PETTY CASH

Petty cash allows you to make small purchases or reimbursements, in cash, for items such as stamps, office supplies, parking, etc.

The fund should be enough to cover petty cash expenditures for about a month. If it is too small you will have to constantly replenish the funds, and if it is too large it means you have cash on hand which could be more safely kept in your bank account / Cash Box. The petty cash fund should be kept in a locked box or drawer

Management recommend that only one person, called the custodian, have access to this cash, and that person be responsible for all petty cash activity. To disburse petty cash funds, the organization will need to buy or develop petty cash vouchers for documenting each transaction, and determine who in the organization can approve petty cash payments. Petty cash must approve by department heads or the petty cash custodian.

CUSTODIAN GUIDELINES/REQUIREMENTS/CONTROLS

1.       Petty Cash Funds shall be used for CAI business purposes only.

2.       Funds must be safeguarded at all times. They should never be left unlocked and/or unprotected during working hours, and must be locked in a safe or otherwise safely and properly secured during non-working hours.

3.       A fund should be counted and reconciled by the fund custodian regularly. This must be done, at a minimum, weekly, although it is recommended that this occur daily.

4.       Petty Cash Funds should not be commingled with any other funds such as other petty cash/change funds or private/personal funds.

DOCUMENTATION & USES OF PETTY CASH

All petty cash transactions must have adequate support which substantiates (1) what was purchased, and (2) that payment was made. A detailed listing of each item purchased must be provided, and the original paid invoice/ receipt attached to the Cash Reimbursement Request form. Photocopies or faxes of invoices/receipts are not acceptable

1. Enter the amount of the total purchase.
2. Enter a detailed description of the purchase.
3. The person receiving the cash advance or reimbursement must sign.
4. The custodian is to enter the account number to be charged and sign  the form.

Petty Cash Safeguard

•                      The petty cash fund should be kept in a locked, secure place.

•                      Access to the petty cash fund should be restricted to the custodian and a back-up person.

•                      Petty cash should be disbursed only by the custodian (or a back-up person in the custodian's absence).

•                      Original receipts should be required in order to disburse petty cash.  Receipts should be maintained in the petty cash fund box for reconciling.

•                      The person to be reimbursed should indicate on the original receipt what was purchased (if not obvious on the receipt), the business purpose, and account and fund to be charged.

•                      The original receipts should be approved and signed by an appropriate, authorized individual, such as the supervisor of the person to be reimbursed.

•                      The petty cash fund should not be used for personal expenses, personal loans, or the cashing of personal checks.

•                      The Custodian should be responsible for regularly reconciling the petty cash fund.  (The sum of cash plus original receipts plus any outstanding reimbursements should equal the full, original amount of the fund.)

•                      Requests for closing a petty cash account should be made timely.  The Accounting Services Department performs a fortnightly written confirmation of the petty cash account balances. 

Petty Cash Internal Controls Checklist

The following questions reflect common internal accounting controls related to petty cash. You may wish to use this list to review your own internal accounting controls and determine which areas require further action.

• • Is an imprest petty cash fund maintained for payment of small, incidental expenses?
  • Is there a limit to the amount that can be reimbursed by the petty cash fund?
  • Is supporting documentation required for all petty cash disbursements?
  • Is a petty cash voucher filled out with supporting documentation, name of person being reimbursed, and proper authorization?
  • Is access to petty cash limited to one person who is the fund custodian?
  • Are unannounced counts of petty cash made by someone within the agency other than the fund custodian?