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Policy: II.E.2x2 (inactive)

Issued: April 5, 1994

Owner: Procurement Services
             and Accounting Services

Latest Revision: June 19, 2002

PETTY CASH, PETTY CASH CHECKING,
AND CHANGE FUNDS


**INACTIVE POLICY**

For Current Policies:
Policy Table of Contents

 

 


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 
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2.1 Overview

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 personnel.

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 Department immediately.


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:

  1. 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.


  2. 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.


  3. 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.


  4. 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.


  5. 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 direct deposit.

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 year.


3.0 Definitions
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4.0 References
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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.

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