Policy FN05 OPERATING CASH FUNDS

Policy Steward:  Office of the Corporate Controller

Contents

  • Purpose
  • Establishment of a Fund
  • Term of a Fund
  • Custody of a Fund
  • Restrictions
  • Safeguarding Cash
  • Disbursements
  • Records
  • Reimbursement of a Fund
  • Increasing a Fund
  • Decreasing a Fund
  • Further Information
  • Cross References

  • PURPOSE:

    To outline the University's policy on operating cash funds used in an administrative area as a source of funds for petty cash requirements, change funds, travel advances and advances for miscellaneous emergency purposes.

    ESTABLISHMENT OF A FUND:

    The Financial Officer of an area may establish an operating cash fund large enough to provide sufficient funds to carry out the various programs at that location. The custodian of the operating cash fund is the Financial Officer. There is no requirement for the Financial Officer to maintain an operating cash fund.  However, the Financial Officer must provide oversight of all petty cash and change funds for an area even if not provided as an advance through the operating cash fund (See FN04).

    At University Park, the fund is an imprest cash fund, but may be managed through a non-interest checking account in the custodian’s name with approval of the Assistant Controller.

    AT THE NON-UNIVERSITY PARK locations, the fund may be managed in one of two ways:

    1. An imprest cash fund.
    2. A non-interest bearing checking account in the custodian's name. A minimum of two persons (and a maximum of three) will be authorized to withdraw funds from this account: they are the custodian and one or two other University employees designated by the custodian to sign checks in the custodian's absence.

    TERM OF A FUND:

    An operating cash fund is established for an indefinite period of time, since the requirements of the fund are of a permanent, continuing nature.

    CUSTODY OF A FUND:

    Operating cash funds are established in the name of the custodian of the operating cash fund, generally the Financial Officer. When a new custodian is appointed, the fund is transferred to him or her, and the account is reconciled.

    When managed through a checking account, a new account is established in the new custodian’s name at the designated depository bank. The old account at the depository is closed.

    Changes in custodian must be documented through written notice to the Associate Bursar and should include an account reconciliation, signed by both custodians. The Assistant Controller, University Financial Officers should also be copied.

    RESTRICTIONS:

    Operating cash funds are not to be intermingled with other funds or receipts from cash sales, nor are they to be used for cashing personal checks or for making personal advances or loans to employees.

    SAFEGUARDING CASH:

    It is the custodian's responsibility to make whatever provisions are necessary to safeguard the fund.

    Any amount of cash on hand that exceeds $1,000 must be maintained in an approved safe (fireproof, bolted to floor or immovable). Amounts of $1,000 and under must be maintained in a file safe or reinforced file cabinet with a pad lock and bar that secures all drawers. Cash should not be retained in desk drawers or standard file cabinets since they are easily accessed with nominal forcing or readily available keys.

    DISBURSEMENTS:

    All disbursements from the fund will be made by the custodian (or person(s) authorized by the custodian) and must have appropriate support as follows:

    Cash or a check is disbursed in exchange for Requests for Cash Advance, Requests for Salary Advance or Receipts for Petty Cash Expended.

    In addition, because of the distance from University Park Mailing Services, the Operating Fund at Non-University Park locations may be used to acquire a nominal supply of postage stamps from the local Post Office for official University business. (This is an exception to procedure #BS2008 University Mailing Services, concerning 'live postage.')

    RECORDS:

    Operating cash fund reconciliations, including bank checking account reconciliations for those managed through an account, will be prepared monthly and filed until reviewed by the Office of Internal Audit.

    REIMBURSEMENT OF A FUND:

    Reimbursement of the exact amount of expenditures should be requested by submitting a Special Request for Check (properly approved), with the supporting detail.

    In addition, if a travel advance was issued by the custodian, the advance should be properly accounted for in the Employee Reimbursement System upon settlement of the travel.

    INCREASING A FUND:

    A custodian may request that his or her operating cash fund be increased, either permanently (charging account 0207) or temporarily (charging account 0206), by submitting a Special Request for Check form, with off-path approval through the Assistant Controller with explanation of the reason for the increase in the form notepad. The Associate Bursar should also be copied on the form.

    DECREASING A FUND:

    If there is an excess of funds, the custodian will reduce the fund by:

    Depositing the amount of excess cash through a Report of Cash Receipts (ROCR), reducing the advance account 0207 or 0206 (as appropriate) for the named custodian. The Associate Bursar must be copied on the ROCR to assure proper credit to the custodian. The name of the custodian should be clearly indicated in the notepad of the form.

    FURTHER INFORMATION:

    For questions, additional detail, or to request changes to this policy, please contact the Office of the Corporate Controller.

    CROSS REFERENCES:

    FN04 - Petty Cash and Change Funds


    Effective Date: August 12, 2014
    Date Approved: August 12, 2014
    Date Published: August 12, 2014

    Most recent changes:

    Revision History (and effective dates):

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