OSU FIS 1402-10: Petty Cash

Purpose

To pay for small office type supplies, making change, making small volume purchases when a procurement card is not available and when reimbursement must be made to employees.

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Policy

Petty cash is not for the purpose of paying for refreshments, meals, entertainment, travel, registrations, or membership. Petty Cash purchases have the same documentation requirements and fall under the same restrictions as other OSU purchases. Petty Cash may not be used for refreshments, entertainment, travel, registrations, or membership. In addition to the prohibited items, conference registration is also not allowed.

Petty Cash funds should be kept as small as possible. The cash should be kept in a locked secured area. The receipts for items that have been purchased, but not yet reimbursed should be kept in a separate place from the cash.

Note:

Use of petty cash is discouraged. Wherever possible, departments are encouraged to use a procurement card to handle small volume purchases.

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Procedure

Contact the Business Affairs Operations Manager to set up a Petty Cash Fund. The fund is established under an individual’s name, and that person will be the petty cash custodian. The department head is responsible for informing Business Affairs when there is a change in the designated custodian. The Business Affairs Operations Manager must approve and process any changes to the custodian information.

Custodian Responsibilities:

• Ensure that appropriate receipts are obtained to support any disbursement.
• Ensure that the expenditure is appropriate in nature.
• Ensure that the petty cash fund is reconciled at all times. THE PAID RECEIPTS OR INVOICES PLUS THE CASH SHOULD ALWAYS EQUAL THE FUND BALANCE.
• Ensure that the funds are kept in a secure location, such as a locked cash box or desk drawer. The Custodian should maintain possession of the key. Funds should never be left unlocked or unattended and should be concealed from general view when not in use.
• Petty cash funds and associated documents should not be combined or commingled with any other departmental funds.

Receipts must be provided for authorized purchases. No money should be disbursed from the petty cash fund to reimburse a person unless a paid receipt or invoice is presented. If receipts are not issued for a type of expense incurred, (e.g. parking meters, pay phone calls, etc.) then a written note describing the expense is required. The person who made the expenditure must sign the note.

If cash is advanced to make an authorized purchase, a petty cash advance slip should be signed showing the amount of money the individual received. When the unspent money and a paid receipt are returned, the advance slip should be destroyed.

Reimburse the petty cash fund no less often than quarterly.

The documentation and redistribution of charges is the same that is required for the Purchasing Cards. Reimbursement requests redistributing the purchases to the appropriate index and account code are entered into FIS Banner by the department and submitted to Business Affairs Accounts Payable office for approval. The check is made payable in care of the petty cash custodian.

At fiscal year end a report is sent to the custodian. The completed report is returned to the Business Affairs Operations Manager as part of the year end closing process.

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Additional Information

See the listing of restricted uses of the OSU Purchasing card on the Business Affairs website.

State Accounting Manual Section Number 44 05 08 (Cash Control Guidelines).

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