East Tennessee State University
Financial Procedures
FP - 3
PETTY CASH
I. NATURE OF PETTY
CASH FUNDS
II. PROPER CUSTODY AND CONTROL OF PETTY
CASH FUNDS
III. LIMITATIONS ON USE OF PETTY CASH FUNDS
IV. SECURING OF PROPER RECEIPTS FOR PETTY CASH EXPENDITURES
V. REIMBURSEMENT OF PETTY CASH EXPENDITURES
VI. CASH OVERAGE AND SHORTAGE
I. NATURE OF PETTY CASH FUNDS
When the nature of certain departmental operations requires
a fund for frequent cash purchases of minor items, the
Comptroller's Office will, upon proper justification,
advance to the Department Head a Petty Cash Fund to be
maintained by the Department on a custodial basis.
Such
advances are not chargeable to the department's operating
account but are reflected on the accounting records as an
advance to the Department Head, who is accountable for
proper fiscal and physical control of the fund.
Back to Top
II. PROPER CUSTODY AND CONTROL OF PETTY CASH FUNDS
The custody and control of Petty Cash Funds may be delegated to appropriate personnel; however, accountability and responsibility for proper use and care of the funds remain with the designated Department or Unit Head.
A. The Department Head must insure that facilities for safekeeping of funds are available and must be approved by the Comptroller's Office.
B. Petty Cash Funds, other than advances used in making change, must be kept separated from all other funds, including personal funds, and not co-mingled.
C. The Petty Cash Funds are subjected to audit and should
frequently be balanced to insure that the cash plus
paid receipts on hand equal the amount of the fund.
Back to Top
III. LIMITATIONS ON USE OF PETTY CASH FUNDS
A. Office supplies and materials which are available through other sources may not be purchased through the petty cash account except in emergency situations. If such a purchase is necessary, an explanation must be attached to the voucher.
B. Unless exceptions are specially approved by the University Comptroller, Petty Cash should be used only when the purchase from one vendor is less than twenty- five dollars ($25.00).
C. As a state institution, the University is exempt from the payment of City and State Sales Tax and Federal Excise Taxes. Exemption forms are available from the Comptroller's Office.
D. Loans or advances to employees for personal use from
Petty Cash Funds are forbidden. No
checks may be
cashed from Departmental Petty Cash Funds.
Back to Top
IV. SECURING OF PROPER RECEIPTS FOR PETTY CASH EXPENDITURES
Receipts for Petty Cash expenditures must be obtained from the vendor and must meet the following requirements:
A. All receipts must be originals.
B. The receipts must provide a complete description of the materials purchased or service rendered. If a cash register tape is provided, write the description beside each item on the tape.
C. The vendor's invoice must clearly indicate that it has been paid either by being stamped with the official "PAID" stamp of the firm and containing the name of the firm; by being made out to "CASH SALE"; by having the firm's cash register "CASH SALE" imprint on it; or by being marked "PAID" and signed by the clerk.
D. Receipts cannot be
accepted for reimbursement which
show evidence of alteration.
Back to Top
V. REIMBURSEMENT OF PETTY CASH EXPENDITURES
Whenever
the cash in the fund is depleted to the extent
requiring replenishment, or, in any event, at least once
each fiscal quarter, the paid invoices should be submitted
to the Comptroller's Office for reimbursement.
Back to Top
VI. CASH OVERAGE AND SHORTAGE
If at any time a department's petty cash fund or daily
receipts should be over or short, the overage or shortage
should be reported by telephone to the Comptroller's Office
(X4212 or X4414) immediately. If
the amount of overage or
shortage is determined to be significant by the University
Comptroller, a written report regarding the circumstances of
the overage or shortage must be submitted to the University
Comptroller for a formal report to the Vice President for
Business and Finance and the Tennessee Board of Regents
and the State Comptroller's Office as required by law (TCA
8-19-501).
Back to Top
Original
effective date: April 9, 1982
Revised: October 1, 1987; October 16, 2000
Last review: October 2, 2003
Web page last updated 09/21/04