Policies and Procedures
Policy 304 – Petty Cash Funds
January 1, 1999
November 11, 2014
November 11, 2014
Petty cash or change funds are authorized funds to enable the departments to manage minor departmental expenditures or to give change to customers when they are paying for goods and services.
Safekeeping and Control of Petty Cash Funds
The dean, director or department chair is responsible for the proper safeguarding and use of petty cash monies entrusted to their departments. Administration of the fund may be delegated to a petty cash custodian within the department. The petty cash custodian is personally responsible for the cash which was specifically issued in the individual's name. Therefore access to the fund must be limited to the custodian. The funds should be secured at all times, preferably in a locked place.
Restrictions on use of petty cash funds
Petty cash funds are not established to bypass the University's accounts payable and purchasing policies and procedures. Specifically, petty cash funds should not be used to:
- Purchase goods currently covered by University negotiated contracts
- Make payments for personal services (i.e., typing, photography, entertainers, caterers, etc.) that would be considered either wages (salary) or independent contractor payments.
These payments have tax consequences and must be reported. All payments for personal services must be paid through either:
1. The payroll system, or
2. The accounts payable system, for making payment to an independent contractor.
- Issue advances
- Pay gifts, awards, prizes
- Issue personal loans or cash personal checks
- Pay travel reimbursements
- Pay membership dues
Receipt of cash or checks by the department may not be commingled with petty cash funds.
Deposit of petty cash in a bank account
When the size and use of the fund warrants, and with approval of the University Controller, all or a portion of the petty cash fund may be deposited in a separate bank account, called an imprest checking account.
Escheat of checks
If the petty cash is deposited into a bank account and checks are issued to pay for minor expenditures, then the petty cash fund is subject to the Escheat Statute of the State of North Carolina. Escheat Statute requires that uncashed checks are to be remitted to the State Treasurer's Office when the owner cannot be located and the custodial period has elapsed. All University departments and units must be in compliance with the Escheat Statute.
Audit of Petty Cash Fund
Petty cash funds are subject to periodic audits. Recurring audit findings may result in the petty cash fund being revoked. The custodian is responsible for ensuring the cash on hand and receipts equal the authorized amount of the funds at all times. Petty cash funds must not be commingled with personal funds, cash drawers, or any other collected revenue.
Accounting Services will request an annual confirmation of the petty cash funds as of the last business day of the fiscal year end (June 30 or earlier). Timely return of the confirmation by the department is required as the reported information will be used in the University's Comprehensive Annual Financial Report (CAFR).
Frequency of Reimbursement
The petty cash fund should be reimbursed at least once a month or when the cash is depleted to the extent requiring replenishment.
Overage, Shortage, or Theft
Overages, shortages, or theft must be handled on an individual basis. For instructions in the event of overages, shortages, or theft, contact Cash Management in Accounting Services.
Closing Petty Cash Fund
If petty cash funds are no longer required, then it should be closed. The petty cash custodian should complete the closing procedure, and the responsible person should notify and request the University Controller to close the petty cash fund.
Reason for Policy
Petty cash funds or change funds are used by the departments for cash payment of minor items or to make change to customers. This policy provides guidance for the authorization, establishment and maintenance of petty cash funds, including appropriate uses, safekeeping, audit and annual confirmation.
- 304.1 – Establishing, Maintaining and Closing a Petty Cash Fund Account
Frequently Asked Questions
Q: Can study subjects be paid with petty cash?
A: No, study subjects must be paid through imprest checking accounts or cash advances.
306 - Imprest Checking (Bank) Accounts
|Imprest Checking Accounts||Cash Management||919-962-0036||919-962-3306|| cash_management@
|Imprest Checking Reimbursement||Disbursement Servicesfirstname.lastname@example.org|
November 11, 2014: Added FAQ on paying study subjects.
March 29, 2010