|Purpose||To inform University employees of the various policies and procedures required to establish, reimburse and settle Petty Cash Funds.|
|Policy Owner:||Comptroller - Financial Management|
Definitions | Policy Statements | Establishing a Petty Cash Advance
Reimbursing Allowable Expenditures | Changing Petty Cash Custodians | Closing the Petty Cash Fund
- Petty Cash: A cash advance used to provide operating funds to authorized individuals (usually a moderate amount) for incidental departmental expenses and reimbursement for small dollar expenditures where it is not practical to use the Disbursement Voucher process or a P-Card
- Custodians: A University employee designated by a dean or department head, who is responsible for the maintenance of the petty cash advance. The custodian is responsible for ensuring that the expenditures incurred or reimbursed from the advance are allowable in accordance with University of Arizona policy.
- Petty Cash Voucher: A pre-numbered two-part form used when reimbursing allowable expenses from the petty cash advance. One copy is attached to the original supporting documentation (later submitted to Accounts Payable when replenishment of funds is requested), and the second is given to the cash recipient. Petty Cash Vouchers may be obtained from any office supply store
- A Petty Cash advance is available only to an employee of the University of Arizona.
- Petty Cash funds may not be used to reimburse expenses for sponsored project grant and/or contract accounts. If the expense should be charged to a sponsored project account, process the reimbursement request via a Disbursement Voucher.
- Petty Cash funds must not be used for types of expenditures which are prohibited by University of Arizona policy. (9.10 Requisitions/Reimbursements
- Petty Cash funds should be physically separated from other types of advances in a secure locked drawer, a locked cash box, a safe accessible only to the custodian, or maintained in a separate checking account. Checking accounts must be in the name of the custodian, not the University of Arizona. (8.10 Cash Receiving)
- Records and receipts must be maintained to support all expenditures incurred or reimbursed from the petty cash advance. The receipts submitted for reimbursement must show evidence of being paid. If a receipt, bill or invoice was either not issued, or does not show evidence of being paid because payment was made by check, include the canceled check. The custodian should deny the request if the original receipts or attachments required by policy are unavailable, or if the request is not reimbursable under University policy. If a request to replenish the petty cash advance is refused due to lack of support or if the expenditure is disallowable, per University policy, the custodian will be held personally liable.
- The use of Petty Cash funds is subject to University audit, and therefore the custodian is responsible for the proper disbursement of the funds, receipting, and record keeping according to University requirements. In addition, the custodian is responsible for maintaining an activity ledger of all receipts and disbursements of petty cash. The department is responsible for performing monthly surprise audits of the fund. Evidence of the audit, including the supervisor's sign-off, must be maintained
- The recipient who signed for the funds will be held personally liable for the funds advanced. In the event of termination of employment, the University Payroll Department may exercise the right-of-offset, or the University may take other legal action, as appropriate.
- The dean or department head completes a Disbursement Voucher payable to the custodian, with the following information:
The Promissory Note must be signed by the custodian responsible for the advance and by the dean, department head, or the principal investigator responsible for the account on which the advance and expenses will be recorded.
- The amount requested
- The name of the custodian who will be responsible for the funds
- Specific reasons for the request
- The types and frequency of the anticipated expenditures
- The account where the advance will be posted as a receivable 8140 Petty Cash.
- The method of storing and safeguarding the petty cash funds, and
- A completed Petty Cash Custodial Agreement/Promissory Note.
NOTE: The custodian responsible for the advance may not delegate their signature. However, the dean, department head, or principal investigator's signature may be delegated, as long as the designee is not the custodian.
Upon completion of the Disbursement Voucher, the dean or department head submits the request along with the signed Promissory Note to FSO-Accounts Payable for processing.
- Once processed, the custodian will be contacted by Accounts Payable. Advance checks must be picked up in person and cannot be sent to the department. At Accounts Payable, the custodian will be asked to sign the Promissory Note, if this has not already been done, and will receive:
- The Advance check
- A copy of the signed Promissory Note
Reimbursing Allowable Expenditures
- The custodian prepares an expense summary, organizes and attaches all original itemized receipts substantiating the expenditures in chronological order by type of expenditure, and forwards to the appropriate dean or department head.
- The dean or department head prepares a new Disbursement Voucher for the actual expenses incurred, attaches the expense summary and original receipts, and submits to accounts payable. Record the following information on the Disbursement Voucher.
NOTE: SSN and home addresses are not required for one-time subject payments of less than or equal to $50.
- Payee: The custodian of the Petty Cash fund.
- Funding: Record a summary amount for each object code to which an expense is to be charged.
- Comment: Identify the Petty Cash being replenished by referencing the number of the ORIGINAL Disbursement Voucher used to establish the Petty Cash.
- Documentation needed for:
- Expenditures: Supported in detail by the Record of Petty Cash Expenditures (or equivalent expense summary form) and original itemized receipts.
- Payments to individuals, for example, subject pay: Include each recipient’s name legibly written or typed, social security number or university employee number, and home address. If the subject is paid in cash instead of by check, the subject must sign to acknowledge receipt.
- Once approved and processed by accounts payable, the custodian will receive a check to cash and replenish the petty cash fund.
Changing Petty Cash Custodians
- The new custodian must complete all of the steps for establishing a petty cash fund initially. The petty cash fund being changed does not need to be closed prior to establishing the new custodian. Once the process is complete, a check will be issued to the new custodian.
- The previous custodian must go through the process for closing the Petty Cash Fund detailed below.
Closing the Petty Cash Fund
- Complete a Distribution of Income and Expense for any expenditure incurred and not replenished in the fund. In the comments section state the CLOSING of the fund and the ORIGINAL Disbursement Voucher used to establish the fund. The Distribution of Income and Expense will be crediting the account where the advance is recorded (object code 8140) and debiting the appropriate account and object code to record the expense.
- Any cash remaining in the fund should be deposited through the Bursar's Office using a Cash Receipt. Be sure to deposit the funds to the account where the advance is recorded (object code 8140). Reference the Cash Receipt number on any Distribution of Income and Expense that is submitted (re: step 18 above) and reference the original Disbursement Voucher number on the Cash Receipt.
- Once the Promissory Note has been paid, the original custodian will receive the original note marked “paid” from Cash Accounting.