PROCEDURE CR2013 - OPERATING CASH FUND UNIVERSITY PARK FINANCIAL OFFICERS
Systems and Procedures
A Division of The Corporate Controller's Office
IN

Procedure CR2013 - Operating Cash Fund University Park Financial Officers

Office of the Corporate Controller

Policy Steward facilitating procedure: Associate Vice President for Finance and Corporate Controller

Table of Contents:


GENERAL:

Operating cash funds will be established for Financial Officers as imprest funds. They will be used for Petty Cash requirements, permanent and temporary Change Funds, advances up to $200 for faculty and staff travel and optional reimbursement for faculty and staff Travel Support Forms and emergency advances for employees who have earned but did not receive their pay on the scheduled date. Additional information on Operation Cash Funds is available in University Policy FN05 .

PROCEDURE:

OPERATING CASH FUND

General

Financial Officer Operating Cash Funds and the amounts of those funds will be determined by the Financial Officer with approval by the Director of Financial Officers. Operating Cash Funds will be established by University check through a Special Request for Check ( SRFC) .

As an imprest fund, Operating Cash Funds are established on a permanent basis until the need for such funds no longer exists. A Financial Officer should periodically review the adequacy of the permanent advance and take appropriate action to increase or decrease it.

The custodian of an Operating Cash Fund will be the Financial Officer or a temporary custodian appointed on an interim basis. The Financial Officer may assign funds to sub-custodians in areas remote from his/her office to be used as Petty Cash and Change Funds. However, the ultimate responsibility for these funds remains with the Financial Officer.

Operating Cash Funds are not be intermingled with other funds or receipts from cash sales (with the exception of change funds), nor are they to be used for cashing personal checks or for making personal advances or loans to employees.

Each Financial Officer shall be responsible for safeguarding all cash funds entrusted to him/her and will maintain a safe for this purpose. That responsibility includes ensuring that the use of the fund is in compliance with existing Policy FN01 and procedures. Operating Cash Funds will be subject to audit, examination and review to verify the accuracy of the transactions, and to determine whether or not the approved policies and procedures are being followed. In order to minimize potential losses, it is recommended that Financial Officers keep cash on had as low as possible by preparing and cashing reimbursement checks as needed.

Cash Advances for Change Funds and Petty Cash Funds may be issued to sub-custodians in accordance with instructions contained in Policy FN04 and Policy FN05 of the University Policy Manual. Sub-custodians will be responsible for any funds assigned to them by the Financial Officer. That responsibility includes safeguarding the funds and ensuring that the use of the fund is in compliance with existing policy and procedures. These responsibilities will remain with the designated sub-custodian until the funds are returned to the Operating Cash Fund, or a new sub-custodian is appointed.

Increasing an Operating Cash Fund

A Financial Officer may request that the Operating Cash Fund be increased, either permanently or temporarily, by submitting a Special Request for Check ( SRFC ). The SRFC must be forwarded to the Assistant Controller, University Financial Officers for approval. If the request is for a permanent increase, the account number 0207 must be entered in the "fund" column and justification must be included in the notepad to support the need for additional funds. If the request is for a temporary increase, the account number 0206 must be entered in the "fund" column and an explanation for the increase must be entered in the space provided on the Special Request for Check. In addition, it must be clearly indicated that the need is temporary and must include a settlement date for return of the funds.

Decreasing an Operating Cash Fund

If an excess is found in an Operating Cash Fund, the excess portion of the fund should be returned. An Operating Cash Fund permanent or temporary advance may be decreased by depositing the excess portion of the advance directly to a University designated bank. A Report of Cash Receipts ( ROCR ), crediting the "fund" column with the appropriate account number 0206 (temporary) or 0207 (permanent).

Changing Custodians

When a successor to a Financial Officer position is named, the new custodian will immediately perform a reconciliation ( Exhibit "A" ) of the Operating Cash Fund and, within two weeks, submit a reconciliation of the Operating Cash Fund to the Director of Financial Officers. The new custodian will be responsible for verifying the accuracy of all items in transit, outstanding advances for travel, and sub-custodian Petty Cash Funds and Change Funds. It is not necessary for the new custodian to reissue the Request for Cash Advance forms prepared by previous custodians for Petty Cash and Change Funds. Any discrepancies must be reported immediately to the Director of Financial Officers. When the reconciliation is completed, the new custodian must have the old custodian sign it, if possible, acknowledging its accuracy and then submit a letter with a copy of the reconciliation to the Director of Financial Officers requesting that the Operating Cash Fund be transferred to his/her name for the amount shown on the reconciliation. The Director of Financial Officers will forward a coy of the letter to the Bursar who will in turn transfer the account from the old to the new custodian. Checks received for reimbursement in transit must be endorsed by the former custodian, unless he/she has already vacated the position; in which case the reimbursement checks payable to the old custodian will be voided and returned to Accounting Operations. A Special Request for Check will be prepared for a replacement check payable to the new custodian.

Should there be a lapse between the termination of the old custodian and the arrival of the new one, the Director of Financial Officers has the option of either recalling the Operating Cash Fund until a new custodian can be assigned the responsibility, or assigning the responsibility to a temporary custodian. Should the recall option be chose, the Director of Financial Officers is responsible for seeing that a reconciliation is conducted before the old custodian receives his/her last pay check. If a temporary custodian is assigned, a reconciliation and transfer of responsibility (as previously discussed) is to occur both at the time the temporary custodian assumes the responsibility from the old custodian, and when the new custodian assumes the responsibility from the temporary custodian.

PETTY CASH FUNDS

General

The Penn State Purchasing Card should be used for all petty cash type purchases where possible.

Petty Cash Funds are intended to facilitate the purchase of low-cost supplies not available in General Stores. Normally, the total of any individual purchase from a single vendor should not exceed the amount as stated in Policy FN04 of the University Policy Manual. Unauthorized expenditures over the petty cash limit will be handled according to the Petty Cash Limit Guidelines.

Petty Cash Funds shall not be intermingled with personal or other University Funds, nor are they to be used to cash personal checks or to make cash advances to employees. All Petty Cash Funds held by sub-custodians are to be audited at least annually, by the Financial Officer.

To establish a Petty Cash Fund at University Park, the employee desiring a Petty Cash Fund prepares a " Request for Cash Advance " form and submits it to the Operating Cash Fund Custodian for review and approval. After approval, the amount required is given to the Petty Cash Fund Custodian who is required to sign the Request for Cash Advance in the space provided to acknowledge receipt of the cash. The Request for Cash Advance is retained and filed by the Operating Cash Fund Custodian until the Petty Cash Fund is closed.

When making a Petty Cash purchase, the University employee making the purchase secures from the supplier a receipt (cash register or other type of receipt) for the item purchased. The employee must then document the expenditure by completing a " Receipt for Petty Cash Expended ." The employee attaches the receipt from the supplier, which supports the expenditure, to the Receipt for Petty Cash Expended. The receipts are held by the Petty Cash Fund Custodian until the fund is to be reimbursed.

The Receipts for Petty Cash Expended, properly completed and approved, along with supporting vendors receipts which substantiates the total amount of the petty cash reimbursement request, must be submitted intact by the Petty Cash Fund Custodian to the Operating Cash Fund Custodian.

The Operating Cash Fund Custodian reviews and approves the petty cash reimbursement request and reimburses the Cash Fund Custodian for the approved amount. Operating Cash Fund reimbursement is obtained by processing the Special Request for Check ( SRFC ).

Increasing, Decreasing, or Closing a Petty Cash Fund

Refer to Policy FN04 in the University Policy Manual for procedures to increase, decrease, or close a Petty Cash Fund.

Changing Petty Cash Fund Custodians

A Petty Cash Fund is retained by the custodian until a successor is appointed or the need for the fund no longer exists. When a new Petty Cash Fund Custodian is to be appointed, the Petty Cash Fund will be transferred from the present custodian to the new. To do so, a Request for Cash Advance form is prepared for the new custodian in the amount of the Petty Cash Fund in the same manner as establishing a new Petty Cash Fund. The new custodian counts the cash and verifies the amount of the Petty Cash Fund for which he/she is assuming responsibility. The signed Request for Cash Advance is taken to the Operating Cash Fund Custodian by both the present and new Petty Cash Custodians. The Operating Cash Fund Custodian removes the file and gives the former custodian the original Request for Cash Advance in return for the new advance form from the new custodian.

OBTAINING TRAVEL ADVANCES

General

Travel advances may be authorized at the discretion of the Financial Officer up to a daily maximum of $50. Advances less than or equal to $100 will be issued only by the FO. Advances of $100.01 - $200 will be issued in cash via either the FO or by SRFC at the discretion of the FO. Advances greater than $200 must be requested on the SRFC.

See Policy TR02 in the University Policy Manual for further information concerning travel advances.

Advances of $200 or Less

To request a travel advance of $200 or less from the Financial Officer's fund, the employee completes the Request for Cash Advance. The Financial Officer gives the cash to the employee and files the Request for Cash Advance. The FO may require that advances of $100.010$200 be issued by Special Request for Check ( SRFC ).

Advances over $200

Requests for travel advances in excess of $200 are submitted by Special Request for Check (SRFC). The check should be made payable to, and include the Social Security number of, the employee requesting the advance. In addition:

  1. It will be the Financial Officer's responsibility to ensure that no additional advances are issued to the employee until the present advance is settled, and to see that the advance is settled by the settlement date stated on the Special Request for Check.
  2. Before advances are issued, the Financial Officer must ensure that proper approval has been given in accordance with existing travel regulations (see the Travel Section of the Policy Manual).
  3. Depending on the instructions to Accounting Operations on the Special Request for Check form, the check for the travel advance is made available to the employee, or to the Financial officer who issues it to the employee.

Multiple Advances

Circumstances may arise where it is necessary to issue a second advance before a prior advance is completely settled. When that happens, the Financial Officer will require the employee to explain in writing why the first advance is not settled. The explanation should be stated on either the Request for Cash Advance or the Special Request for Check (SRFC).

SETTLING TRAVEL ADVANCES

General

When settling a travel advance, the Financial Officer or a member of his/her staff reviews the employee's Request for Cash Advance and verifies the amount of the advance as listed on the Travel Support Form. The Financial Officer, or a member of his/her staff, will verify the accuracy of the Travel Support Form and ensure that all required documents are attached before processing. Occasionally, cash advances are partially settled before the due date. When this happens, the Financial Officer will post the partial settlement to his/her records to show the amount of the partial settlement and the remaining balance.

The Financial Officer must retain a copy of the Travel Support Form in his/her pending file until reimbursed on any expense account for which he/she is the payee.

Advances Issued from the Operating Cash Fund

When Expenses are in excess of the Advance - The Financial Officer has the option to reimburse the employee if there are funds available. Upon submission of a Travel Support Form to the Financial Officer for which a cash advance was issued, the Financial Officer will complete the applicable lower portion of the Request for Cash Advance acknowledging the receipt of the excess expense reimbursement. The completed form is then attached to the Accounting Operations' copy of the Travel Support Form.

To replenish the Operating Cash Fund, the Financial Officer enters his/her name as the "payee" on the Special Request for Check (SRFC).

If the Financial Officer does not reimburse the employee, he/she enters his/her own name as "payee" for the amount of the advance and the employee's name for the amount in excess of the advance. A check will be mailed to the employee for this excess, unless it is noted on the Travel Support Form instructing Accounting Operations to hold the check for the employee to pick it up.

When Expenses are less than the advance - The employee returns the unused portion of the advance to the Financial Officer. The lower section of the Request for Cash Advance is completed with the amount of the original advance and the amount of the unused advance. The difference between these amounts should equal the total expenses. The cash advance form is then attached to the Accounting Operations' copy of the Travel Support Form.

To reimburse the Operating Cash Fund, the Financial Office makes himself/herself the "payee" on the SRFC and forwards it to Accounting Operations.

Advances Issued by SRFC

When expenses are in excess of the advance - The Financial Officer has the option of reimbursing the employee for the expenses in excess of the advance from the Operating Cash Fund, or requesting a University check through Accounting Operations.

If a University check is being requested, the first "payee" on the Special Request for Check (SRFC) will be the employee, with the payee amount equal to the total expenses less the amount of the advance. The University advance is reimbursed by crediting 0206 for the amount of the advance and charging the appropriate account(s) for the full amount of expenses. The net amount on the budget distribution should equal the payee amount listed for the employee. A check will be mailed to the employee unless it is noted on the SRFC instructing Accounting Operations to hold the check for the employee to pick up.

If the Financial Officer reimburses the expenses in excess of the advance in cash, the same procedure is followed as above, but the Financial Officer makes himself/herself the first payee on the Special Request for Check (SRFC). For all reimbursements to Financial Officers as Operating Cash Fund custodians, the payee should coded as an Individual, not as an Employee. A University check payable to the Financial Officer for the amount reimbursed to the employee will replenish the Operating Cash Fund. Since the original advance was obtained by Special Request for Check (SRFC), Financial Officers shall obtain written acknowledgment for any additional cash the employee receives from him/her.

If the travel expenses incurred are less than or equal to the amount of the advance, the employee is listed as the payee on the SRFC, but the payee amount is zero (0). The amount of the travel expenses is charged to the appropriate account(s) and 0206 is credited for the amount of the advance used with a net result of zero (0) on the budget distribution. No check is issued to the employee, but the appropriate accounts are charged and the advance settled through the processing of the SRFC.

If the full advance was not used, the employee provides cash or a check payable to "The Pennsylvania State University" for the unused portion. A pre-numbered receipt must be issued for cash received. The original is given to the employee, once coy is filed with the Travel Support Form, and a copy is retained in numerical sequence for audit purposes. Funds received are deposited into a designated depository bank and an ROCR is prepared crediting 0206 for the amount returned. The details section of the ROCR must identify the person(s) and the Social Security number(s) who returned the advance (if multiple advance settlements are included on one ROCR, the amount settled by each person must also be listed). The amount of the advance settled through the SRFC and the ROCR must equal the total amount of the original advance.

Routing

Special Requests for Check (SRFC) route through the appropriate approval path. The SRFC document number is noted on the Travel Support Form, and it and all related receipts are held by the Finance Office. No back up is required to be sent to Accounting Operations for Special Requests for Check for travel. Once a week, the Travel Support Forms and receipts are sent as a batch to Accounting Operations for imaging.

Special Requests for Check (SRFC) for travel by budget executives are subject to additional approvals. Financial Officers will follow the Executive Expenditure guidelines provided by the Corporate Controller's Office to determine the appropriate routing.

Cash Advances Settled By Support Staff

The following procedure is to be used by those Financial Officers who use staff support in settling cash advanced:

  1. When University checks are received for reimbursement of the Operating Cash Fund, the accounting clerk is to pull the pending copy of the respective Travel Support Form and attach the copies to the remittance portion of the check.

  2. The Financial Officer is to verify that the remittance portion of the check and Travel Support Form agree and mark the Travel Support Form paid (may use stamp).

  3. The remittance portion of the check and Travel Support form marked paid are to be kept on file per the retention schedule.

PAYROLL ADVANCES

Occasionally, a new employee, because of unforeseen circumstances, does not receive his/her paycheck on the scheduled pay date. To satisfy our obligation to these employees, the Financial Officer may make arrangements to issue an advance to these employees prior to the next pay date by contacting the Director of Financial Officers. Advances may only be made if the appropriate paperwork for the appointment is completed. In no instances may an advance be given if an I-9 is not properly completed and on file. The Financial Officer will be responsible for ensuring that the advance is settled at the time the employee receives their first paycheck.

NOTE: It is not permissible to pay an employee prior to his/her scheduled pay date.

RECONCILIATION OF OPERATING CASH FUND

The Operating Cash Fund must be reconciled at least once a month. The Financial Officer may do this personally, or may assign someone in their office to reconcile the account, but the Financial Officer must review and approve the reconciliation if it is not done personally. Financial Officers are to keep a signed copy of the monthly reconciliation of the Operating Cash Fund on file for the current fiscal year plus one year.

Overages and shortages should not be carried forward within the Operating Cash Fund for more than two months. Shortages should be reimbursed through the Special Request for Check (SRFC) when obtaining reimbursement of the fund. If the shortage is in a sub-custodian fund, an account within the administrative area should be charged with the amount of the shortage. If the shortage is in the Operating Cash Fund, the Cash Over and Short Account (0752) should be charged. SRFCs that are reporting shortages of $20 or more must be forwarded to the Director of Financial Officers for approval. Overages should be turned in on a Report of Cash Receipts (ROCR) and credited to the Cash Over and Short Account (0752).

AUDIT COORDINATION - FINANCIAL AND PROCEDURAL

The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Audit when audits are being performed in the administrative area, as well as performing an annual audit that is submitted to the Assistant Controller.

RECORD RETENTION, DISPOSITION AND DESTRUCTION:

Record retention must be managed in accordance with Policy AD35 - University Archives and Records Management , and records schedules approved by the Records Management Advisory Committee, Office of General Counsel, and Office of the President. These retention requirements are the University's retention criteria, either derived or based upon federal, state, and local statute or regulations, industry standards, and business needs. Retention beyond recommended time periods require justifiable reasons and warrant review by the Records Management Officer or designee. All documents must be maintained in such a manner so as to provide ease of access for review, and to provide a suitable audit trail for all transactions.

Upon expiration of a stated period of time, documents must be discarded and/or destroyed, unless permission is granted by Records Management Officer or designee to retain the records. Archival records created more than 20 years prior to the current date must be reviewed before destruction. Units should also contact the University Archivist before discarding any document which may be of permanent or historical value to the University. To safeguard the privacy of individuals, documents that contain salary information, personally identifiable information (PII), or student records must also be shredded. See Policy AD53 - Privacy Policy and AD22 - Health Insurance Portability and Accountability Act for additional information regarding privacy and the protection of an individual's personal information. For documents that must be shredded, departments may arrange for Blue Bag service by contacting the Blue/White Shredding Program of the Office of Physical Plant. Exceptions to the practice are as follows:

Additional questions may be directed to the University Archivist or the Records Management Officer.

EXHIBITS:

CONTACT INFORMATION:

For questions, additional detail, or to request changes to this procedure, please contact the Assistant Controller/University Financial Officers.

CROSS REFERENCES:


Procedure Status:

Date Approved: January 17, 2000

Most recent changes:

Revision History (and effective dates:)