University of North Carolina at Charlotte

Departmental Petty Cash and Change Funds

Procedures

 

TABLE OF CONTENTS

 

 

Note: The Petty Cash/Change Fund training material can be found at www.finance.uncc.edu/PettyCash.ppt


Uses of Funds

I. Petty Cash

Use of Petty Cash Funds is encouraged for purchases of low-priced items from local vendors where the costs of establishing a purchase order, processing an invoice, and writing a check would substantially increase the cost of the transaction.  The maximum limit for purchases from petty cash funds is $100 per purchase unless the Purchasing Department provides prior written approval.  Petty Cash Funds may not be used to avoid other established purchasing procedures, nor may total orders be split into smaller increments to avoid this $100 limit.

As with all expenditures, Petty Cash may only be used to obtain goods and services necessary to carry out official University functions. 

Petty Cash transactions must follow University disbursement policies and procedures.  Petty Cash Funds may not be used to:

  • Cash checks
  • Make loans
  • Make advances
  • Reimburse travel-related expenditures or to make travel advances
  • Pay wages for students or temporary employees, or pay overtime for any employee
  • Pay expenses relating to the use of private motor vehicles, including mileage and fuel
  • Provide floral tributes, small gifts and other tokens of appreciation, or prizes and awards
  • Make purchases that would not be approved under normal policies and procedures
  • Reimburse credit card purchases

Failure to adhere to these policies will result in the Petty Cash Fund being recalled.

II. Change Funds

Change Funds are used to accommodate departmental sales. 

 

PETTY CASH PROCEDURES

I. Establishing Funds

 

Departments wishing to establish an initial Petty Cash Fund should complete the Petty Cash Fund Request Form which can be found on the Controller’s Office web page at www.finance.uncc.edu/PCFRF.doc  The form is to be submitted to the Petty Cash/Change Fund Officer, 329 Reese Building. 

 

Following receipt and approval of the form, the Petty Cash/Change Fund Officer will request a check made payable to the person listed as the Custodian of the fund.  With Photo ID, the Custodian may pick up the check and cash it at the Cashiers’ Office and must hold the Petty Cash Fund in a secure location at the University.  Assistant Petty Cash /Change fund Officer will send an initial agreement form to all new Petty Cash Custodians for signature.  Once agreement form is signed and returned, the Petty Cash fund can then be established.  Every effort should be made to limit only one custodian authorized to each Petty Cash/Change Fund. Documentation from Chair/Director is required if more than one petty cash funds are authorized to each Petty Cash/Change Fund custodian.

 

II. Responsibilities

 

A. Petty Cash Fund Custodian

 

a.       Maintain the petty cash fund on University premises, unless off campus use is approved by Petty Cash/Change Fund Officer

b.      Secure the petty cash fund (locked box, locked location)

c.       Ensure that access to the petty cash fund is limited to the custodian

d.      Inform the supervisor of the location of the petty cash fund

e.       Maintain accountability and accuracy for the petty cash fund by keeping the petty cash transaction log found at www.finance.uncc.edu/PettyCashLog.xls

f.        Replenish the petty cash fund by the 15th of each month; must include current reconciliation

g.       Ensure that processes involving annual agreement and renewals are performed appropriately (refer to Section VIII Annual Renewal of Petty Cash fund) and in accordance with the established time frame (by May 31 each year).

h.       Secure and make available all documents relating to the Petty Cash Fund to Internal Audit and/or State Auditors

i.         Allow cash counts of Petty Cash fund when requested by Internal Audit and/or State Auditors

 

                  B. Petty Cash Fund Custodian’s Supervisor

 

a.       Ensure the custodian exercises his/her responsibilities appropriately

b.      Notify the Petty Cash/Change Fund Officer when the custodian leaves the University

c.       Close out the petty cash fund, with assistance from Internal Audit, if the custodian is no longer available

d.      Ensure that overages/shortages are addressed as they occur and as part of the petty cash custodian’s performance evaluation, as appropriate.

 

      C.  Petty Cash/Change Fund Officer

 

a.      Ensure that the establishment of new petty cash funds are in compliance with University policies

b.      Ensure that petty cash fund custodians have access to current rules and procedures

c.      Ensure that petty cash fund custodians are following University guidelines

d.      Notify Internal Audit when a petty cash fund custodian is not following correct procedures

 

III. Accountability and Reconciliations

 

The custodian must verify, reconcile, and replenish petty cash funds by the 15th day of each month.  The total of receipts and cash on hand, plus pending reimbursement requests must equal the total authorized amount of the petty cash funds.  Any discrepancies should be reported immediately to the Internal Auditor and the Petty Cash/Change Fund Officer.  If a theft is suspected, the Internal Auditor will notify University Police immediately. 

 

IV. Replenishing Petty Cash Funds

 

Reimbursements for petty cash funds should be requested as needed, but no later than the 15th of each month.  The custodian must complete the Petty Cash Reimbursement Form and sign, date, and attach all receipts (originals only) to the request for reimbursement.  An original receipt must be included for each petty cash expenditure for which reimbursement is requested.  An acceptable receipt will show name of the establishment, transaction date, itemized transactions, and total amount.  The form should be submitted to the Petty Cash/Change Fund Officer, Financial Services, 329A Reese Building.  All efforts will be made to process reimbursement requests as quickly as possible.  Processing will be delayed if additional information (signature, original receipts, etc.) is required.

 

Overage/Shortage: All cash over and shortages must be reconciled and reflected in the University accounting system. When Petty Cash funds are found to be in excess of their authorized amount (Overage), the overage should be included in the Petty Cash Reimbursement/Reconciliation Form as a deposit (credit) of the overage cash amount into the departmental fund and Over & Short account (951720). (Note: The overage will offset the amount of expenses recorded on the Petty Cash Reimbursement Form.) All cash shortages must be also reimbursed as an expense (debit) through the departmental fund and Over & Short account (951720) by submitting the Petty Cash Reimbursement/Reconciliation Form.

 

V. Review of Petty Cash Fund Usage

 

Upon receipt of a reimbursement request, the Petty Cash/Change Fund Officer will confirm that an authorized custodian has signed the request.  The Petty Cash/Change Fund Officer will sign the request and forward it to the Purchasing Department to review the receipts for propriety and compliance with State and University purchasing regulations.  If it appears the petty cash fund is being used improperly, the Purchasing Department will refer the matter to the Petty Cash/Change Fund Officer.

 

The Petty Cash/Change Fund Officer will periodically review each petty cash fund for the frequency of activity.  Petty cash funds with insufficient activity to justify replenishment on a monthly basis may be recalled or reduced.

 

VI. Increasing/Decreasing/Closing a Petty Cash Fund

 

The custodian’s supervisor may request an increase to a petty cash fund.  The custodian’s supervisor should complete the Petty Cash Fund Request Form section titled Increase Fund/Decrease Fund, indicate the amount of the requested increase, and provide justification for the increase.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/PCFRF.doc  The form is to be submitted to the Petty Cash/Change Fund Officer, 329 Reese Building.  If the request is approved, the custodian will be notified by the Petty Cash/Change Fund Officer to pick up the check in person.  The custodian must bring a university photo ID.

 

The custodian’s supervisor may decrease or close a petty cash fund by depositing the appropriate amount of cash at the Cashiers’ Office.  Please contact the Petty Cash/Change Fund Officer at extension 7-3198 for the account number the deposit will be made to.  All reimbursement requests must be processed prior to closing a petty cash fund (i.e., the petty cash fund must be totally replenished prior to closing).  The custodian’s supervisor should complete the Petty Cash Fund Request Form section titled Increase Fund/Decrease Fund or Close Petty Cash Fund and take the form and the funds to the Cashiers’ Office.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/PCFRF.doc  The Cashier will attach a copy of the receipt to the Petty Cash Fund Request Form and forward the receipt and form to the Petty Cash/Change Fund Officer.

 

 

VII. Change in Custodian

 

A custodian who is leaving the university must perform a final reconciliation and complete the Petty Cash Fund Request Form section titled Close Petty Cash.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/PCFRF.doc . Signing the form verifies reconciliation of the fund.  The form must be sent to the Petty Cash/Change Fund Officer.  Responsibility for the petty cash fund may not be transferred to another employee. 

 

VIII. Annual Renewal of Petty Cash Fund

 

The Petty Cash/Change Fund Officer will send a Petty Cash Annual Renewal agreement letter to all petty cash fund custodians by April 30 for the new fiscal year that begins July 1.  The letter must be signed and returned to the Petty Cash/Change Fund Officer no later than May 31 or the petty cash funds will be recalled and no reimbursements will be processed.  If the petty cash fund is no longer needed, complete the Petty Cash Fund Request Form (section titled Close Petty Cash) and take the form and funds to the Cashiers’ Office.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/PCFRF.doc . The Cashier will attach a copy of the receipt to the Petty Cash Fund Request Form and forward the receipt and form to the Petty Cash/Change Fund Officer.

 

CHANGE FUND PROCEDURES

 

I. Establishing Funds

 

Departments wishing to establish an initial Change Fund should complete the Change Fund Request Form which can be found on the Controller’s Office web page at www.finance.uncc.edu/CFRF.htm.  The form is to be submitted to the Petty Cash/Change Fund Officer, 329 Reese Building. 

 

Following receipt and approval of the form, the Petty Cash/Change Fund Officer will request a check made payable to the person listed as the Custodian of the fund.  With Photo ID, the Custodian may pick up the check and cash it at the Cashiers’ Office and must hold the Change Fund in a secure location at the University.   Assistant Petty Cash /Change fund Officer will send an initial agreement form to all new Petty Cash Custodians for signature.  Once agreement form is signed and returned, the Petty Cash fund can then be established.

 

   II. Responsibilities

 

A. Change Fund Custodian

 

                                                              i.      Maintain the change fund on University premises, unless off campus use is approved by Petty Cash/Change Fund Officer

                                                            ii.      Secure the change fund (locked box, locked location)

                                                          iii.      Ensure that access to the change fund is limited to the authorized  departmental personnel

                                                           iv.      Inform the supervisor of the location of the change fund

                                                             v.      Maintain accountability for the change fund

                                                           vi.      Reconciliation must be done daily to ensure the change fund is maintained at its issued amount

                                                         vii.      Secure and make available all documents relating to the change fund to Internal Audit and State Auditors

                                                       viii.      Allow cash counts of change fund when requested by Internal Audit and/or State Auditors

 

                  B. Change Fund Custodian’s Supervisor

 

i.        Ensure the custodian exercises his/her responsibilities appropriately

ii.      Notify the Petty Cash/Change Fund Officer when the custodian leaves the University and a new custodian has been named

iii.    Ensure that only appropriate departmental personnel have access to change fund

iv.     Ensure that daily deposits are accurate

v.       Ensure Department policies and procedures are established concerning daily close outs, reporting of sales, and recording any overages and shortages

vi.     Monthly count of all change fund balances by the Custodian’s supervisor and result should be logged and documented for any investigation upon finding the overage/shortage.

vii.   Ensure that processes involving annual agreement and renewals are performed appropriately (refer to Section VI Annual Renewal of Change Fund) and in accordance with the established time frame (by May 31 each year).

 

viii. Ensure that overages/shortages are addressed as they occur and as part of the petty cash custodian’s performance evaluation, as appropriate.

 

                  C. Petty Cash/Change Fund Officer

 

i.        Ensure that the establishment of new change funds are in compliance with University policies

ii.      Ensure that change fund custodians have access to current rules and procedures

iii.    Ensure that change fund custodians are following University guidelines

iv.     Notify Internal Audit when a change fund custodian is not following correct procedures

 

III. Accountability and Reconciliations

 

The custodian must balance funds daily and deposit with the Cashiers’ Office any amounts representing sales.  Discrepancies should be reported immediately to the Internal Auditor and the Petty Cash/Change Fund Officer.  If a theft is suspected, the Internal Auditor will notify University Police immediately. 

 

IV. Increasing/Decreasing/Closing a Change Fund

 

The custodian’s supervisor may request an increase to a change fund.  The custodian’s supervisor should complete the Change Fund Request Form section titled Increase Fund/Decrease Fund, indicate the amount of the requested increase, and provide justification for the increase.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/CFRF.htm.  The form is to be submitted to the Petty Cash/Change Fund Officer, 329 Reese Building.  If the request is approved, the custodian will be notified by the Petty Cash/Change Fund Officer to pick up the check in person.  The custodian must bring a university photo ID.

 

The custodian’s supervisor may decrease or close a change fund by depositing the appropriate amount of cash into the appropriate account.  The custodian’s supervisor should complete the Change Fund Request Form section titled Increase Fund/Decrease Fund or Close Change Fund and take the form and the funds to the Cashiers’ Office.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/CFRF.htm.  The Cashier will attach a copy of the receipt to the Change Fund Request Form and forward the receipt and form to the Petty Cash/Change Fund Officer.

 

Overage/Shortage: All cash over and shortages must be reconciled and reflected in the University accounting system. When Petty Cash funds are found to be in excess of their authorized amount (Overage), the overage should be included in the Petty Cash Reimbursement/Reconciliation Form as a deposit (credit) of the overage cash amount into the departmental fund and Over & Short account (951720). (Note: The overage will offset the amount of expenses recorded on the Petty Cash Reimbursement Form.) All cash shortages must be also reimbursed as an expense (debit) through the departmental fund and Over & Short account (951720) by submitting the Petty Cash Reimbursement/Reconciliation Form.

 

V. Change in Custodian

 

Prior to changing custodians:

 

i.        Notify Petty Cash/Change Fund Officer of the proposed replacement

ii.      Petty Cash/Change Fund Officer will notify Internal Audit of the request

iii.    Internal Audit will perform the final audit

iv.     After audit is finished, complete Transfer of Change Fund to New Custodian section on the Change Fund Request Form

v.       After Transfer of Change Fund to New Custodian form is returned to Petty Cash/Change Fund Officer an agreement form will be sent to the new custodian for signature

vi.     New custodian will sign and return original agreement form to Petty Cash/Change Fund Officer

 

VI. Annual Renewal of Change Fund

 

The Petty Cash/Change Fund Officer will send a Change Fund Annual Renewal Letter to all change fund custodians by April 30 for the new fiscal year that begins July 1.  The letter must be signed and returned to the Petty Cash/Change Fund Officer no later than May 31 or the change funds will be recalled.  If the change fund is no longer needed, complete the Change Fund Request Form (section titled Close Change Fund) and take the form and funds to the Cashiers’ Office.  This form can be found on the Controller’s Office web page at www.finance.uncc.edu/CFRF.htm.  The Cashier will attach a copy of the receipt to the Change Fund Request Form and forward the receipt and form to the Petty Cash/Change Fund Officer.