I:\Business Office\policies and procedures\cash & banking\petty cash
Establishing, Changing, Closing or Transferring a Petty Cash Fund
Petty cash funds are established by submitting an RFP for the imprest amount. The budget originator approves the request. The RFP is made payable to the designated fund custodian and submitted to Accounts Payable. The department custodian will receive a check payable to him/herself. Petty cash checks may be cashed at the custodian’s bank or at the college’s bank (Bank of America). Accounts Payable staff alert the Director of Financial Services to new petty cash fund requests. Business Office staff update the audit workpaper of petty cash, and walk through these procedures with the custodian.
If the petty cash fund has to be replenished too often, the imprest amount may be increased. An RFP for the amount of the increase is submitted in the same way as for initially establishing the petty cash fund.
Example: The Metro Center department has a petty cash fund with an imprest amount of $50. The custodian has been running out of money and requesting replenishment almost every week. The purchases made from the fund are appropriate, so the budget originator approves an increase in the imprest amount of $100. An RFP is submitted for $100, the check is cashed, and the new imprest balance is $150. The account on the RFP is 11-0000-00-10058-11001.
If the petty cash fund is seldom used, the imprest amount may be decreased by depositing the unneeded amount into the college checking account.
Example: The Metro Center department has a petty cash fund with an imprest amount of $200. The money is seldom used; the custodian hasn’t requested replenishment for eight months and is concerned that the money is just sitting around and is susceptible to theft. She takes $150 to the cashiers at Enrollment Services and asks them to code the receipt to 11-0000-00-10058-11001. The new imprest amount is $50.
If a petty cash fund is no longer needed, it may be closed, as follows:
1. Turn in the remaining cash to the cashiers at Enrollment Services and obtain a receipt.
2. Bring the receipt and all other petty cash vouchers to the Business Office. The Business Office will write a journal to record the expenditures, any cash short or over, and credit petty cash.
If the custodian for the petty cash fund changes:
Inform the Business Office. Business Office staff will confirm the change with the budget originator and update the custodian in the audit workpapers.
Replenish the petty cash fund, as described above, so that the new custodian begins with cash equal to the imprest balance.