Petty Cash Policy and Procedures

Petty Cash Policy and Procedures 2

Policy Statement

The purpose of a petty cash fund is to allow for the reimbursement of minor or emergency business expenses in an efficient and cost effective manner. The use of petty cash funds should be limited to reimbursement of faculty, staff, and visitors for small expenses, not to exceed $80.


Use of Petty Cash Petty Cash should be used for minor, “last minute” or

emergency business expenses where it is impractical to be billed, use a P-Card or to have a check issued beforehand.

Petty Cash funds may only be used for the following: For qualifying payments to human subjects engaged in research

activities Necessary and reasonable small business transactions, not to

exceed $80 Emergency purchases of office supplies costing $80 or less Necessary and reasonable food (such as sandwiches and

beverages) brought into the office for business meetings, costing $80 or less. Expenses for food exceeding $25 must always be accompanied by original receipts.

Local carfare, parking, and tolls (all airfare, train tickets, and car rentals are to be submitted through travel and expense reports)


Use of Petty Cash

Petty Cash cannot be used to pay for:

(or reimburse) honoraria, services, equipment, travel or salary advances, registration fees, business meals outside of the office, personal loans, subscriptions, debit or credit card reimbursements, consultant fees and any other type of service payments, or the cashing of personal checks.


Establishment Department must demonstrate a true business need Each department may establish a Petty Cash fund up to $500 Special circumstances that require funds greater than $500 must be

approved by the Office of the Controller, Deputy Controller, Financial Reporting & Operations

Send a check request with a letter of explanation to the Deputy Controller, Financial Accounting 615 W. 131st St, 3rd Floor (CUMC departments should send to Office of Controller, CUMC at P&S 2-460 – Attn Raquel Oquendo – Also attach Custodian Consent Form avail from P&S 2-460)

Letter of explanation should include: Reason for the fund Dollar amount of the fund Name and title of the individual who will act as the fund custodian Description of how and where the funds will be secured Approval by the Department Head


Establishment (cont’d)

Check request should include: Name of custodian in the “Payee” section “To establish a petty cash fund” in the “Description of Service”

section Provide the FAS account number (use sub-code 4830) and

department’s address, phone number, etc A Petty Cash fund number will be assigned by the Controller’s

Office to be used to fund, increase, close, and reimburse the fund

For each research project, a unique Petty Cash Fund is established Justify the Human Subject base amount by the following:

Projected subject volume per week/month Projected reimbursement amount per subject Projected time lag for fund reimbursement


Closing a Petty Cash Fund The custodian must close the fund immediately if the

purpose for which the fund was established ends or changes significantly

Upon completion of the custodian’s employment by the University, the fund must either be closed or a new custodian appointed

To close an existing fund, deposit any remaining cash in the fund via the FFE Cash Module

Send a memo along with the approved Cash Module batch number and any petty cash receipts (or replenish the fund and send un-cashed replenishment check) to the Controller’s Office, Financial Accounting


Changing the Custodian

The current custodian must: Reconcile the Petty Cash fund The new custodian and the department head must sign

the reconciliation form (a reconciliation form is available on the web for guidance)

Transfer the fund to its new custodian Provide updated custodian information via a memo

signed by the department head to the Manager, Financial Ops & Compliance, Office of the Controller, 615 W. 131st St, Studebaker, 3rd Floor


Requesting Reimbursement from the Petty Cash Fund – Non-Human Subjects Submit to the custodian a completed Petty Cash voucher or log

accompanied by original receipts The Petty Cash voucher or log must include:

Date of purchase Printed name of the person reimbursed Description of item purchased, including valid business reason For business meals, document the purpose of the meeting and list those in

attendance For transportation, include origin, destination, and business purpose Dollar amount (NOT to exceed $80) Original receipt Signature of the person who received payment Signature of the custodian who approved the reimbursement

Under NO circumstance may an individual, including the custodian, approve his or her own Petty Cash voucher or log, or that of a person to whom they report

It is the responsibility of the custodian to ensure that each voucher or log is complete, accurate, and accompanied by original documentation


Human Subject Reimbursement

For HUMAN SUBJECT reimbursement, the study coordinator should distribute the cash to the subject and prepare a HIPAA compliant receipt with the following fields for the subject to sign:

Date Amount paid Protocol name or # Account # (on the second copy) Check box for “incentive” or “out of pocket exp.” (on the third copy) Name and signature of study coordinator Name of study subject * Signature of study subject *

CONTACT IRB FOR ANY UPDATED REVISIONS TO THIS POLICY!

NOTE: * Under HIPAA guidelines, these items are considered confidential subject information and will not be included on the third copy of the receipt, which is submitted to Accounts Payable.


Use this 3-Ply Form for all Human Subject Reimbursements (avail from IRB)


Replenishing a Petty Cash Fund On a monthly basis, or when the fund is low, the custodian

should complete a Replenishment Check Request The Check Request and documentation is to be approved by

the DAF with Petty Cash designation authority Petty Cash Custodian attaches to Check Request all petty

cash vouchers or completed log and original, required receipts taped (not stapled) to 8 ½ x 11 white paper

Department processes using AP/CAR, then forwards original to AP for audit and review. If acceptable, AP will cut replenishment check in name of custodian.

Custodian must keep copies of the original documentation for their own departmental files.

Custodian cashes check, replaces cash back into lockbox.


Use of Petty Cash Vouchers


Use of Petty Cash Logs


AP/CAR Replenishment

Filling out the Replenishment Check Request In Description of Services, write “To Replenish Petty

Cash Fund #XXXX” (# can be found on FFE Open Commitments Report)

Provide appropriate custodian Info (i.e. John Green Petty Cash, Office Address and Mailcode)

Assign charges to proper account numbers and sub-codes (i.e. 2330), using 8500 sub-codes for “Unallowables” (Do NOT use sub-code 4830 Petty Cash for replenishments.)

To expedite the process, select “Check Pick-up”


AP/CAR Replenishment (cont.) Entering into AP/CAR (cont.)

Choose proper DAF approver with PC authority. (Under NO circumstances may an individual approve his or her own Petty Cash reimbursements or that of a person to whom he or she reports.

Approval certifies funding availability, compliance, completeness of documentation, and segregation of “unallowables”

Secure “Accepted Voucher Number”, forward to AP


Back-Up Documentation NO STAPLES TAPE small receipts

to one side of a piece of paper (Do not tape invoices together)

Use paper clips (as few as possible)


Reconciliation The custodian must reconcile the fund on a monthly

basis, weekly if the fund is active Reconciliation ensures the sum of the outstanding

reimbursements, cash, and vouchers is equal to the original amount of the fund

For departments with multiple funds, an overall department reconciliation should be performed quarterly

The Office of the Controller, CUMC and Internal Audit may perform spot check counts

A reconciliation form will be available on the web for guidance and/or use

19

Reconciliation SpreadsheetPetty Cash Reconciliation Work Sheet

Date

Custodian's Name

Department

Approved Petty Cash Fund(This is the amount General Accounting designates.)

Currency on Hand Quantity Total

0.01 x = - 0.05 x = - 0.10 x = - 0.25 x = - 1.00 x = - 5.00 x = -

10.00 x = - 20.00 x = - 50.00 x = -

100.00 x = - Total Cash on Hand -$

Receipts on Hand

Advance(s)

Check Requests Previously Submitted

Total Reconciled Petty Cash -$

Total Approved Petty Cash Fund Per Above -$

0.00

Counted By

(Only complete highlighted areas. The spreadsheet will calculate for you.)

Difference

Form Located in Finance Forms Library


Security It is the custodian’s responsibility to provide adequate

precautions for the safekeeping of the funds All Petty Cash must be stored in a secured device, such

as a safe or cash box in a locked cabinet Only the custodian and the department head should

have keys DO NOT:

Commingle funds Place University $ in your own personal bank accounts Distribute Petty Cash amongst other individuals (each fund

should be maintained in ONE location) Fail to reconcile on a timely basis Take University funds to one’s home for safekeeping


Questions???

If anyone has any questions, concerns, or comments please contact the AP Service Center [email protected] or call 854-2122.

Go to website for updated policieshttp://www.columbia.edu/cu/administration/policylibrary/policies/trsy/166.html?base=responsible_office

mailto:[email protected]

http://www.columbia.edu/cu/administration/policylibrary/policies/trsy/166.html?base=responsible_office

http://www.columbia.edu/cu/administration/policylibrary/policies/trsy/166.html?base=responsible_office

Petty Cash Policy and Procedures

Business

Transcript of Petty Cash Policy and Procedures