Petty Cash

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Purpose of a Petty Cash Fund

Wherever possible, departments are encouraged to use a procurement card to handle small volume purchases.

Petty cash funds may be used for the following:

  • making change
  • making small volume purchases when a procurement card is not available
  • reimbursement to employees

Petty cash funds may not be used for the following transactions:

  • Travel Expenses
  • Transactions that have reportable services rendered.  If you have any questions regarding reportable services, contact 6-4235.
  • Prizes and Awards
  • Refunds of tuition or class fees
  • Making Loans
  • Cashing checks
  • Personal reasons

Research subjects can only be paid from petty cash if specifically approved for this purpose

Establishing a Petty Cash Fund

Complete a Request for Petty Cash/Maintenance form and forward to Accounts Payable.

Proper Uses of a Petty Cash Fund

Receipts must be provided for authorized purchases.  No money should be disbursed from the petty cash fund to reimburse a person unless a paid receipt or invoice is presented.  If receipts are not issued for a type of expense incurred (e.g. pay phone calls, etc), then a written note describing the expense is required.  The person who made the expenditure must sign the note.

If cash is advanced to make an authorized purchase, a petty cash advance slip should be signed showing the amount of money the individual received.  When the unspent money and a paid receipt are returned, the advance slip should be destroyed.

Custodian Responsibilities

  • Ensure that appropriate receipts are obtained to support all disbursements.
  • Ensure that the expenditure is appropriate in nature.
  • Ensure that the petty cash fund is reconciled at all times.   THE PAID RECEIPTS OR INVOICES PLUS THE CASH SHOULD ALWAYS EQUAL THE FUND BALANCE.
  • Ensure that the funds are kept in a secure location, such as a locked cash box or desk drawer.  The Custodian should maintain possession of the key.

When there is a change in the designated custodian, a new request for petty cash advance form should be completed immediately reflecting the change in designated custodian.

Storage and Security of Petty Cash Funds

Funds should never be left unlocked or unattended and should be concealed from general view when not in use.

Petty cash funds and associated documents should not be combined or commingled with any other departmental funds.

Petty Cash Fund Reimbursement

The following process should be used to replenish petty cash funds:

Step 1     Create a Banner invoice using your department's petty cash fund as the vendor.

Step 2     Treat as a prepay, placing the document on hold.

Step 3     Fax (6-2393) or mail a hard copy of the invoice to Accounts Payable.  Be sure to include the custodian's name, phone number, and document number on the hard copy.

Step 4     The custodian will be notified when the check is ready for pick-up.

Step 5    Notify Cashiers at 6-3154, in advance, on the day of pick-up so that they may have the cash counted out and ready for you.

Step 6    Pick up the check from Accounts Payable (1st Floor, Oregon Hall).  Take the check to Cashiers for cashing.

The following format is recommended as a tool to maintaining a current record of the petty cash fund's financial status.

PETTY CASH FUND RECONCILIATION
DEPARTMENT:
DATE:
PREPARED BY:

DATE

DESCRIPTION

PURCHASES

REIMBURSEMENTS

BALANCE

March 3, 2005Beginning Balance  100.00
March 9, 2005Construction Paper2.55
97.45
April 1, 2005Duct Tape3.79
93.66
April 7, 2005Pens3.25 90.41
April 9, 2005Nails1.79 88.62
May 2, 2005Stamps9.13 79.49
May 5, 2005Fund Replenishment 20.51100.00

 
Note: At any given time, receipts and advance slips plus available cash must equal the original amount used to establish the fund.

Segregation of Duties

If the custodian of the fund is the same individual that will be creating the reimbursement invoice, an authorizing signature of approval should be obtained from the department head or another authorized individual who is administratively senior to the custodian.

If the fund is used for making change, or is inactive, a periodic accounting of the fund should be completed.  If the fund is greater than $500, a monthly review is strongly recommended.  For funds less than $500, a quarterly review is acceptable.  The review should include documentation showing the date and initials of the reviewer as evidence that this procedure is occurring.