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
Establishing a Petty Cash Fund
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.
- 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 email firstname.lastname@example.org a notification to remove the hold for the Banner document just entered. If emailed please list in the Subject Line: Remove Hold Notification. Be sure to include:
- the custodian's name
- the custodian's phone number
- who the check will be issued to "University of Oregon Petty Cash department of XXXXXXXX"
- Amount (if closing account then state that the petty cash fund is being closed)
- Banner document number
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 on the 2nd Floor, Thompson University Center (TUC). 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
|March 3, 2017||Beginning Balance||100.00|
|March 9, 2017||Construction Paper||2.55||97.45|
|April 1, 2017||Duct Tape||3.79||93.66|
|April 7, 2017||Pens||3.25||90.41|
|April 9, 2017||Nails||1.79||88.62|
|May 2, 2017||Stamps||9.13||79.49|
|May 5, 2017||Fund Replenishment||20.51||100.00|
Note: At any given time, receipts and advance slips plus available cash must equal the original amount used to establish the fund.
Closing Out a Petty Cash Fund
- Balance your fund.
- Reimburse the fund if necessary--If your fund was a change fund for $100 and you have $100 cash, there would be no need to reimburse the fund. To reimburse your fund, follow steps 1 through 4 listed under Petty Cash Fund Reimbursement above. Note: When you send over the notification to remove the hold, please let us know that you are closing your account so we can prepare a receipt for you in advance.
- Bring any cash from the fund over to AP when you come to pick up the check and the receipt for your funds.
- Take the check, cash (if any), and receipt to Cashiers for deposit. This deposit will terminate your fund.
Example: You have a petty cash fund for $100. You use this fund for small purchases. You seldom use this fund and decide that you really do not need it any longer. When you balance your fund, you find you have receipts for small office purchases in the amount of $17.35 leaving a cash balance of $82.65. You would enter (or have entered) a payment in the amount of $17.35 for office supplies (account code 20101). You would include a complete explanation in Banner text "Reimbursing petty cash fund for small office purchases made from petty cash during January through March 2017. As fund is rarely used, this payment will be used to close this 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.Back to Top