Final disbursement.Preparation of WA(s) for final disbursement(s) of project loan
and tranche disbursement of a policy-based loan should be closely coordinated
between ADB and the borrower and/or EA, particularly if the remaining unutilized
balance is expected to be fully utilized.
4.17 Winding-up period.10
The borrower may make withdrawals from the loan account
for expenditures incurred on or before the loan closing date. Expenditures incurred
after the loan closing date will not be financed under the loan. ADB may allow up to
4 months after the loan closing date (i) for the borrower’s WAs to be submitted to ADB
for expenditures incurred on or before the loan closing date, and (ii) for the borrower
to fully liquidate expenditures incurred on or before the loan closing date. After the
winding-up period, WAs, including requests for liquidation, will not be accepted.
Extension of the winding-up period, on an exceptional basis, may be approved by ADB
(Section 4.14).
4.18 Within 2 months after the winding-up period for submission of documents, the
borrower should fully refund any outstanding imprest account balances to ADB. If the
borrower fails to fully refund such balances, ADB may, among other corrective actions,
decide not to allow the use of the imprest fund procedure under the borrower’s new
projects until such time as the refund is received.
4.19 Payment of final audit fees.If external auditor’s fees are financed by ADB, it is
best practice to pay the audit fee before the loan closing date after completing the
final audit (Section 4.15). When audit fees under a project need to be paid after the
closing date, special arrangements may be required for payment of the final audit fee
from the loan account. External auditor’s fees for the final fiscal year may be disbursed
from the loan account, under condition that (i) the borrower signs a contract for the
final audit prior to the loan closing date, and (ii) the contract is a lump-sum or fixedprice contract that requires completion
11
of audit within 6 months after the loan
closing date. If the audit work cannot be completed during the winding-up period, and
the final audit fee will be paid through the escrow account, full supporting documents
should be attached to the WA (see Appendix 4D for more details).
4.20 Refunds.All refunds must be paid to ADB’s accounts at its depository banks with
payment details indicating (i) references such as loan number, (ii) description or
nature of the refund, and (iii) currency and amount of refund. The borrower and/or
EA should send advice to ADB’s Treasury Services Division (TDTS) and CTLA once
a refund is made.

The imprest fund procedure is a disbursement procedure where the Asian Development Bank (ADB)

10:30 AM    

Description
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.
Objectives
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:
ȕ Need for the procedure:The borrower1
is to justify using the procedure,
indicating the cash flow requirement for effective project implementation and
need to make numerous payments for small expenditures.
ȕ Borrower’s capacity:The borrower, executing agency (EA), and/or
implementing agency (IA), as appropriate, must have adequate administrative
and accounting capacity to establish sufficient internal control, accounting, and
auditing procedures to ensure efficient use and operation of the procedure.
2
If the EA/IA’s capacity is determined to be inadequate, the imprest fund
procedure should not be used.
ȕ 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.
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
An assessment of the borrower’s capacity should be based on the results of the Financial Management
Assessment (FMA) performed on the relevant entity, review of current and prior audit reports for projects
administered/implemented by the relevant EA/IA, internal audit reports, issues noted during project
implementation (e.g., issues noted during the processing of WAs by ADB) for projects administered/
implemented by the relevant EA/IA, and other relevant information, as deemed necessary.