Petty Cash

Category: Operations
Number: OPS-010-040
Audience: All University employees
Issued: October 17, 1997
Revised: October 15, 2018
Owner(s): AVP (Finance)
Approved by: VP (Administration)
Contact: Financial Analyst (Accounts Payable/Banking/Trust) - 306-585-4185

Introduction

This policy applies to all University employees. It sets out the University’s policy on petty cash funds, faculty and department responsibilities for these funds, and processes for establishing, replenishing, verifying, and terminating them.

Units that require petty cash infrequently do not need to establish their own petty cash fund as Financial Services maintains a fund that may be accessed by other units; for information about using this fund, contact the Financial Analyst – Accounts Payable/Banking/Trust.

Policy

Financial Services will establish a petty cash fund for a faculty, department, or other budgetary unit that requires a small sum of money on hand to pay for minor incidental expenses.

All petty cash funds must have a custodian, and all custodians must keep the petty cash they are responsible for under lock and key in a cash box. The custodian is responsible for safeguarding, maintaining, and accounting for the fund.

Petty cash may be used for purchases of $75 or less.

  • Every purchase must be chargeable to a University account.
  • A paid invoice or a receipt must support every purchase.
  • An authorized person must have approved any amount that is chargeable to a research grant, special purpose account, or against the budget of a faculty or department.
  • Petty cash may be used to pay an honorarium of less than $75 for a non-employee. A description of the honorarium and the signature of the person who received the honorarium must support the payment. (Please note: All other honoraria must be paid through Human Resources, so the appropriate T4A is generated.)

Petty cash may not be used to:

  • pay salaries, wages, or honoraria over $75 (Refer to the Honorarium Guideline - requires employee login to URSource),
  • cash cheques,
  • grant loans,
  • pay Tri-Agency research expenses,
  • pay parking tickets (not allowable expenses from any funds), or
  • purchase any type of gift. (Refer to the University's Gift Giving and Staff Functions policy.)

A petty cash fund may not be transferred from one custodian to another without the approval of Financial Services and the dean or department head. To request a change, complete the Petty Cash Change Request Form (55.5 KB) DOC and forward it to Financial Services.

Petty cash funds are imprest funds. At all times the cash on hand, plus vouchers or invoices representing amounts paid from petty cash, plus the amounts awaiting reimbursement must equal the value of the fund.

All petty cash funds will be verified at year-end.

Consequences for Noncompliance

Noncompliance with this policy could result in termination of the petty cash fund and/or a requirement for the custodian to reimburse the fund with personal funds.

Processes

Establishing and Using a Petty Cash Fund

  1. A member of the faculty or department sends a request to establish a petty cash fund to the dean or department head. The request must include the following information:
    • proposed use for the fund,
    • dollar amount required, and
    • name of the employee the fund will be issued to (i.e., the custodian).
  2. The dean or department head reviews and approves the request and forwards it to the Financial Analyst – Accounts Payable/Banking/Trust in Financial Services.

  3. Financial Services sets up the petty cash fund and sends a cheque to the custodian (payable to the custodian).

  4. The custodian cashes the cheque, obtaining whatever denominations of money are required to most effectively manage the fund.

Remember, the cash on hand, plus vouchers or invoices representing amounts paid from petty cash, plus the amounts awaiting reimbursement must equal the value of the fund. If the receipt shows pennies, penny rounding procedures need to be followed (https://www.uregina.ca/fs/employees/receiving-money/penny-rounding.html).

Example

If the fund is $100.00, and $48.70 has been spent on a step stool (for which the custodian has already requested reimbursement), and since the request for reimbursement, $10.25 has been spent on tape, $4.30 on stamps, and $22.40 on a hammer, the custodian must have $14.35 on hand.

                          Total fund value $100.00
Step stool (reimbursement requested)   -48.70
Tape   -10.25
Stamps   - 4.30
Hammer   -22.40
Cash on hand $  14.35

Replenishing a Petty Cash Fund

To obtain reimbursement for expenditures made from petty cash funds and replenish the fund:

  1. The custodian completes a Petty Cash Reimbursement Claim (29.5 KB) XLS form and submits it along with the approved paid invoices or receipts, to the Miscellaneous Disbursements clerk in Financial Services.
    • To charge expenditures appropriately, the FOAPAL and clear descriptions of the expenditures must be completed as indicated on the claim form. For example, if the majority of expenditures were for materials and supplies (account 6102), but one was for postage (account 6110), the materials and supplies must be coded to account 6102 and the postage to account 6110.
    • To ensure the proper rebates or input tax credits are received for the GST paid, the column on the extreme right must also be completed
  2. Financial Services prepares and sends a reimbursement cheque to the custodian.

    
  • Financial Services produces cheques on Thursdays. To produce a reimbursement cheque on Thursday, Financial Services must receive the claim by end of day Monday.

Verifying Petty Cash Funds at Year-End

  1. On April 15, the custodian forwards all vouchers on hand to Financial Services to replenish the petty cash fund. (See Replenishing a Petty Cash Fund.)

  2. Financial Services sends a reimbursement cheque to the custodian before April 30. (This ensures the fund is intact at year-end.)

  3. On April 30, the custodian counts the money in the fund and completes the Petty Cash Year-End Report (75.5 KB) XLS.

  4. The dean or department head verifies the custodian’s count and signs the report.

  5. The custodian signs the report and returns it to the Miscellaneous Disbursements clerk in Financial Services, ensuring all items paid from petty cash funds before year-end are recorded in the University’s financial records.

Terminating a Petty Cash Fund

  1. The custodian or the dean or department head who approved the petty cash fund completes the Petty Cash Reimbursement Claim form, indicates on the form that the fund is to be closed, and attaches all paid invoices and receipts to the form.

  2. The faculty or department delivers the remaining cash in the fund, along with the completed Petty Cash Reimbursement Claim form and attachments, to the Miscellaneous Disbursements clerk in Financial Services. (The amount of the invoices, receipts, and cash must total the amount of the fund.)

  3. Financial Services closes the petty cash fund, credits the total value of the returned cash, invoices, and receipts to the fund, and issues a receipt for the cash to the faculty or department.


Example

If the fund is $100.00, and $48.72 has been spent on a step stool (for which the custodian has already requested reimbursement), and since the request for reimbursement, $10.25 has been spent on tape, $4.30 on stamps, and $22.40 on a hammer, the custodian must have $14.33 on hand.

Total fund value

$100.00

Step stool (reimbursement requested)

- $48.72

Tape

- $10.25

Stamps

- $4.30

Hammer

- $22.40

Cash on hand

= $14.33

Related Information