Petty Cash Fund Procedures

Petty Cash Fund Procedures

Petty Cash Fund Definition – A small cash fund used to make incidental purchases where normal purchasing methods are not practical. Special care must be taken to protect such funds from theft or misuse.

Petty Cash Funds Policy 3-011

  1. General Purpose of Petty Cash Funds – Petty Cash is intended for small, incidental purchases. The amount of the fund should not exceed the amount of expenditures required in a 45 day period.
  2. Establishment of Petty Cash Funds – A request for such funds must be made to the General Accounting Office, or in the case of a Grant or Contract to their accounting office. To create or make changes in amount, custodian, chartfield or closing use the Petty Cash Request/Change Form.
    1.  In the event you want to decrease or close your petty cash fund, the custodian should deposit the amount of the fund reduction via a Departmental Deposit Form. Send the form to Income Accounting crediting the petty cash account (10100). Please also send a copy of the Departmental Deposit Form along with a replacement Petty Cash Request/Change Form, indicating the new amount of the fund to General Accounting.
  3. Expenditures and Reimbursements
    1. Originalreceiptsmust be obtained for each petty cash expenditure. Such receipts normally include cash register or point-of-sale receipts, or properly approved “Received of Petty Cash”slips. Individuals requesting reimbursement from petty cash must sign the receipts. For each disbursement, the followinginformationmust be documented.
      1. Payee
      2. Date of purchase
      3. Amount
      4. Business purpose and description of purchase
    2. When the cash fund becomes depleted, complete a Petty Cash Reimbursement Form and submit to Accounts Payable. The reimbursement form should be approved by the appropriate department head, with all applicable receipts attached.
    3. The refund check can be cashed at the main cashier’s window in room 165 of the Student Services Building.
    4. Departments are responsible to ensure that petty cash expenditures do not include Utah Sales Tax. Petty Cash funds will not be replenished for amounts paid in Utah Sales Tax without exception authorization from the cognizant Dean or equivalent position.
  4. Prohibited Uses
    1. Petty cash funds may not be deposited into personal bank accounts or commingled with other funds.
    2. Departments may not establish bank accounts for petty cash funds.
    3. Purchases of goods and services for more than $100 should not be made with petty cash. Purchases over $100 should be made using other procurement methods such as the purchasing card.
    4. Petty cashfundsmay notbeexpended for:
      1. Salaries, wages, or similar payments to individuals.
      2. Purchases of goods and services for the personal use of faculty or staff members.
      3. Prohibited acquisition items as outlined in Rule R3-100E.
      4. Payroll advances, travel advances, and loans to employees or students
      5. Cashing checks for employees or other individuals.
      6. Reimbursement of entertainment expenditures. Such expenditures should be submitted to Accounts Payable as outlined in Policy 3-031.
  5. Maintenance and Security of Funds
    1. Petty cash funds should be properly secured at all times. Access to the funds should be restricted to one person (e.g., the petty cash custodian or a specified cashier).
    2. Cash on hand and receipts for disbursements made should always equal the assigned amount of the petty cash fund. This cash should be counted daily and logged using the Cash Count Sheet.
    3. Petty cash funds are subject to unannounced verifications by management of the responsible department, the office of the Utah State Auditor, the Internal Audit Department, and/or the Controller’s Office. At the time of the audit, the petty cash custodian must provide a full accounting of the fund.
  6. Annual Review of Petty Cash Funds
    1. Annually, the petty cash custodian and department head, or designee (other than the custodian),are requiredtoreview each petty cash fund under their control and verify the following:
      1. The fund is still needed for the amount authorized.
      2. The sum of cash on hand and receipts for unreimbursed expenditures is equal to the amount which has been authorized.
      3. The funds are secured and not deposited in a separate bank account.
      4. The custodian is the custodian of record.
      5. This petty cash policy and supplemental guidelines has been reviewed and the fund is being used in accordance with this policy.
    2. Failure to complete the annual review may result in the closure of the petty cash fund.

(March 2015)