UMES Administrative Affairs Manual
Petty Cash Fund
A. Purpose. This statement sets forth university policies and procedures for establishing and maintaining petty cash funds, as well as, requesting reimbursement for petty cash expenditures.
1. A department or activity petty cash fund may be established only after approval is obtained from the Vice President for Administrative Affairs. It is the policy of the university that individual departments will not maintain ongoing petty cash funds. Any department or activity seeking to establish a petty cash fund must submit a written request to the Vice President for Administrative affairs justifying the need for a fund. The Vice President for Administrative Affairs will notify the requesting department of approval or disapproval. If the request is approved, the fund is then established by means of an advance to the department. In general, items that normally would require a purchase order are still to be submitted to purchasing by submitting a requisition.
2. Petty cash funds are established for the specific period of time the funds are actually needed. They may be established for an indefinite period of time if the requirements for the fund are of a continuing nature.
1. The department or activity head must designate one specific individual to act as custodian of the petty cash fund. The custodian shall be responsible for acquiring a thorough knowledge of these procedures and for maintaining the fund in accordance with the guidelines contained herein. Access to the petty cash fund should be restricted to the custodian only. Petty cash funds are not transferable, i.e., any time there is to be a change of custodians, the Comptroller must be notified.
2. Petty cash funds must be kept separate and apart from all other funds. They are not to be commingled with personal funds, miscellaneous cash receipts, or revenue of any type that may have been collected. Neither are they to used for purchasing personal services, making advances to employees, cashing checks, purchasing coffee supplies, or making other non-operating disbursemets.
3. The department or activity head and the custodian of the petty cash fund shall both be jointly responsible for insuring that the funds are properly safeguarded. When not in use, the fund should be stored in a locked container (desk, file cabinet, safe). If a loss of these funds occurs, such loss, depending upon circumstances, may have tobe paid from the department's own funds. All thefts should be reported to the Campus Police and the Comptroller immediately.
4. Each petty cash expenditure must be supported by a vendor's paid receipt or paid invoice. These forms are to be kept with the fund until reimbursement is obtained. It is important to understand that the total of (a) currency and coin on hand plus (b) the unreimbursed vendor receipts or invoices should always equal the total amount of cash advance by the Comptroller. It should be noted that expenditures chargeable to more than one university account may be paid out of a single petty cash fund.
5. Before all petty cash has been expended, the custodian should submit a petty cash reimbursement letter to the Comptroller's office. See example. In general, a petty cash fund that is adequate to the needs of the department should normally require reimbursement once a month. It is suggested that a reimbursement be processed just prior to the close of the fiscal year so that the related expenses can be charged to the proper fiscal year.
6. The amount of petty cash fund may be increased, provided the increase is justified, by submitting a request to the Vice President for Administrative Affairs. A petty cash fund may be reduced whenever the total amount of the fund exceeds the departments need. The excess is to be returned to the Comptroller, thus reducing the amount of risk or exposure.
7. The custodian will be required to confirm the total amount of the petty cash fund to the auditors and may from time to time have the fund counted by the auditors on a surprise basis.
8. All purchases made for the university are exempt from State sales tax. When making a purchase for the university the employee must present the individual's university I.D. card and give the following tax exempt I.D. number 3000256-3.
D. Instruction for Preparation of Petty Cash Reimbursement Letter
Item 1 - Enter "Comptroller"
Item 2 - Enter name of custodian of petty cash fund.
Item 3 - Type entire statement as shown and fill in total amount to be reimbursed.
Item 4 - Enter transaction number (if applicable).
Item 5 - Enter vendor name.
Item 6 - Enter vendor sales slip number.
Item 7 - Enter date of purchase.
Item 8 - Enter description of purchase.
Item 9 - Enter appropriate account number and expense subcode.
Item 10 - Enter amount.
Item 11 - Enter total.
Item 12 - Enter date report is prepared.
Item 13 - Custodian signature.
Item 14 - Department or activity head signature.
Item 15 - Vice President for Administrative Affairs signature.