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Petty Cash
Fund Policy
Purpose
The Petty Cash
Fund Policy has been created to provide
guidelines for the appropriate establishment,
use, and accountability of such funds.
Procedures have been established to encourage
effective administration and internal control of
cash handling operations throughout the
University.
Summary
The majority of
petty cash funds are established to enable
departments to make small, emergency purchases
where a purchase order is not cost effective or
a purchasing card cannot be used. Other uses
include the establishment of change funds for
departments that collect cash receipts on behalf
of the University and require change to
appropriately complete the cash transactions.
The amount of the petty cash fund is
established at the time the fund is approved.
Expenditures must meet the legal requirements of
University funds and may not be used to
circumvent current purchasing procedures.
Any individual
handling university cash is responsible to Texas
Woman’s University for proper security and
accountability. Due to the personal liability
involved in performing cash handling functions,
it is important that only authorized employees
handle monies for university business.
Employees are required to appropriately
safeguard, account for and document all cash
maintained on behalf of the University. The
cash must be maintained in a secure, locked
device or some other location appropriately
approved by the Controller’s Office.
Applicability
This policy is
applicable to every University department,
administrative office, and affiliated
organization involved in handling any University
cash. Employees with any type of cash handling
function are required to be familiar with the
requirements of this policy.
Authority and Responsibility
Texas Woman’s
University has delegated the authority and
responsibility for establishing policies and
procedures for all cash handling activities to
the Controller’s Office. In carrying out this
duty, the Controller’s Office is responsible
for:
1.
Establishing and enforcing policies and procedures governing the
receipt, handling, custody, and disbursement of
funds.
2.
Requiring the establishment and maintenance of records accounting
for funds received and paid by the University.
3.
Performing periodic audits of departments with cash handling
operations.
4.
Establishing and authorizing banking depositories to be used for
University funds.
5.
Establishing and authorizing procedures for granting, maintaining,
and terminating departmental petty cash funds.
6.
Reconciling all petty cash funds on a monthly
basis.
Segregation of Duties
Cash handling
operations must be subject to daily supervisory
review and management. To minimize the
potential for mistakes or misappropriation of
cash, the segregation of cash handling duties is
recommended. The duties of collecting cash,
maintaining documentation, preparing deposits,
and reconciling records must be separated among
different individuals. In departments where the
separation of duties is not feasible, strict
individual accountability and thorough
management supervision and review is required.
Written
Departmental Procedures
In addition to
the cash handling procedures established in this
document, it is highly recommended that each
department that manages a significant amount of
cash, have its own specific procedures. Written
procedures should minimally include
authorization of person(s) to act as custodian,
guidelines for the safekeeping of funds,
procedures for usage of funds, steps for
reimbursement of funds, and procedures for
handling overages and/or shortages including
instructions on notifying the appropriate campus
authority in the event of a loss.
Safekeeping
Departments
handling cash are responsible for the
safekeeping of these University assets. The
following general guidelines must be followed to
maintain the integrity of the cash handling
process:
-
Unauthorized
persons are not allowed in areas where cash
is handled.
-
Doors must be
locked at all times in areas where cash is
handled. Safe doors should be kept closed
during working hours and locked at times
when it is not necessary to be in and out of
the safe.
-
Large sums of
cash must be counted and handled out of
sight of the general public.
-
Departments
must keep working funds to a minimum at all
times. Excess funds should be in a locked
device or deposited in the Bursar’s Office.
-
Cash must
NEVER be left unattended. This applies to
cash registers, desk tops, and cash
drawers. If an employee leaves his or her
work station for any reason, regardless of
how briefly, cash must be appropriately
secured in a locked place.
-
For overnight
storage and during other periods when cash
is not being used, cash must be kept in a
safekeeping device, either a safe or locked
container.
-
Under no
circumstance is an individual to keep
University cash with their own personal
funds, deposit University funds in a
personal bank account or take University
funds to one’s home for safekeeping.
Refunds
Refunds cannot be
made directly through the use of petty cash
funds, change funds, nor funds received from
cash receipts unless specifically authorized
by the Controller. All refunds must be
processed through appropriate procedures as
established by the Controller’s Office,
depending upon the type of transaction
involved. These funds are not to be used to
reimburse employees for out-of-pocket
expenditures.
Petty Cash Guidelines
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Adequate
receipts and documentation must be
maintained to support all transactions made
from the Petty Cash Fund.
-
Expenditures
must meet the legal requirements attached to
the source of University funds used to
establish the account.
-
The petty
cash fund must not be used to circumvent
University purchasing procedures.
-
The following
expenditures from petty cash accounts are
prohibited:
- Travel-related expenses (e.g.,
parking)
- Sales Tax
- Alcoholic Beverages
- Donations
- Tips or Gratuities
-
A petty cash
fund may be revoked at the discretion of the
Controller.
-
The amount of
the petty cash fund may be reduced or
increased at the discretion of the
Controller.
Duties of Petty Cash Custodian
Each petty cash
fund established is specifically assigned to one
individual who is designated as the fund
custodian. This individual should have exclusive
access to and control of the fund. In carrying
out the duties assigned, it is the custodian’s
responsibility to understand and follow the
procedures below:
1. Petty cash
funds must be properly safeguarded. The
custodian is personally responsible at all times
for the appropriate and adequate safekeeping of
these funds. The money should be kept in a
secured, locked location and must never be
commingled with an individual’s personal funds
or any other University funds. Only the
custodian and the department head should have
access to the keys or safe combination.
2. The
custodian is responsible for keeping accurate
records of the fund. A Petty Cash booklet,
available for purchase through the Bursar’s
Office, must be maintained. Each time monies
are withdrawn from the fund, a Petty Cash form
is to be appropriately completed. This form
shows the amount withdrawn, the individual who
has been given the money, the purpose, the date,
a signature of the individual who has the money,
and custodian approval.
3. Once a
purchase has been completed, the individual must
return the paid sales receipt and any change to
the custodian. The Petty Cash Receipt form
should be attached to the sales receipt and
maintained in the safekeeping area for proper
accountability of the funds. Please note, the
sales receipt should always include the vendor’s
name. Adding machine tapes and scrap pieces of
paper will NOT be accepted as proper
documentation.
4. Custodians
are required to reconcile daily, weekly, or
monthly, depending upon the amount of activity
involved and the dollar amount of the fund. The
Petty Cash Reconciliation Log
offers the recommended format for performing the
reconcilement.
5. The
custodian must maintain appropriate records on a
daily basis, as this petty cash fund is subject
to audits at any time by the Controller’s
Office, the Internal Auditors, and State
Auditors.
6. The
custodian will be personally accountable for the
Petty Cash Fund until all of the funds and/or
receipts have been submitted to the Controller’s
Office and the account closed.
Establishing a Petty Cash Fund
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Complete a
Petty Cash Account Certification Form.
This form identifies the type of petty cash
account requested and other necessary
information such as custodian, requested
amount, and departmental account number.
-
Forward the
certification form to the Controller's
Office.
-
Once the form
has been reviewed and approved by the
Controller’s Office, a check will be issued
to the custodian to establish the petty cash
fund.
-
The custodian
will be notified when the check is available
for pick-up.
Replenishing a Petty Cash Fund
Reimbursements
should be requested as needed; however,
departments are required to replenish the fund
by August 15th of every year. The
custodian must complete the
Petty Cash Reimbursement Request
form,
attach all receipts, and forward to the
Controller’s Office on the TWU Campus in
Denton. At that time, the receipts will be
audited, expenditures will be recorded, and a
check will be issued to the custodian for the
amount of the receipts.
Changing the Custodian
To change the
custodian on a departmental petty cash fund, the
department supervisor must submit an updated
certification form to the Controller’s Office
with a memo stating the reason for the change.
Closing a Petty Cash Fund
If it is
determined that an existing petty cash fund is
no longer needed the custodian must close the
fund. The remaining cash, a
Certification of Closure,
and all receipts should be taken to the Bursar’s
Office for deposit. Contact the Controller’s
Office to obtain the appropriate account number
before the deposit is made. Supporting
documentation will be forwarded to the
Controller’s Office by the Bursar for
reconciliation.
Overages and Shortages
Both overages
and shortages should be noted and tracked by the
custodian and then reviewed and certified by a
department supervisor. Significant amounts
should be immediately reported to the Department
Head and the Controller’s Office. If there
appears to be a growing pattern or anything
unusual or strange about the overages and
shortages, that information must be disclosed
immediately.
Approved
August 2007 by the Vice President of Finance and
Administration and Controller
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