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Audit Arrangements

10.30 The imprest fund procedure must be audited at least annually by independent and qualified auditors acceptable to ADB. The audits are carried out as part of the regular annual audits of the project financial statements prepared by the borrower, EA, or IA. Separate audit opinions on proper use of the imprest fund procedure in accordance with the loan documents are included in the auditor's report. Such separate opinion on the imprest fund procedure should be expressed in consideration to proper use of advances to the sub-account(s) provided from the imprest account(s) in accordance with the loan documents and this handbook.

Review by ADB Staff

10.31 ADB reserves the right to conduct spot or random checks of the imprest account and expenditures paid from the imprest account (including those expenditures paid from the sub-accounts) through special disbursement missions or review missions, or upon ADB's request for submission of supporting documents on a sampling basis.

Suspending Replenishment

10.32 ADB may suspend replenishment of the imprest account if

• the loan is declared suspended by ADB, partially[1] or fully;

• audit reports, management letters, or ADB missions indicate significant irregularities in financial management, accounting, internal control, and/or the operation of the imprest account(s) and/or the sub-account(s); or

• the imprest account has been inactive for more than 6 months and no application for replenishment has been submitted.

10.33 During the suspension, no additional funds will be advanced to the imprest account. However, available funds in the imprest account (including the sub-accounts) can be used to meet eligible expenditures, unless otherwise instructed by ADB.[2] WAs submitted for these expenditures will be applied to liquidate the balance of advances.

Narrative Procedures

10.34 The narrative procedures and the check list for the imprest fund procedure are shown in Appendix 10E.

Supporting Documents

10.35 The supporting documents listed in the following table should be submitted to ADB together with the WA. If simplified documentation (i.e., SOE and/or FAW) is approved, supporting documents should be retained by the EA and/ or IA for annual audit of project financial statements and/or ADB's review (see Section 4.29 for the retention period of supporting documents). ADB reserves the right to request submission of such documents if deemed necessary. Additional supporting documents which are not listed in the following table may be required, depending on the transaction involved. ADB will return WAs that do not meet the requirements.


Required Supporting Documents"

Initial advance

Estimate of expenditure (Appendix 10B) to support the amount of the initial advance (see also Sections 10.14 and 10.21).

Additional advance -within the approved ceiling

Estimate of expenditure (Appendix 10B) to support total amount of the initial advance and the additional advance (see also Sections 10.14

and 10.21).

Additional advance - exceeding the approved ceiling

1. Estimate of expenditure (Appendix 10B) to support the total amount of the initial advance and the additional advance (see also Sections 10.14 and 10.21).

2. Letter to seek ADB approval of the upward change in the approved ceiling.

Liquidation and replenishment, or liquidation only

1. IARS (Appendix 10C).

2. Bank statement.

3. Either one of the following, as applicable:

- (With SOE approved): SOE.

- (With full supporting documents, i.e., SOE is not approved): Summary sheet (Appendix 7B) and proof of payment and supporting documents as required under direct payment (Sections 7.4-7.5).

- (For expense items exceeding SOE ceiling): Same as the above with full supporting documents.

4. In addition, if FAW procedure is approved and used, and the amounts requested to be withdrawn are paid from the imprest fund, the certificates for FAW (Appendix 9D) need to be attached to the WA.

ADB = Asian Development Bank, FAW = force account works, IARS = imprest account reconciliation statement, SOE = statement of expenditures, WA = withdrawal application.

If supporting documents are written in local language, there should be an English translation of important words and items in the documents (e.g., the title of the document, name of the supplier and/or contractor, description of goods and services, amounts, and dates).

  • [1] Suspension is applicable only to affected EA or component.
  • [2] ADB may demand immediate refund of the available funds in cases where the suspension is due to significant irregularities in the operation of the imprest account and/or the sub-accounts.
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