Procedure No.:   41.122

Page No.:        1,2,3,4, and 5 of 5

Date Issued:     11/01/00

Issued By:       D. Siemer

PURPOSE:

To provide departments with procedures and guidelines for using the petty cash fund in the Bursar's Office and in establishing, operating, and maintaining departmental petty cash and change funds. All purchasing and other policies regarding expenditures apply to petty cash purchases.

POLICY:

Definitions

A.    Petty Cash Fund - a set amount of money held by a department and used to make small, incidental purchases (for emergencies and purchases requiring cash) of not more than $50 from a local vendor where the normal route of payment is not cost effective or appropriate.

B.    Change Fund - a set amount of money used by a department to make change for customers who are purchasing goods or services. The selling of such goods or services must have been previously approved through appropriate channels.

C.    Fiduciary - the department head or budget unit manager who is authorized to approve expenditures from the department's account(s)

D.   Custodian - the department employee who is appointed to operate and maintain the fund (e.g. a senior secretary or administrative assistant)




General Guidelines

A.   Departments can either use the petty cash fund in the Bursar's Office (best for infrequent use) - see Section III below, or establish their own Ð see Section IV below

B.   It is the responsibility of the employee making the purchase to inform vendors of Ohio University's sales tax exempt status.

C.   An Ohio University Purchasing Card is a preferred alternative to a petty cash fund. Purchasing card information can be found at the following web site: (http://www.finance.ohiou.edu/pcard/index.html)

D.   Petty cash reimbursements for expenditures that are classified in object code series 1000, 2000, 4000, and 9000 are prohibited.




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Use of the Bursar's Petty Cash Fund

A.   The Bursar's Petty Cash Fund is used for reimbursement to an individual who has used personal funds to purchase an item for University use. A Petty Cash Voucher form must be taken to the vendor-site, and must be completed at the time of the purchase. The approved form, along with an original itemized receipt, is submitted to the Petty Cash window in Chubb Hall for reimbursement.

B.   The Bursar's Office will submit a request to Accounts Payable on a regular basis to reimburse their fund. Each voucher form and original receipt will be attached to the request.

Establishment of Departmental Petty Cash/Change Funds

A.   A completed "Establishment of a Petty Cash/Change Fund" form (available from Procurement Services) must be completed and sent to the Controller in the Vice President for Finance Division.

B.   The persons who will serve as fiduciary and custodian must be designated in advance of the fund being distributed.

C.   Any physical safeguards must be in place before the fund is released to the department.

D.   Once the above has been completed, the fund will be released to the department via a check (in care of the custodian) from Accounts Payable that may be cashed at the Cashier's Window in the Bursar's Office.

Operation of Departmental Petty Cash/Change Funds

A.   Petty Cash Fund
1. The total of cash and receipts for purchases in these funds should remain at the established amount at all times.

2. The fund should be balanced every time it is used, but at least once per week.

3. This fund should only be used for making purchases. It shoulnever be used for receiving revenues, paying for services, cashing checks, giving loans, or for travel advances.

   
   

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   a.   Payment from a petty cash fund for services rendered requires prior approval by the Controller and the Director of Purchasing.

4. Petty cash funds can be replenished by submitting a Request for Payment with receipts attached to Accounts Payable (be sure to specify which account to charge for each purchase). Accounts Payable will issue a check to the department in the custodian's care that can be cashed at the Cashier's window in the Bursar's Office.

   a.  Departments may choose to use the Petty Cash Voucher Petty Cash Voucher form to aid them in operating their fund. This form is not required documentation for the Request for Payment.

5. The fiduciary has sole responsibility for this fund. Any unexplained discrepancies will be resolved through the fiduciary.

B.   Change Fund

1. The cash in these funds should remain at the established amount at all times.

2. The fund should be balanced every time it is used, but at least once per week.

3. This fund should never be used for making purchases, cashing checks, giving loans, or for travel advances.

4. The fiduciary has sole responsibility for this fund. Any unexplained discrepancies will be resolved through the fiduciary.

C.   Each petty cash and each change fund should be segregated from other cash funds. These funds are intended to stand-alone; do not combine with other cash.

Maintenance

A.   All funds should be balanced on a weekly basis and records kept.




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1. Formula for balancing petty cash funds (line A should equal line E, otherwise there is a shortage/overage in the fund):

   A. Established amount:
   B. Cash on hand:
   C. Receipts on hand:
   D. Replenishments in transit:
   E. Total (B+C+D):
   F. Overage (>A)/(Shortage)(<A)

2. Formula for balancing change funds (line A must equal line E, otherwise there is a shortage/overage in sales):

   A. Established amount:
   B. Cash on hand:
   C. Checks on hand:
   D. Sales:
   E. Total (B+C-D):
   F. Overage (>A)/(Shortage)(<A)

Note: any overage/shortage should be reflected in the department's daily sales deposit. This is accomplished by either decreasing or increasing the daily deposit amount by the amount of the shortage or overage. A log should be kept of daily shortages and overages. The change fund should remain at the established amount.

B.   The custodian is responsible for the operation and maintenance of the fund and for reporting any unusual activity to the Controller or Internal Audit Department.

1. A back up custodian is recommended for times when the custodian and fiduciary are unavailable.

2. The back up custodian's duties and responsibilities are the same as the custodian's when he/she is unavailable.

C.   The fiduciary is responsible for insuring that the funds are physically secure, reporting any unusual activity to the Controller or Internal Audit Department, and ultimately has the financial responsibility for them.

D.   The fiduciary and custodian (back up when not available) should be the only persons with access to the fund.




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E.   Any changes to an existing fund (including custodian, fiduciary, location of fund, increase/decrease of amount, etc) should be submitted to the Controller in the Vice President for Finance Department on an "Establishment of a Petty Cash/Change Fund" form marked "Established fund".

F.   The Vice President for Finance (or his/her designee), the Controller (or his/her designee), and the Internal Audit Department reserve the right to inspect and audit any petty cash or change funds at any time.

Dick Piccard revised this file (http://www.ohiou.edu/policy/s41-122.html) on September 13, 2005.

Please E-mail any comments or suggestions to "polproc@www.ohiou.edu".