PETTY CASH, PETTY CASH
AND CHANGE FUNDS
- 1.0 Purpose
This document sets forth University policy for establishing, managing,
reimbursing, and closing petty cash and change funds.
Note: Accounting Services is responsible for policy regarding
establishing, setting limits, and closing departmental petty cash
funds, while Procurement Services is responsible for policy regarding
allowable expenditures and reimbursing petty cash funds.
- 2.0 Policy
A petty cash fund is established through an advance of funds
by Accounting Services to a University department. Departments may
establish a petty cash fund to handle small, unanticipated purchases
from vendors when immediate payment is required and the formal University
purchasing and billing processes are impractical or cannot be used.
Petty cash must NOT be used to pay vendors when a University Purchasing
Card, Purchase Order, or Payment Voucher could be used. Departments
are strongly encouraged to use the University Purchasing Card
in lieu of petty cash whenever possible. All petty cash purchases
and reimbursements must adhere to State and University procurement
policies and procedures.
A Change fund is a specific amount of cash kept in departments
and used to make change for services rendered by the department.
2.2 Overall Fund Limits
Unless special written approval is obtained from the appropriate Dean
or Vice President, a departmental petty cash fund is limited
to $500 in cash on hand and $2,500 in checking.
Individual petty cash expenditures are limited to a maximum of $25
in cash or $100 by check.
Change funds are limited to $200 unless special written approval
is obtained from the appropriate Dean or Vice President.
2.3 Establishing, Changing, or Dissolving
a Petty Cash or Change Fund
The head of each department or activity must designate a specific
individual to act as Petty Cash Custodian. Petty Cash Custodians
must be salaried employees of the University of Virginia. Custodians
may not be undergraduate students, graduate students, wage, or temporary
The Department Head and Petty Cash Custodian must sign and submit
the "Request for Petty Cash, Petty Cash Checking, or Change Fund"
form in order to establish a petty cash, petty cash checking, or change
fund. This form must be submitted to Accounting Services. Accounting
Services has the final authority to establish a fund. Checking account
requests must include a Bank Account Authorization.
The "Request for Petty Cash, Petty Cash Checking, or Change Fund"
form must also be filled out and submitted to Accounting Services
when departments wish to increase, decrease, or close one of these
types of funds.
2.4 Managing a Petty Cash Fund within Departments
The Petty Cash Custodian is responsible for managing the department's
petty cash fund and should be the only person in the department to
sign checks and disburse actual cash. The custodian is also responsible
for providing for the balancing of the petty cash fund at least every
30 days regardless of the amount of the reimbursement.
Departments should also appoint a separate individual to review and
approve petty cash payments and disbursement vouchers and reconcile
the monthly petty cash bank statement. This person shall not have
the authority to sign checks or disburse actual cash. The bank statement
should be delivered to the person responsible for reconciliation directly
from the bank, unopened, and should remain in his or her sole control
until the reconciliation has been completed. If the payments under
review by the authorized official or employee mentioned above include
reimbursements to the person conducting the review, then another authorized
official or employee should be designated to review and approve the
Payment Voucher. The alternate review shall not have the authority
to sign checks or disburse actual cash. If it is not feasible to have
both a custodian and an approving official, the department head or
fiscal officer must document all exceptions in writing and send them
to the State Comptroller for review and approval.
It is the responsibility of both the fund custodian and the department
head to limit the use of the fund to legitimate and allowable University
related revenue refunds and/or expenses.
Petty cash funds are non-transferable, i.e., anytime there is to
be a change of custodian, a new "Request for Petty Cash, Petty Cash
Checking, or Change Fund" form (Form UT-50) should be submitted to
Accounting Services PRIOR to the time the predecessor custodian is
to be relieved of responsibility.
Accounts Payable will not reimburse a petty cash fund unless a "Request
for Petty Cash, Petty Cash Checking, or Change Fund" form is on file
indicating the name of the CURRENT custodian.
NOTE: This process is required for temporary changes as well. The
former and new custodians should perform a petty cash refund reconciliation
at the time of transfer, and both should sign the reconciliation form.
All petty cash, petty cash checking and change funds shall be subject
to periodic audit by the University's external auditors and by the
University's Internal Audit Department. Both the head of the department
and the Petty Cash Custodian shall be jointly responsible for insuring
that the funds are properly safeguarded. When not in use, the funds
should always be stored in a secure, locked container. If a loss of
these funds occurs, such loss, depending upon the circumstances, may
have to be paid from the department's own funds. The University Police
Department should be contacted for advice on the proper methods for
safeguarding the fund. All thefts MUST be reported to the University
Police Department, Office of Risk Management, and the Internal Audit
2.5 Petty Cash Uses and Spending Limits
As a general rule, petty cash funds can be used to make payments for
the following reasons and are limited as follows:
- Immediate payments to vendors where goods will not be provided
without immediate payment. These are local vendors on a nonrecurring
basis where the vendor is not willing to accept a Purchase Order
and provisions for delayed billing/payment are impractical. These
payments may not exceed $25.00 in cash or $100.00 by check.
Departments are strongly encouraged to use the University Purchasing
Card for these payments.
- As a non-profit institution, the University of Virginia is exempt
from sales tax on all goods and services except prepared foods.
It is the petty cash user's responsibility to claim this exemption.
The University of Virginia will not accept liability for such over-payments.
The State Sales and Use Tax Certificate of Exemption Form, available
from the University Forms
Directory or from the Procurement
Services web site, may be provided to the vendor so that the
University will not be charged sales tax.
- Up to $100 to cover some travel expenses for day trips
(NOT overnight travel) such as parking, tolls, taxis, etc. The traveler
must provide written explanation of the purpose or reason of the
trip and produce receipts for all expenditures.
- Business Meals. Petty cash can be used to pay for certified
business meals up to a maximum of $100. There are, however, numerous
regulations regarding reimbursement for business meals, so Meal
Expenditures -- Policy VI.G.2 must be carefully consulted before
using petty cash to pay for a business meal.
- Payments to research study participants for taking part
in a research study or survey. Departments are responsible for ensuring
that payments to individuals do not exceed $100 per transaction
and $599.99 per calendar year. In all cases, the department must
maintain a record of the name, address, and social security number
of the study participant as well as the name and date of the study.
2.6 Petty Cash Restrictions
The following uses of petty cash are strictly prohibited:
- All expenditures for capital outlay projects
- All service payments except research study participants noted above
- Installment purchases
- Overnight travel
- Salary advances
- Mileage reimbursement
- Advances to employees, check cashing or other non-operating disbursements
- Gifts, cards, or flowers for an employee or non-employee
2.7 Reimbursing Petty Cash, Petty Cash
Checking, and Change Funds
Petty cash funds must be reimbursed no less often than every 30 days
during the year regardless of the amount of the reimbursement. The
petty cash fund is replenished by submitting a Payment Voucher to
Accounts Payable (online and in hard copy) along with receipts to
support the disbursements made from the fund. Original Petty Cash
vouchers are sent to Accounts Payable along with a screen print of
the corresponding Payment Voucher. The screen print must be signed
by the Petty Cash Custodian and the department head.
All petty cash funds in excess of $200 must be reimbursed through
All petty cash funds must be reimbursed at fiscal year-end, so that
no unreimbursed vouchers remain outstanding at June 30. The custodian
and the department head will be required to confirm to Accounting
Services the amount of petty cash currency and coin on hand as of
June 30 each year. Surprise counts of petty cash funds will be made
periodically by the Internal Audit Department. All petty cash funds
must also be reimbursed by December 31 to allow for proper reporting
of taxable payments
All unclaimed checks from petty cash funds are considered unclaimed
property. If any check is not cashed by the payee within the designated
time, and the payee cannot be contacted for disposition, the funds
must be remitted to the University of Virginia. Remittance of unclaimed
checks is to be coordinated through Accounting Services.
2.8 Documentation and Records Retention
Departments must maintain a file of Petty Cash vouchers and screen
prints in voucher number order. This documentation must be kept in
departmental files for a minimum of 3 years plus the current fiscal
- 3.0 Definitions
- 4.0 References
- 5.0 Approvals and Revisions [Top]
- Previous version in effect from 9/14/00 to 8/14/01 available
in policy archive.
Previous version in effect from 4/5/94 to 3/7/00 available
in policy archive.