Policy Library

60.1.2 Petty Cash Procedure

Scope

These procedures provide guidance to units in establishing petty cash accounts, disbursing monies, reconciling accounts, requesting replenishment funds, and discontinuing accounts. They also provide guidance for employees in units without petty cash accounts seeking reimbursement for small expenses.

These procedures do not cover check requests or employee reimbursement of expenses made directly through Accounts Payable.

Procedures

If petty cash is determined essential for the smooth and efficient operation of a unit, it should be large enough to cover normal petty expenditures during a period of about six to eight weeks.

  1. Establishing a Petty Cash Fund

    A petty cash fund may be requested by individual units, or at the school or VP divisional level, and may be established in $50 dollar increments ranging from a minimum of $50 to a maximum of $500 per department. The maximum per school or VP divisional level shall be $3,000.

    To establish a petty cash fund, please follow the below procedures:

    1. Obtain and complete a Request for Petty Cash Requisition Form.

    2. Prepare a Check Request Form containing the following information:

        • The ?Pay To? line should be the designated petty cash custodian
        • Note: This person MUST be a full-time employee and should be available during normal business hours for disbursing funds and cashing replenishment checks. Petty cash custodians must attend a brief orientation in the Finance Office prior to receiving the Fund
        • ?Address? should be the office address where the petty cash monies will reside.
        • The ?Purpose? is ?To establish a petty cash fund? and should include a description of the predominant uses of the fund.
        • The ?Account? should be the budget account to which the replenishment of the fund will be charged.
        • The dollar amount of the petty cash fund requested (Keep in mind the 6-8 week guideline)
        • Approval by the authorized signer for the account which will be charged for replenishment.
        1. Forward the Request for Petty Cash Form and Check Request Form to the Office of Finance for approval. Each petty cash custodian shall be set up as a vendor in the accounts payable system. Once a request is approved, a check will be cut in the name of the custodian who may go to the Student Service Center to obtain the cash for the fund.

      1. Operating the Fund/Custodian?s Responsibilities

        The petty cash custodian is responsible for the safekeeping of their fund. The fund should be maintained in a secure place (locked drawer, cash box, cabinet or safe) and should be physically separated from other monies such as stamps or miscellaneous receipts. Petty cash funds are operated on an imprest basis. This means receipts are obtained for all disbursements and kept with the petty cash monies until replenishment is requested. The total of currency and receipts should at ALL times equal the full amount of the fund. All petty cash funds are subject to unannounced audits by the Controller?s Office or the Institute Auditor.

        For each disbursement, follow these procedures:

        1. Employee must provide a completed Petty Cash Reimbursement Form (PCRF)
        2. Review the form for completeness, in particular the description of the expense and the approval signature. Verify that the expense is reasonable, necessary and appropriate. (See Appendix for guidelines)
        3. Ensure the expense is adequately documented by a receipt from the person receiving the payment (such as cash register receipts, invoices, freight bills) Receipts and invoices should show the name of the company providing the good or service, (if not present, have the requestor write the company name and date of expense on the receipt) and MUST show proof of payment.

        OR,

        If the requestor is unable to furnish an appropriate receipt you may fill out a ?RECEIVED of PETTY CASH? form (www.xxx.xxx). This form needs to be signed by both the recipient and his/her supervisor.

        For all disbursements:

        1. NO reimbursement may exceed $60
        2. reimbursements are for authorized expenditures only, not for loans or advances
        3. forms must be signed by an authorized approver who is the employee?s supervisor or higher.
        4. reimbursements may not exceed $60 per day, per employee.

          Disbursements in excess of this amount must be submitted to Accounts Payable for reimbursement on a check request.

        5. ensure request represents a reimbursable expense (appendix A)

        The petty cash custodian is responsible for maintaining control of the petty cash fund at all times. The custodian should prepare a reconciliation of the fund periodically (but at least monthly) to ensure the integrity of the fund. If the fund is very active, the custodian may choose to perform reconciliations more frequently.

        The custodian is also required to immediately report to Campus Security, the Office of Finance, and the Institute Auditor, any suspected theft or fraud involving petty cash.

      2. Replenishing the Fund

        As the cash balance of the petty cash fund is reduced, follow the procedures for reimbursement as described below:

        1. Prepare a Check Request Form containing the following information:

          1. The ?Pay To? line should be the designated petty cash custodian
          2. ?Address? should be the office address where the petty cash monies will reside.
          3. The ?Purpose? is ?To replenish your unit petty cash fund per the attached receipts covering dates (provide range of dates)?
          4. The ?Amount? is the total of the replenishment requested. The total of all PCRFs, and associated receipts and/or completed ?RECEIVED of PETTY CASH forms, must equal the amount of the replenishment and should be stapled to the Check Request form
          5. The ?Account(s)? should indicate ?per attached PCRFs?
          6. Approval by the authorized signer for the account(s) which was charged for the petty cash fund.

        2. Forward the Check Request Form and associated PCRFs and receipts to the Office of Finance for approval. Once approved, a check will be cut in the name of the custodian who may go to the Student Service Center to obtain the cash for the fund.

      3. Transfer of Petty Cash Responsibility

        If a transfer of responsibility is warranted, please forward to the Controller?s Office a memo from the appropriate administrator, with signatures of the former custodian and the new custodian, and the breakdown of how the petty cash fund was turned over (amount of cash/amount of receipts).

        If a replenishment check is required in the absence of the petty cash custodian, the request should be made payable to another responsible person in the department with the following information typed in the lower portion of the description section of the Check Request Form: "For the petty cash account of (custodian's name.)"

      4. Closing out the Fund

        When a petty cash fund is no longer needed, follow the procedures as described below:

        1. Prepare a Check request Form containing the following information:

          1. The ?Pay To? line should be the designated petty cash custodian
          2. "Address? should be the office address where the petty cash monies will reside.
          3. The ?Purpose? is ?To close-out the petty cash fund, as per the attached receipts?
          4. The ?Amount? is the total of the replenishment requested. The total of all PCRFs and associated receipts and/or completed ?RECEIVED of PETTY CASH forms must equal the amount of the replenishment and should be stapled to the Check Request form
          5. The ?Account(s)? should indicate ?per attached PCRFs?
          6. Approval by the authorized signer for the account(s) which was charged for the petty cash fund.

        2. All unexpended cash and the Check Request Form should be hand delivered to the Controller?s Office for the purpose of depositing the unused cash and the processing of a journal entry for the receipts. Under no circumstances should cash be returned through the mail.
      5. Reimbursement procedures for employees of units without petty cash

        Individuals in units without a petty cash fund may submit their occasional petty cash reimbursement requests through the Office of Finance, which will approve requests for reimbursement through the Student Service Center. Petty cash reimbursements will be made available through the Student Service Center during posted operating hours. The Student Service Center will only reimburse properly completed, supported and approved Petty Cash Reimbursement Forms presented by members of Stevens? faculty or staff. Any PCRF submitted for reimbursement by a person other than a full-time Stevens? employee, or without proper approval, will not be honored. Employees requesting reimbursement should be prepared to show their Stevens identification upon request of the counselors.

        For each reimbursement request, follow these procedures:

        1. Prepare a Petty Cash Reimbursement Form (PCRF)
        2. Ensure the form is completely filled out. In particular, ensure the description of the expense is detailed and explains the business justification for the expenditure. Petty cash expenditures are still business expenses, they must be reasonable, necessary and appropriate.
        3. Ensure the expense is adequately documented by a receipt.(such as cash register receipts, invoices, freight bills) Receipts should show the name of the company providing the good or service, (if not present, write the company name and date of expense on the receipt) The receipt MUST show proof of payment.

          OR,

          If the employee is unable to furnish an appropriate receipt, a ?RECEIVED of PETTY CASH? form may be completed. This form needs to be signed by both the requestor and his/her supervisor and will only be accepted for amounts of $25 or less.

        4. Have the PCRF approved by the authorized signer on the account being charged for the expenditure. PCRFs with non-authorized approval signatures will not be reimbursed.

      APPENDIX A

      EXPENSES REIMBURSABLE THROUGH PETTY CASH

      Reimbursable expenses through petty cash include but may not be limited to

      1. postage
      2. delivery charges
      3. urgent need office or lab supplies
      4. tolls
      5. mileage or public transport fare under $10

      EXPENSES NOT REIMBURSABLE THROUGH PETTY CASH

      The following are business expenses that must be reimbursed processed through a Travel and Business Expense Report:

      1. travel (except for tolls, mileage or occasional public transport fare under $10)
      2. business meals
      3. cell phone bills
      4. internet/cable modem charges
      5. personal loans
      6. personal purposes (any event or expense not directly related to conducting Institute business, e.g. birthday cakes, flowers, gifts, etc. )
      7. office hospitality items (coffee, sugar, cookies, etc)

      Petty cash reimbursements, though small, represent payments for business expenses. The policy as to what constitutes appropriate business expenses. If an expense does not fall into a category above, or an individual is unsure of its appropriateness, the answers to the following questions will provide a guide.

      1. Is it the right thing to do?
      2. Do your actions CLEARLY comply with applicable restrictions (donor, sponsor, IRS, SIT)?
      3. Is this something your administrative assistant, friends, family, and Stevens' students would clearly see as a Steven?s business expense?
      4. Is it true, there would be no cause for concern if you read about this in the Stute? The Chronicle of Higher Education? The Wall Street Journal?
      5. If the answer to any one of the questions is ?No?, the appropriateness of the expense may be suspect and the individual should consult with someone before submitting the expense for reimbursement.