Petty Cash Fund Financial Procedure

General

Under certain circumstances, a petty cash fund (fund) may be authorized as a means of making limited  recurring or small emergency purchases for the University. Due to the decentralized  control and handling of purchases and cash, certain procedures and safeguards are essential and prescribed in this instruction.

Policies

1. A fund may be used for small repetitive or emergency purchases under $20 as required by a department and approved by the appropriate authority.
2. The Controller will receive and review requests for establishment of funds.
3. The size of the fund should be the minimum practical to meet requirements  and may not exceed $100.
4. Small repeat purchases from petty cash should not be used to avoid purchasing procedures where volume and bidding might secure lower prices.
5. A fund will be established only as outlined in this instruction. A fund will not be used for payroll or purchase from other University departments, to cash checks, make change, make cash advances (IOUs), etc. A fund which  is unused or improperly used may be withdrawn.

Procedures

1. Establishment of fund - A department must request the fund from the Controller (Petty Cash Forms Instruction  Page). The Cashier's Office will provide the money upon approval. The designated petty cash fund custodian (custodian) will be required to sign  for the money and assume responsibility for its safeguarding and proper utilization.
2. Fund management - Responsibility for management and operation of the fund, in accordance with procedures of this instruction, is delegated  by the Controller to the designated and approved custodian. If the primary  custodian is changed, the fund status is verified by the outgoing and incoming custodian and a jointly signed memo detailing the fund status is forwarded  to the Controller with a copy retained for audit purposes. The format shown on the Change of Petty Cash fund Custodian should be used for certification  and notification. (Petty Cash Forms Instruction Page) When an increase or decrease in the fund amount is desired, a memo is sent to the Controller.
3. Authorization for purchase - approval for purchase is secured from the custodian before making the purchase using fund money. Prior approval is necessary to insure that:
1. the proposed purchase can properly be made from petty cash.
2. the department authorized the purchase and will reimburse the purchaser.
3. the purchaser understands the procedures for purchase, requirements  for receipt, and procedures for reimbursement.
4. Making purchases - Upon approval by the custodian for the specific purchase and the amount to be spent, the individual will:
• make the authorized purchase.
• pay for the purchase.
• secure a receipt or itemized ticket signed and marked "Paid" by the vendor.
5. Securing reimbursement for individual purchase - After making an authorized purchase as outlined above, the individual purchaser needs to  be reimbursed by the custodian as outlined in section 7 below.
6. Cash advance prior to purchase - It is intended that the purchaser pay the vendor and secure reimbursement from the fund upon presentation  of a receipt. However, under unusual circumstances and when deemed necessary  by the custodian, a cash advance may be made prior to the purchase under  the following conditions:
1. The advance may be given only for the specific purchase approved and may not be outstanding for more than two working days.
2. The purchaser signs a "Payment from Petty Cash Fund" form (Petty Cash Forms Instruction Page) which is marked "Advance for Purchase" in the "account charged"  space with all other blanks completed the same as for a regular reimbursement.
3. The signed form is placed in the fund box.
4. Upon completion of the purchase:
1. the advance is marked "canceled" and is placed in the department file.
2. reimburse either the purchaser or the fund (see section 7 below) any difference between the advance and the actual cost of the purchase.

Reimbursement Procedures

Reimburse a purchaser -  The custodian needs to:

1. verify that the University required the purchase, that it was a  proper fund purchase, and that the University actually received the purchase.
2. secure a proper receipt or itemized sales ticket marked "Paid" by the vendor. If these documents are not available, use the "Payment  from Petty Cash Fund" form (Petty Cash Forms Instruction Page).
3. reimburse the purchaser from the fund.

Reimburse the fund - When cash on hand in the fund reaches a level where reimbursement is required, at least once a month per State of Colorado  Fiscal Rules, the custodian needs to:

1. clear out any "advance for purchase" receipts.
2. sort documents by account number to be charged and total sales slips and "Payment from Petty Cash Fund" forms (on an adding machine  tape, if available).
3. count remaining cash and verify that the total cash plus the total receipts equals the total authorized fund.
4. on the last working day of each month, or more often if necessary, complete the "Petty Cash Reconciliation Statement & Disbursement Report [(Reconciliation), (Petty Cash  Forms Instruction Page). If requesting reimbursement, a "Check  Request Form" (item 6 below) must accompany the Reconciliation. If  reimbursement is not requested, send the Reconciliation directly to the  Controller.
5. document any shortage on a "Payment from Petty Cash Fund"  form, an appropriate explanation entered, and the form signed by the custodian.  Deposit overage with the Cashier's Office using the department's account  number with the object code (last four digits of the account number) of  4350.
6. Prepare a "Check Request Form" (Petty Cash Forms Instruction Page) for the amount due the fund. Indicate on the form the distribution of charges by account number. The form is supported by the Reconciliation plus the proper receipts to cover the expenditure reimbursement. Send the completed forms to the Accounts Payable Office in the Financial Services Department for processing. The custodian should retain a copy of all documentation.

Safeguarding the Petty Cash Fund

All cash and sales slips,  receipts, or other applicable documents of the fund should be secured and safeguarded in a metal lock box and placed in a locked desk, locked cabinet, or locked safe.

Audit

The University's Internal  Auditor will periodically (announced or unannounced) make an audit of the fund. The State Auditor, or designee, may also perform audits of selected  funds. The custodian and that person's immediate supervisor are to insure  that the fund is balanced and available for audit at all times.

Forms

All petty cash forms ("Request to Establish Petty Cash Fund, "Change of Petty Cash Custodian",  "Payment from Petty Cash Fund", "Petty Cash Reconciliation Statement & Disbursement Report", and "Check Request Form")  may be downloaded at the Financial Services Forms Page.