Advances from a change fund

Advances from a change fund

• A. They can be used freely for any purpose.
• B. They should be avoided altogether as never allowed.
• C. They can be used to advance funds to officials or employees as needed.
• D. They should not be used to make advances to officials or employees.

Answer: (D)

Advances from a change fund should not be used to give money to officials or employees. A change fund is kept to handle small cash transactions and to provide change for customers, all under tight accountability. If you advance money to a person, you break the imprest system that keeps the fund balanced, increasing the risk of loss or misuse. The proper approach is to reimburse the fund with receipts for actual expenses or use authorized payment methods, so the fund can be restored to its fixed amount without exposing individuals to personal liability. This is why the correct position is that you should not make advances to officials or employees from a change fund.

Advances from a change fund should not be used to give money to officials or employees. A change fund is kept to handle small cash transactions and to provide change for customers, all under tight accountability. If you advance money to a person, you break the imprest system that keeps the fund balanced, increasing the risk of loss or misuse. The proper approach is to reimburse the fund with receipts for actual expenses or use authorized payment methods, so the fund can be restored to its fixed amount without exposing individuals to personal liability. This is why the correct position is that you should not make advances to officials or employees from a change fund.