Procedure CR2045 - Operating Cash Fund - Non-University Park Locations (Excluding Hershey)
Office of the Corporate Controller
Policy Steward facilitating procedure: Associate Vice President for Finance and Corporate Controller
Table of Contents:
- OPERATING CASH FUND
- Establishment of a Fund
- Term of a Fund
- Custody of a Fund
- Safeguarding Cash
- Advances to Sub-Custodian
- Increasing an Operating Cash Fund
- Decreasing an Operating Cash Fund
- Changing Custodians
- PETTY CASH FUNDS:
- Increasing, Decreasing, or Closing a Petty Cash Fund
- Changing Petty Cash Fund Custodians
- OBTAINING TRAVEL ADVANCES:
- SETTLING TRAVEL ADVANCES:
- Advances Issues from Operating Cash Fund
- Advances Issued by SRFC
- Cash Advances Settled by Support Staff
- PAYROLL ADVANCES:
- RECONCILIATION OF OPERATING CASH FUND
- AUDIT COORDINATION - FINANCIAL AND PROCEDURAL
- RECORD RETENTION, DISPOSITION AND DESTRUCTION
- CONTACT INFORMATION
- CROSS REFERENCES
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 (at the discretion of the FO), athletic events (i.e. payment to referees), optional reimbursement for faculty and staff Travel Expense Accounts, and emergency advances for employees who have earned but did not receive their pay on the scheduled pay date. The Operating Cash Fund Checking accounts will also be used for the Bernreuter Emergency Loan funds. Additional information on Operating Cash Funds is available in University Policy FN05. Additional information on the Bernreuter Emergency Loan is available in the Procedure CR2017 - Bernreuter Emergency Loan Fund for Non-University Park Locations .
Financial Officer Operating Cash Funds and the amounts of those funds will be determined by the Financial Officer with the approval of the Director of Financial Officers. Operating Cash Funds established at locations other than University Park are operated as a non-interest bearing checking account in the custodian's name. The non-interest bearing checking account will be established at the University designated depository bank.
The checking account title should contain the custodian's name and address (office address may be used provided it contains no reference to campus or University). If the custodian prefers not to establish this account solely as a personal account, it may be established as "Operating Cash Account, John Jones, Custodian." If the custodian does not wish statements and canceled checks mailed, the custodian is to instruct the bank to hold the checks for pick-up at the bank.
The bank signature card should show this title and two to three signatures for authorization to withdraw funds from this account. The signatures are the Custodian and one or two University employee(s) designated by the Custodian to sign checks in his/her absence. The Financial Officer may select anyone as a co-signer, with the exception of the Director of Student Affairs or Financial Aid Officer because they approve the Bernreuter Loans.
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 to 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. Operating Cash Fund checks are not University checks, and should not be used in lieu of a Special Request for Check ( SRFC ), except in emergency purchasing situations.
Each Financial Officer shall be responsible for safeguarding all operating cash funds entrusted to him/her and will be provided a safe for this purpose. That responsibility includes ensuring that the use of the fund is in compliance with 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.
Cash Advances for Change Funds and Petty Cash Funds may be issued to sub-custodians in accordance with instructions contained in Policies FN04 and 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.
A Financial Officer may request that the Operating Cash Fund be increased, either permanently or temporarily, by submitting a Special Request for Check ( SRFC ) in accordance with OAS on-line instructions in IBIS. 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.
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 a portion of the fund directly to the University designated depository bank. A Report of Cash Receipts ( ROCR ) must be completed according to the OAS documentation on IBIS, and crediting the "fund" column with the appropriate account number 0206 (temporary) or 0207 (permanent).
When an Operating Cash Fund Custodian is changed, the Director of Financial Officers will request a reconciliation ( Exhibit "A") of the Operating Cash Fund and Operating Cash Fund bank account from the new custodian. The new custodian will be required to verify in the presence of the old custodian, if possible, all outstanding advances for petty cash, change funds, emergency loans, and travel. The new custodian must account for all items in-transit as well as outstanding checks drawn on the Operating Cash Fund. Any unlocated difference must be reported immediately to the Director of Financial Officers. When the old account balance has been verified, the old (or temporary) custodian will draw a check for any remaining balance for deposit to the new account.
A letter from the new custodian to the Director of Financial Officers must be submitted in duplicate. The letter will request the transfer of the Operating Cash Fund advance to the new custodian, and provide information as to the bank and account number of the new fund. A copy of the letter will be forwarded to the Bursar to transfer the advance.
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 chosen, 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.
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. 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 personal 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 a location other than University Park, the employee desiring
a Petty Cash Fund prepares a "
Request for Cash Advance
n accordance with instructions contained on page 1.03 of the General Forms Usage Guide
, and submits it to the Operating Cash Fund Custodian for review and approval. After approval,
an Operating Cash Fund check is prepared for the amount required. The check 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 funds. 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 Petty Cash Fund Custodian with an Operating Cash Fund check for the approved amount. Operating Cash Fund reimbursement is obtained by processing the Special Request for Check ( SRFC ).
Refer to Policy FN04 in the University Policy Manual for procedures to increase, decrease, or close a Petty Cash Fund.
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 reconciles 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 from the file and gives the former custodian the original Request for Cash Advance in return for the new advance form from the new custodian.
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 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.
To request a travel advance of $200 or less from the Financial Officer's fund, the employee completes the Request for Cash Advance in accordance with the instructions on page 1.03 in the General Forms Usage Guide. The Financial Officer gives an Operating Cash Fund check to the employee and files the Request for Cash Advance. The FO may require that advances of $100.01-200 be issued by SRFC .
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:
- 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.
- 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.)
- Depending on the instructions to Accounting Operations on the Special Request for Check ( SRFC ), the check for the travel advance is made available to the employee, or to the Financial Officer who issues it to the employee.
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 why the first advance is not settled. The explanation should be stated on the Request for Cash Advance or the Special Request for Check.
When settling a travel advance, the Financial Officer or a member of his or her staff views the
Request for Cash Advance
and the Special Request for Check to verify the amount of the advance as listed on the Travel
Support Form (
page 7.1 in GFUG)
. The Financial Officer, or a member of his/her staff, will verify the accuracy of the Travel
Support Form and ensure that all required receipts 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.
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 . The employee signs 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 otherwise noted.
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 Officer makes himself/herself the "payee" on the Special Request for Check ( SRFC ) and forwards it to Accounting Operations.
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 -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 -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, one copy 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 their 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.
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.
The following procedure is to be used by those Financial Officers who use staff support in settling cash advances:
- 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.
- 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). The Financial Officer should use the same copy for all pending Travel Support Forms for control purposes.
- The remittance portion of the check and Travel Support Form marked paid are to be kept on file per the retention schedule at the end of this procedure.
Occasionally, a new employee, because of unforeseen circumstances, does not receive his/her initial 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.
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 and credited to the Cash Over and Short Account (0752).
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 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.
- Documents subject to a Legal Hold (see AD35, Legal Hold). A legal hold will remain in effect until it is released in writing by the Office of General Counsel.
- Documents under audit or review, either internally or externally. The retention period extends until released by the Corporate Controller's Office. The Financial Officer will be notified regarding any accounts which are under audit; the Financial Officer will be responsible for contacting the department.
Additional questions may be directed to the University Archivist or the Records Management Officer.
For questions, additional details, or to request changes to this procedures, please contact the Associate Controller.
- Policy AD22 - Health Insurance Portability and Accountability Act
- Policy AD35 - University Archives and Records Management
- Policy FN01 - Processing Cash Revenues
- Policy FN04 - Petty Cash and Change Funds
- Policy FN05 - Operating Cash Funds
- Policy TR02 - Penn State Travel Policy
- Procedure CR2017 - BERNREUTER EMERGENCY LOAN FUND FOR NON-UNIVERSITY PARK LOCATIONS
- Blue/White Shredding Program
Date Approved: 01-17-00
Most recent changes:
- Revision 3. Dated 10-04-99
- Revision 2. Dated 04-11-90
- Revision 1. Dated 05-11-88
- Original. Dated 03-24-78