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I:\Business Office\policies and procedures\cash & banking\petty cash

BUSINESS OFFICE PROCEDURE:  Petty cash

EFFECTIVE DATE:  10-1-08

Date revised:  10-12-10, 9-29-14

AUTHOR:  Chris Robuck

Purpose of Petty Cash

The purpose of a petty cash fund is to provide departments with ready cash for payment of various small expenditures.  Petty cash disbursements should be used only for small incidental expenditures and not as a method to bypass the College’s Accounts Payable and Purchasing systems.

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.

Petty cash funds are operated on a imprest basis.  Petty cash is established at a certain amount, the imprest amount, and the custodian is responsible for that amount. Receipts are obtained for all disbursements and kept with the petty cash monies until replenishment is requested.  The total of money and receipts should at ALL times equal the imprest amount of the fund.  All petty cash funds are subject to unannounced audits by the business office.  

Disbursements

Disbursements from petty cash funds must be properly documented and for a valid business purpose.  Petty cash funds may NOT be used for the following:  

Cashing personal checks

Providing personal loans.  

Any items that are used or consumed by employees that are not for College use.

The process for using petty cash follows:

1.  The person buying the item obtains prior approval from the budget originator or fund custodian.  

2.  The purchase occurs in one of two ways.  

The person buying the item pays for the item with personal monies, gives the receipt to the petty cash custodian, and is reimbursed.  

The person buying the item obtains petty cash from the fund custodian. The custodian fills out date, employee, and the advance amount on a petty cash voucher and places it in the petty cash box.  The person buys the item, then gives the receipt and change to the petty cash custodian.  The custodian destroys the original petty cash voucher for the advance.  

3.  The receipt for the purchase is attached to a petty cash voucher.

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