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 Financial
Services 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.
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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 Financial Services 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.
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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 Financial Services office, 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 Financial Services 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.
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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.
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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 Financial Services Office
for reimbursement.
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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 Financial Services Office (X4212 or X4414)
immediately. If the amount of
overage or shortage is determined to be significant by the University Financial
Services Office, a written report regarding the circumstances of the overage or
shortage must be submitted to the University Financial Services Office 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).
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Original effective date: April 9,
1982
Revised: October 1, 1987; October 16, 2000; February 22, 2010
Last review: October 2, 2003
Web page last updated 2/22/2010