Policy Number: 3-5
Policy Name: Petty Cash Funds
Date: April 15, 1975
Revisions: April 27, 1989; July 1, 1994; July 2000; July 1, 2005
To outline procedures to be followed in requesting and administering petty cash funds.
The following requirements are to be used for the establishment and administration of petty cash funds. Under no circumstances may undeposited receipts be used as a petty cash fund, nor may petty cash funds be co-mingled with other funds.
Types of Petty Cash Funds
A petty cash fund may be established for one of the following purposes:
Petty cash reimbursement fund - to make cash conveniently available for expenditures or reimbursements of small dollar amounts.
Petty cash change fund - to make change available for necessary department operations. A change fund should not be used for expenditures or reimbursements.
To open a Petty Cash Fund
A memo requesting to open a petty cash fund is to be sent to the Director of Procurement Services, stating the specific nature of the fund, the reasons it is needed, the amount requested, and the names and signatures of the fund custodian and his/her supervisor. Also include a FIN Requisition/Vendor Payment Request, payable to the fund custodian, with the initial amount of the fund charged to the University's General Petty Cash Purpose A1CGPC.
The amount of the petty cash fund should be a conservative estimate of need, totaling no more than anticipated average small expenditures for a one month period. Use of the University's Purchasing Card is encouraged where appropriate for small purchases in lieu of petty cash funds.
The request to set up a new petty cash fund and the web form for the amount of the fund must show the approval of the unit head.
The fund custodian has primary responsibility for the safekeeping, distribution, and accounting of the petty cash fund. The fund custodian may be a salaried staff member.
Administration of the Petty Cash Fund
A petty cash voucher must be used to authorize the release of funds and to document the nature of the expenditure and must be accompanied by a vendor sales slip or invoice. The form must include the following:
At all times the petty cash fund must be accounted for by vouchers for advanced funds, receipts, and cash-on-hand. The total of these three must equal the petty cash fund total.
Items for which petty cash cannot be used include:
Petty cash may be used in lieu of Reimbursement for Personal Expense Invoice for Travel and Meals (as governed by University Travel and Entertainment Policies) not to exceed $50.00 or for other authorized expenses which do not exceed $50.00, with the same requirement for supporting documentation.
Petty cash funds and receipts are to be maintained in secured storage with access limited to authorized personnel at all times.
To reimburse a petty cash fund:
List disbursement receipts numerically on the petty cash envelope, with appropriate purpose code information.
Enter the total dollar amount of the petty cash receipts in Block A on the petty cash envelope.
Count the remaining cash on hand and enter the amount in Block B. The total of Block A and Block B must always match the total amount of the petty cash fund.
Prepare a FIN Requisition/Vendor Payment Request, payable to the fund custodian, which summarizes the charges to each purpose code recorded on the envelope. The amount requested must fully replenish the petty cash fund.
The fund custodian must sign both the web form and the envelope.
The fund custodian's supervisor must review supporting documentation and approve the web form.
The web form and envelope( ) are then forwarded to Procurement Services for payment processing.
The reimbursement check must be cashed and placed in the fund in a timely manner.
Change in Custodian or Supervisor of Petty Cash Fund
To transfer custodianship of a petty cash fund:
Follow all steps in C.5. Note: The web form and envelope(s) must be made out to and signed by the new custodian.
Send a memo of transfer, the web form, and the petty cash envelope to the Director of Procurement Services. The memo should include:
To record a change in supervisor of the petty cash fund custodian, send a memo to the Director of Procurement Services. The memo should include:
To Close a Petty Cash Fund
When the current petty cash custodian leaves the University or unit due to promotion, transfer, resignation, etc., the petty cash fund must be closed or custodianship must be transferred before the current fund custodian leaves the position. Custodianship remains with an individual until one of these two procedures is completed. This responsibility lies with both the petty cash fund custodian and supervisor.
To close a petty cash fund or voluntarily reduce the total amount of the fund:
Follow steps a, b and c in C.5.
Prepare a FIN Cash Transmittal for any cash balance and transmit to the Cashiers Office, into the University General Petty Cash Purpose: A1CGPC
Submit the envelope with receipts, supporting documentation and copy of the cash transmittal form to the Director of Procurement Services with a memo requesting that the fund be closed or decreased.
Audit of Petty Cash Funds
General Accounting personnel will request a confirmation of the fund balance on an annual basis from the fund custodian and supervisor. All petty cash funds are subject to surprise audits by Procurement Services and Internal Audit staffs.
In addition, the supervisor of the fund custodian should periodically conduct surprise audits to assure that all funds are accounted for by the total of cash and documentation supporting disbursements. Such supervisor audits should be conducted at least twice each year, and every time there is a change of custodian.
Submitted by: Executive Vice President and University Treasurer