log in / Register
Home arrow Economics arrow Loan disbursement handbook
< Prev   CONTENTS   Next >



10.1 The imprest fund procedure is a disbursement procedure where the Asian Development Bank (ADB) makes an advance disbursement from the loan account for deposit to an imprest account to be used exclusively for ADB's share of eligible expenditures.


10.2 The main objective of the imprest fund procedure is to help the borrower reduce cash flow difficulties in financing project expenditures, thereby facilitating project implementation. Other objectives are providing the borrower with more control over payments, and reducing the number of withdrawal applications (WAs), particularly for payments for small expenditures and related costs.

Conditions for Approval to Use the Imprest Fund Procedure

10.3 For approval to use the imprest fund procedure, the following conditions should be considered and met:

• Need for the procedure: The borrower[1] is to justify using the procedure, indicating the cash flow requirement for effective project implementation and need to make numerous payments for small expenditures.

• Borrower's capability: The borrower, executing agency (EA), and/ or implementing agency (IA), as appropriate, must have sufficient administrative and accounting capabilities to establish adequate internal control, accounting, and auditing procedures to ensure efficient use and operation of the procedure.

• Audit arrangements: The borrower, EA, and/or IA, as appropriate, must also have the capability to arrange for periodic and annual independent audits of the imprest fund procedure by auditors acceptable to ADB.

Approval of Procedure

10.4 During project preparation, ADB staff assesses the need for the imprest fund procedure. Use of the procedure must be provided for in the project administration manual (PAM). If, during project implementation, the borrower finds it necessary to use the procedure, it may request ADB's approval (Sections 4.13-4.14).

Basic Requirements

10.5 A signed WA for imprest fund (Appendix 10A) must be submitted to ADB, together with required supporting documents (Section 10.35).

Establishing the Imprest Account

10.6 The borrower, EA, or IA is required to open a separate bank account[2] for depositing advances and for the exclusive use of the project (unless otherwise approved by ADB). The imprest account should be maintained in a bank account without restriction on withdrawing funds at any time (e.g., current account) and is opened in the name of the borrower, EA, IA, or project, as appropriate.

10.7 The borrower, EA, or IA who established the imprest account in its name shall be accountable and responsible for proper use of advances to the imprest account, including advances to the sub-accounts, if approved and used (Sections 10.26-10.29).

  • [1] "Borrower(s)" in this handbook refers to borrowers, recipients (of grants), and/or their executing agencies unless the context requires otherwise. The imprest fund procedure may also be used by implementing agencies, if considered appropriate.
  • [2] Some countries require transferring the ADB loan proceeds to the borrower's bank account or budget account before transferring advances to the imprest account. Such borrower's account is not separately established for the purpose of a project and does not directly pay out project expenditures; therefore, it is considered as a "conduit" or "pass-through" purpose account, but not the imprest account. The conduit or pass-through purpose account should be identified and reflected in the fund flow chart and disbursement arrangements of the PAM.
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
Business & Finance
Computer Science
Language & Literature
Political science