Policy FN04 PETTY CASH AND CHANGE FUNDS

Policy Steward:  Office of the Corporate Controller

Contents

  • Purpose
  • Petty Cash Funds
  • Change Funds
  • Establishment and Term of a Fund
  • Custody of a Fund
  • Restrictions
  • Safeguarding Cash
  • Petty Cash Expenditures
  • Reimbursement of a Petty Cash Fund
  • Increasing a Fund
  • Reducing a Fund
  • Closing a Fund
  • Further Information
  • Cross References

  • PURPOSE:

    To outline the University's policy on petty cash and change funds.

    PETTY CASH FUNDS:

    Petty cash funds are used for minor local purchases and other expenditures (excluding postage stamps) which individually do not cost more than $50.00. Purchases of this nature are made only if it is not practical to obtain the items through the University purchasing procedures. A purchase (or purchases) from a single source that exceeds the $50.00 limit may not be broken up on separate receipts to avoid this limit. The University Purchasing Card should also be used for the convenience of minor purchases. (Refer to Policy BS14.)

    Because of the distance involved from Mailing Services, non-University Park locations may acquire postage stamps from their local Post Offices through the Petty Cash funds or Operating Cash funds, using the Receipt for Petty Cash Expended form. Refer to procedure BS2008, University Mailing Services, for information on postage stamps.

    CHANGE FUNDS:

    Change funds are used in cash register operations or other areas where cash collections take place and the need for having change-on-hand exists.

    ESTABLISHMENT AND TERM OF A FUND:

    A petty cash, change fund or other advance may be established on a long term or short term basis. Funds established for an indefinite period of time should be recorded as a long term advance.

    Funds may be established in two ways:

    1. Direct Custodian: As an advance to the petty cash or change fund custodian, who will obtain a temporary or long-term advance directly in their name, by processing a Special Request for Check, with appropriate approval from the custodian’s budget administrator and Financial Officer.  The SRFC should credit:
      1. Short Term (temporary) Advances - Account 0206
      2. Long Term (permanent) Advances - Account 0207
    2. Sub-Custodian: As a Request for Cash Advance through the Financial Officer’s Operating Cash Fund.  The custodian of the petty cash or change fund will be treated as a sub-custodian within the Operating Cash Fund.

    CUSTODY OF A FUND:

    The person to whom the petty cash or change fund is advanced is the custodian of that fund. These funds are non-transferable. Another custodian may be designated by:

    1. Direct Custody: Notifying the Bursar in writing to change the name of the custodian with approval from the Financial Officer, upon a full reconciliation of the change or petty cash fund signed by both the old and new custodians.  Alternatively, the old custodian can close out their advance and the new custodian can open a new advance.
    2. Sub-custodian: Old custodian would close out the Request for Cash Advance and the new custodian would establish a new Request for Cash Advance with the Financial Officer.

    RESTRICTIONS:

    Petty cash and change funds are to be kept intact and never intermingled. Such funds must be kept in separate bags or lockboxes.  They are not to be used for cashing employee paychecks or personal checks. Petty cash and change funds are not to be used for making any cash advances.

    SAFEGUARDING CASH:

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

    Any amount of cash on hand that exceeds $1,000 must be maintained in a vault or an approved safe (fireproof, bolted to floor or otherwise 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.

    PETTY CASH EXPENDITURES:

    Each petty cash expenditure must be supported by a Receipt for Petty Cash Expended.

    REIMBURSEMENT OF A PETTY CASH FUND:

    Whenever the cash balance is low in the fund, reimbursement of the exact amount of expenditures should be requested by submitting store / cash register receipts to support proof of purchase and completed Receipt for Petty Cash Expended forms, with a Special Request for Check (SRFC).

    INCREASING A FUND:

    1. Direct Custodian: A Special Request for Check (SRFC) must be processed to increase a fund, with approval by the Financial Officer.
    2. Sub-Custodian: The open Request for Cash Advancemust be settled and a new Request for Cash Advance must be processed for the new required total.

    REDUCING A FUND:

    A petty cash or change fund must be reduced when the total amount of the fund exceeds the requirements of the area to which the fund has been issued.

    1. Direct Custodian: A Report of Cash Receipts (ROCR) must be processed debiting the appropriate advance fund, with approval of the Financial Officer, with copy to the Associate Bursar and notation of the name of the custodian in the notepad.
    2. Sub-Custodian: The original request is settled through the Financial Officer and a new Request for Cash Advance is processed for the reduced amount.

    CLOSING A FUND:

    All petty cash and change funds, whether they have been established for a specific or indefinite period of time, must be returned when they are no longer needed.

    1. Direct Custodian: A Report of Cash Receipts (ROCR) must be processed debiting the appropriate advance fund with approval of the Financial Officer, with copy to the Associate Bursar and notation of the name of the custodian in the notepad.
    2. Sub-Custodian: The original request is settled through the Financial Officer.

    FURTHER INFORMATION:

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

    CROSS REFERENCES:

    FN05 - Operating Cash Funds


    Effective Date: August 12, 2014
    Date Approved: August 12, 2014
    Date Published: August 12, 2014 (Editorial change, January 18, 2016)

    Most Recent Changes:

    Revision History (and effective dates):

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