Office of Procedures, Records, and Forms Business Policies and Procedures Manual

FINANCE
30.50
Revised 4-05

For more information contact:
   Controller’s Office
   509-335-8165

Petty Cash Funds

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Policy

Administrative units which make frequent purchases in circumstances which do not permit usual WSU purchasing procedures may request the University Controller’s approval for a petty cash fund (SAAM 85.50.50 and 85.50.70).

Definition

Petty cash funds are revolving imprest accounts which are used to make miscellaneous small or emergency purchases. Petty cash funds as described in this section are supported by accounts in programs 01-10 and 15 and above.

Alternatives

Cash Advance

Request a cash advance when monies supporting the fund are in programs 11-14 (sponsored accounts). See BPPM 40.21.

Till Cash Funds

For a description of till cash funds see BPPM 30.51.

Standard Procedures

Before requesting establishment of a petty cash fund, the responsible administrator ascertains that the goods and services to be purchased cannot be obtained from one of the following:

  • An on-campus vendor (service center), e.g., University Stores.
  • An off-campus vendor using standard purchasing procedures described in BPPM 70.10, or an established blanket purchase order described in BPPM 70.19.

Fund Custodian

The department chair or other equivalent administrator designates a fund custodian who is responsible for maintaining the petty cash fund.

Change of Custodian
  • The responsible administrator notifies the Controller by memorandum when a new individual becomes custodian of an existing petty cash fund.
  • The fund custodian insures that the fund is replenished before it is turned over.

Prohibited Purchases

Only appropriate and legitimate University expenses are paid from a petty cash fund. Since cash purchases bypass Purchasing’s control over procurement, the fund custodian and the appropriate administrator must carefully restrict and monitor petty cash funds. Do not use petty cash funds to pay for the following types of purchases:

  • Travel expenses
  • Entertainment expenses
  • Personal items
  • Payment for personal services or honorariums
  • Payment of WSU employees for services rendered

Establishing or Increasing a Petty Cash Fund

All new petty cash funds or increases to existing funds must be approved in advance by the Controller.

Initiate a requesting memorandum to the Controller at least ten days before the fund or additional money is needed. The memorandum includes the following:

  • Name and account code of the department which will assume responsibility for the expenditures.
  • Amount of money required — Normally a one-month supply.
  • Security procedures and facilities.
  • Specific location of the fund — Building and room number.
  • Name of the custodian who will be responsible for safeguarding and dispensing fund cash.
  • Approval signature of the department chair or equivalent administrator.

If the Controller grants approval, Controller’s Office personnel prepare a check for the specified amount.

Using the Petty Cash Fund

The individual who wishes to make a purchase describes the nature of the purchase to the fund custodian.

If the custodian determines that the planned purchase is appropriate, they provide the individual with a check or cash for the amount of the purchase.

The custodian prepares a brief note to be filed with the fund which includes:

  • Date
  • Amount of cash outstanding
  • Name of the purchaser
  • Nature of the planned purchase
  • Custodian’s initials

At the time of purchase, the WSU customer requests that the vendor prepare a written receipt that names Washington State University as the buyer.

The fund custodian maintains a current record of the fund’s financial status. The following format is recommended:

DateDescriptionPurchasesReimbursementsBalance
9/9/01Beginning balance$50.00
9/12/01Pullman Radio-TV$5.00$45.00
9/23/01NW Mountain Sports$10.00$35.00
9/30/01UPS$7.00$28.00
10/4/01Reimbursement$22.00$50.00

At any given time, receipts plus cash outstanding (as documented by the file notes) plus available cash must equal the original amount issued by the Controller. Petty cash funds are subject to audit by the Internal Auditor and state of Washington auditors.

Replenishing the Petty Cash Fund

Monthly

Replenish petty cash funds at least monthly unless the reimbursable amount is less than $100. When reimbursement is less than $100, the fund custodian may seek reimbursement less often than once a month.

End of Fiscal Year

Replenish petty cash funds at the end of the fiscal year (prior to June 30) in order to charge expenditures to the proper accounting period.

Cash Deposit Report used to deposit two checks; a payment on a previous charge (Cash on Account) and a payment not involving a previous charge.

Cash Deposit Report used to deposit a recovery of a prior expenditure.

State of Washington Invoice Voucher
Figure 1 State of Washington Invoice Voucher
Requesting Reimbursement

To request reimbursement, submit a state of Washington Invoice Voucher summarizing all expenditure receipts. Arrange receipts in chronological order and attach them to the invoice voucher (see Fig. 1 and BPPM 30.45).

  • Indicate the fund custodian’s name and campus mailing address under “Vendor or Claimant.” If the check is to be picked up, delete the address. Make a notation, “Call Jane Doe at 5-4967 for check pickup.”
  • Type “To reimburse petty cash fund per attached receipts” under DESCRIPTION.
  • List receipts in chronological order on the Invoice Voucher. Indicate purchase date, check number, vendor, item purchased, and receipt number under DESCRIPTION.
  • Add all expenditures and indicate the total.
  • Indicate the account codes for the budgets which will assume the expenditures.
  • The fund custodian signs the vendor’s certificate.
  • The fund custodian’s supervisor or the department chair signs the signature block under AUTHORIZED SIGNATURE.

The Controller’s Office requires approximately one week to process each request.

Safeguarding the Petty Cash Fund

Checking Account

The Controller’s Office requires that petty cash funds which exceed $100 be placed in a checking account at a local bank unless there is a demonstrated need to maintain cash in the department and there are adequate security facilities available.

Notify the Controller’s Office of the bank name and location, and account name and number when the account is opened. If the account is with an out-of-state bank, follow procedures in BPPM 30.65 for obtaining additional approval.

Title of Account

The account should be titled, “WSU (name of department) Petty Cash Account.”

Reconciliation

The fund custodian is responsible for ensuring that the bank statement is reconciled each month. If possible, an employee other than the fund custodian should reconcile and sign the reconciliation of the bank statement.

Small Funds

Place smaller funds and expenditure documents in a safe place, e.g., safe, vault, locked desk drawer.

Commingling Funds

Do not combine or commingle petty cash funds and associated documents with other funds.

Missing Cash

Report the loss to the Controller’s Office and the Internal Auditor. Notify local police if theft is suspected. All suspected thefts are to be treated confidentially since an investigation may be ongoing.

Close-Out

When the fund is no longer needed:

  • Notify the Revenue Section of the Controller’s Office.
  • Process all outstanding receipts for reimbursement.
  • Deliver the entire amount to the Cashier’s window in the French Administration Building.

Recall

Controller’s Office personnel may recall a petty cash fund when no activity has occurred for a period of three months.