Payments
Policy
FIACCT 05-23_01 Payments – Agency Cash Funds – Petty Cash Funds
Effective: December 6, 1982
Revised: January 1, 2015
Reviewed: January 1, 2015
Purpose
This policy defines the policies of the Division of Finance regarding Petty Cash funds.
Policy
A. All Petty Cash funds will be approved by the Division of Finance.
B. Expenditures from Petty Cash funds are limited to small incidental items such as insufficient postage, court filing fees, and other items not available through State Purchasing contracts. The State Purchasing Card may also be used to purchase small incidental items.
C. Petty Cash funds may not be used for:
Employee travel or wages
Cashing of personal or payroll checks
Loans (IOUs) to employees or others
Utility bills
Registration fees
Memberships and dues
Services
D. Each disbursement is to be supported by a Form FI 52, Petty Cash Request Form, or an equivalent agency form, and an original, itemized receipt.
E. All Petty Cash funds are to be replenished at least once a month.
F. All Petty Cash funds must be submitted for reimbursement at the end of each fiscal year by June 30 so that all expenditures made on or before June 30 can be expensed in the proper year.
G. Agencies should require an employee independent of the Petty Cash custodian to conduct periodic reconciliation of the Petty Cash funds.
H. Unused bank accounts must be closed in a timely manner. Agencies must notify the State Treasurer’s Office when closing a Petty Cash bank account
Definitions
Petty Cash Fund
An account into which a fixed amount of money is placed for the purpose of minor disbursements. As disbursements are made, a voucher is completed to record their date, amount, nature, and purpose. At least once a month, or when the money is completely expended, a report substantiating vouchers is prepared and the account is replenished for the exact amount of the disbursements. Appropriate accounts are charged. The total of cash plus substantiating vouchers must at all times equal the total fixed amount of money set aside in the account.
Procedures
Responsibility
Action
Establishing a Petty Cash Fund
Department
Submit a written request and justification for the Petty Cash fund to the Division of Finance.
Prepare an Acceptance of Cash Custody, Form FI 10, and have it signed by the fund custodian and the department head or authorized agent. Attach the form to the written request.
Division of Finance
Work with the requesting department to determine the size of the requested fund.
Review the request and approve or disapprove.
Department
If the Petty Cash fund is large, or would operate better with the use of checks, obtain approval from the State Treasurer to open a non interest bearing checking account.
Provide the Division of Finance and the State Treasurer with the
following checking account information:
Bank
Location
Account Number
State Treasurer
Review requests for Petty Cash checking accounts and approve or disapprove the request. Provide instructions for setting up those accounts that are approved.
Division of Finance
Issue the warrant to the agency from the General Fund, and establish a custodian number (vendor number) for the fund custodian.
Maintaining Funds
Department
Maintain funds under lock and key and restrict access to the funds.
Keep funds on hand and available for the audits by the State Auditor, the Legislative Auditor General, or the Division of Finance.
Report any shortages immediately to the Division of Finance.
Accounting for Funds
Department
Attach the Petty Cash Request Form, FI 52, or equivalent agency form to the receipt and keep on file for use when replenishing the fund.
Replenishing the Fund
Department
Replenish the Petty Cash fund at least once a month by preparing a Petty Cash Reimbursement Request, Form FI 53, and attaching all completed Petty Cash Request Forms, FI 52 and the vendor invoices/tickets. Enter directly in FINET as a GAX transaction.
Replenish the Petty Cash fund at the end of the fiscal year by June 30 so that all expenditures made on or before June 30 can be expensed in the proper year.
Transferring Custody
Department
Submit a letter to the Division of Finance indicating which Petty Cash fund is being transferred to a new custodian and listing the name of the former fund custodian and custodian number. Include with the letter an Acceptance of Cash Custody, Form FI 10, signed by both the new custodian and the department head or authorized agent. Provide certification from the department’s chief financial officer or the department head that the fund has been audited by an employee independent of the fund custodian and that all funds are properly accounted for at the time of the transfer request. If the custodian is the chief financial officer, request an audit by the Division of Finance.
Division of Finance
Cancel the old Acceptance of Cash Custody, Form FI 10 for the old custodian number, and file it with the letter requesting the transfer of custody.
To Increase the Fund
Department
Submit to the Division of Finance a written request and justification for increasing the Petty Cash fund. Include with the letter an Acceptance of Cash Custody, Form FI 10, signed by both the custodian and the department head or authorized agent, indicating the original amount of the fund, the amount being increased, and the new amount in the fund.
Division of Finance
Review the request and approve or disapprove.
Utilizing the vendor number assigned, issue the warrant to the Petty Cash custodian from the General Fund.
To Decrease the Fund
Department
Deliver the amount of the decrease to Division of Finance. This can be in the form of cash, check, or money order. Checks or money orders must be made out to the State of Utah. Include with the letter an Acceptance of Cash Custody, Form FI 10, signed by both the custodian and the department head or authorized agent, indicating the original amount of the fund, the amount being returned, and the new amount in the fund.
Division of Finance
Review the Acceptance of Cash Custody, Form FI 10, to ensure the amounts on the form are accurate. Process a Cash Receipt (CR) transferring the money back into the General Fund.
To Close a Fund
Department
Deliver the entire amount of the fund to Division of Finance. This can be in the form of cash, check, or money order. Checks or money orders must be made out to the State of Utah. If the fund is in a bank checking account, the agency must close the bank account in a timely manner and notify the State Treasurer’s Office.
Division of Finance
Audit the account to ensure all funds are properly accounted for. Cancel the Acceptance of Cash Custody, Form FI 10, and the custodian number. Process a Cash Receipt (CR) transferring the money back into the General Fund.
Lost or Stolen Fund
Agencies are required to maintain the funds under lock and key and to restrict access to the funds. If a fund is lost or stolen, agencies are required to expense the loss from their department’s appropriation
Department
Submit a letter to the Division of Finance indicating the circumstances that occurred when the fund was lost or stolen. Indicate what changes have taken place to ensure that the fund is properly secure and to prevent the situation from recurring. The letter must be signed by the Department Director or designee. Attach this letter to approved FI 50, properly coded to debit the department funds.
Division of Finance
Review the letter, make any further recommendations to ensure that the fund is properly secured, and issue to the department a warrant to replace the fund. The check will be sent directly to the Custodian of the fund.