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Policy: II.E.2x4 (inactive)

Issued: April 5, 1994

Owner: Procurement Services  and Associate Comptroller, Revenue and Collections

Latest Revision: March 5, 2003

PETTY CASH, PETTY CASH CHECKING,
AND CHANGE FUNDS


**INACTIVE POLICY**

For Current Policies:
Policy Table of Contents

 

This policy has been migrated to the standardized format.
See
  https://policy.itc.virginia.edu/policy/policydisplay?id=FIN-040

1.0 Purpose

This document sets forth University policy for establishing, managing, reimbursing, and closing petty cash and change funds.

Note: The Associate Comptroller, Revenue and Collections 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  [Top]

2.1 Overview

A petty cash fund is established through an advance of funds by the Associate Comptroller, Revenue and Collections 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 $100.

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 the Associate Comptroller, Revenue and Collections. The Associate Comptroller, Revenue and Collections has the final authority to establish a fund. 

Checking account requests must include a Bank of America Corporate Signature Card.  All checking account reimbursements must be made using Electronic Funds Transfer (EFT) via the Automated Clearing House (ACH).

The "Request for Petty Cash, Petty Cash Checking, or Change Fund" form must also be filled out and submitted to the Associate Comptroller, Revenue and Collections 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 and reconciliation of their petty cash fund(s) 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, in the case of a petty cash checking account,  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.  Special questions concerning allowable expenses including 1099 reportable expenses can be answered by Procurement Services.

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 RC-50) should be submitted to the Associate Comptroller, Revenue and Collections PRIOR to the time the predecessor custodian is to be relieved of responsibility.

Procurement Services 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 or theft of these funds occurs, such loss must be refunded to the University's central accounts.  As the Petty Cash Custodian is responsible for following all relevant policies and procedures in safeguarding these funds, loss from negligence will be their personal responsibility.  Other losses must be restored to the central accounts 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.

It is the responsibility of the custodian of a checking account to remit to the State all unclaimed checks. These checks, if not cashed by the payee within the designated time, are considered unclaimed property and belong to the Commonwealth. Contact the Associate Comptroller, Revenue and Collections for procedures to be followed in remitting unclaimed property.

The University will pay for the monthly bank maintenance fee and individual transactions fee for the petty cash checking accounts, but departments will be responsible for the cost of checks and each petty cash checking account will be automatically charged.  These costs must be recovered through the normal petty cash reimbursement process.

 

2.5 Petty Cash Uses, Limits and Restrictions

Petty Cash must be used to make official University of Virginia purchases only. University faculty, staff, and students should anticipate expenses and arrange payment by one of the following methods: Purchasing Card, Limited Purchase Order, Purchase Order, or Payment Voucher. Petty Cash should only be used when payment by one of these preferred methods is not possible.

In addition:

  1. Individual Petty Cash expenditures are limited to a maximum of $100.

  2. Petty Cash should not be used for recurring expenses.

  3. Petty Cash may not be used for capital outlay projects.

  4. Petty Cash may not be used to make reimbursements.

  5. Petty Cash may not be used to purchase gifts, cards, or flowers.

  6. Petty Cash may not be used to cash checks or to make salary advances or loans.

  7. University faculty, staff, and students may seek up to $100 in advance from their department's Petty Cash fund to cover expenses such as parking, tolls, taxis, etc., that may arise as part of a day trip on official University business.

  8. University faculty, staff, and students may also seek up to $100 in advance from their department's Petty Cash fund to cover the expense of a certified business meal. When petty cash is used for this purpose, the original hard copy of the Certified Business Meal form and the Petty Cash Reimbursement form must be forwarded to Procurement Services.

  9. Petty Cash must not be used to make payments for services with the sole exception of payments to research study participants for taking part in a research study or survey. Departments are responsible for ensuring that payments to a single individual 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 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 Procurement Services which includes the original paper copy of the Petty Cash Fund Reimbursement form and all receipts to support the disbursements made from the fund. Original petty cash vouchers are sent to Procurement Services along with a screen print of the corresponding payment voucher. The screen print must be signed by the Petty Cash Custodian, department head, or Dean, Vice President, or Designee as required.

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.


2.7 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  [Top]

4.0 References  [Top]




5.0 Approvals and Revisions [Top]

Previous version in effect from 11/01/02 to 03/05/03 available in policy archive.
Previous version in effect from 8/19/01 to 11/01/02 available in policy archive.
Previous version in effect from 9/14/00 to 8/19/01 available in policy archive.
Previous version in effect from 4/5/94 to 3/7/00 available in policy archive.


Maintained by University Comptroller
2003 by the Rector and Visitors of the University of Virginia