Policies and Procedures

Policy

Petty Cash Funds

Effective
February 17, 2012
Category(ies)
Finance and Administration
Approval(s)
President and Vice Presidents: February 17, 2012
Steward(s)
Director of Business Services
Past Version(s)
Petty Cash Funds (archived February 2012)

Purpose/Rationale

  • To set guidelines for the establishment and responsible maintenance of petty cash and change funds.

  • To ensure that personnel understand their responsibilities in establishing petty cash and change funds and in handling funds appropriately.

Applies to

All college staff and faculty

Policy

1. Administrative units may maintain two types of petty cash funds according to the State Administrative and Accounting Manual (SAAM) 85.50-70 and RCW chapters 43.88.195 and 42.26:

  • Petty cash (Imprest) funds - used to make payments when issuing a check is not practical, economical, or timely.

  • Change funds - used solely for making change in across-the-counter cash transactions.

2. The Cashier’s Office maintains the college’s central petty cash fund and change fund.

3. A number of departments throughout the college maintain other petty cash and /or change funds.

Establishing a departmental petty cash or change fund

4. Before requesting the establishment of a petty cash fund or change fund, or increasing the amount of an existing fund, the responsible administrator will ascertain that the goods or services to be purchased cannot be obtained in a timely manner using a College P-Card or other standard Purchasing procedures.

5. To request a petty cash fund or change fund, the administrator will send a memo to the Director of Business Services at least ten days in advance of the requested opening of the petty cash fund.

  • The memo must include the following information:

1. Purpose of the fund.

2. Amount of cash needed (usually a one-month supply) with an explanation as to why the amount is necessary (such as frequency of use).

3. Name of the custodian or person who will be responsible for the fund.

4. Name and organization code of the department that will assume responsibility for the expenditures.

5. Security procedures and facilities.

6. Specific location of the funds including building and room number.

  • Requesting a change fund will require establishing a cash collection point as outlined in the college’s Cash Handling Policy

6. The Director of the Business Services will notify the administrator if the request has or has not been approved.

  • If approved, the Cashier's Office will issue a check.

  • The assigned custodian will sign a Petty Cash Assignment form when the check is picked up.

  • If there is a change in the custodian, the administrator will send a memo to Business Services and the new custodian must sign a new Petty Cash Assignment form.

  • The new custodian should insure that the fund is replenished to the original amount before accepting it.

7. Business Services will carefully monitor the use of petty cash funds and change funds to ensure that only appropriate and legitimate purchases are reimbursed from a fund.

Unauthorized uses of petty cash include the following:

  • Entertainment expenses
  • Fines
  • Honoraria
  • Stipends
  • Personal items
  • Personal services
  • Travel expense reimbursements

8. Staff should use the college’s procurement VISA card for the majority of purchases formerly reimbursed through petty cash.

9. Petty cash fund custodians will reimburse and expenditure under $100 via petty cash.

10. The Cashier’s Office will reimburse expenses over $100 via A-19, except travel reimbursements.

11. The Cashier’s Office will approved advances when the college procurement card cannot be used and the items are not available through regular college purchasing channels.

The Cashier’s Office will issue a check for approved advances over $100.

12. The fund custodian shall place p etty cash funds exceeding one hundred dollars in a checking account at a local bank unless there is a demonstrated need to maintain cash in the department and there are adequate security facilities available.

  • The fund custodian shall notify the Business Services of the bank name, location, and account number when the account is opened.

  • The account should be titled "TESC (name of department) Petty Cash Account".

  • The fund custodian is responsible for ensuring that the bank statement is reconciled each month.

  • An employee other than the custodian should reconcile and sign the bank statement (SAAM 85.50.50e).

  • The fund custodian should safeguard petty cash by placing it in a secure location such as a safe, vault or locked drawer.

  • The fund custodian shall not commingle petty cash funds and associated documents with other funds.

  • Fund custodians must report missing petty cash to the Director of Business Services, and must notify Campus Police if theft is suspected. All suspected thefts are to be treated confidentially since an investigation may be ongoing.

13. Fund custodians shall use the following procedures for central petty cash processing:

  • The person requesting reimbursement/advance fills out a Petty Cash Voucher.

  • The fund custodian submits the Petty Cash Voucher with receipts, if applicable, to Business Services-Accounting for review and approval.

  • Accounting forwards approved Petty Cash Voucher to the Cashier’s Office.

  • Requestor picks up cash/check at the Cashier’s Office.

  • If a cash advance is issued, requestor must settle the advance within five working days with Accounting.

  • The accounting manager must approve any exceptions.

14. Fund custodians must use the following procedures for departmental petty cash processing:

  • The person requesting funds describes the nature of the purchase to the fund custodian.

  • If the custodian determines that the planned purchase is appropriate, the custodian will provide the individual with a check or cash for the amount of the purchase.

  • The custodian prepares a brief memo to be filed with the fund, which includes the date, amount disbursed, name of person receiving the funds, nature of purchase, and the custodian's initials.

  • After the purchase is completed, the person making the purchase will give the custodian the receipt for the purchase and any change. The receipt must be signed by the purchaser and must include a description of the item listed.

  • At any time, the cash, receipts, and cash outstanding (as documented by the file notes) must equal the original amount issued by the Director of Business Services.

  • The Director of Business Services and State of Washington auditors may audit petty cash funds without notice.

15. Fund custodians should replenish departmental petty cash funds monthly, and at the end of the fiscal year.

  • To request reimbursement of petty cash expenditures, fund custodians should submit a Washington Invoice Voucher A-19 to Accounts Payable summarizing all expenses.

  • Fund custodians should arrange receipts in chronological order and attach them to the A-19.

  • Fund custodians need to complete the voucher as follows:

1. List the name of the petty cash fund under "Vendor or Claimant".

2. Under “description”, type "To reimburse petty cash per attached receipts".

3. List receipts in chronological order on the invoice and indicate the date of purchase, check number or cash, vendor, item purchased, and receipt number.

4. Add all expenditures and indicate the total.

5. Show the organization and account codes that will assume the expenditure.

6. The fund custodian signs under "Prepared By".

7. The account administrator signs under "Organization Approval Signature".

  • Business Services requires approximately one week to process each request. When completed, the Cashier's Office will issue a check.

16. When a departmental petty cash fund is no longer needed, the fund custodian must process all outstanding receipts and return the total fund (in cash or check) to the Cashier's Office.

  • The Cashier's Office will need the organization code from which the fund was originally issued.

  • If a checking account was established, the fund custodian must close this account and notify Business Services.

17. The Director of Business Services may recall a departmental petty cash fund when no activity has occurred for a period of three months .