NOTICE: The Finance Policies and Procedures Manual, along with the previous manual, is undergoing changes. These sites are continually updated to reflect changes in business processes. If you cannot find the information you are seeking in these policies, email financecomm@unc.edu for more information.
Policies and Procedures

Procedure 304.1 – Establishing, Maintaining and Closing a Petty Cash Fund Account

Effective
January 1, 1999
Last Updated
September 17, 2015
Last Reviewed
September 17, 2015
Responsible University Officer
University Controller
Responsible Unit
Accounting Services

Procedure Statement

Establishing a petty cash fund

To establish a petty cash fund, the dean, director or department chair should submit a letter to the University Controller justifying the need, the types of expenses to be paid, the method of safekeeping, the source of funds, the amount needed and the individual responsible for the administration of the petty cash fund (petty cash custodian).

Upon approval by the University Controller, Accounting Services will prepare a campus voucher for the approved amount, payable to the petty cash custodian, and submit to Disbursement Services. Disbursement Services will issue the check to the petty cash custodian, who will then administer petty cash funds, implement proper controls to safeguard cash, and use it for the intended purposes.

Maintaining a petty cash fund
Maintaining a petty cash fund includes timely replenishing, increasing, or decreasing the authorized amount.

To replenish a petty cash fund, the petty cash custodian will perform the following:

  • Obtain receipts for all payments made from petty cash funds. An acceptable receipt should include the date of the transaction, a brief description of the materials purchased or the services rendered; the total cost; and a clear indication that the charge has been paid. Receipts that bear evidence of alteration cannot be accepted or processed.

When the vendor's printed invoice form is used as a receipt, the invoice must clearly indicate that it has been paid. For example, the vendor may stamp the invoice with the official "Paid" stamp of the firm, or make the invoice out to "Cash Sale" and use the firm's cash register receipt with "Cash Sale" imprinted on it; or may mark the invoice "Paid" and sign or initial it.

  • Complete Petty Cash Imprest Checking Reimbursement Voucher and submit to Disbursement Services with receipts. Disbursement Services will review, approve account charges, and issue a check to the petty cash custodian.

Reconcile and replenish the petty cash fund at least once a month or when needed.

Due to increased activity, the department or a unit may need to increase an established petty cash fund. The dean, director or department chair should submit a letter to the University Controller justifying the need for an increase in the petty cash fund. Upon approval by the University Controller, Accounting Services will prepare a manual check request for the requested amount, payable to the petty cash custodian, and submit to Disbursement Services for check issuance.

If the increased petty cash is no longer needed or if the established petty cash fund needs to be reduced due to decreased level of activity, then the petty cash custodian must complete the following:

  • Monitor petty cash fund activity to determine the excess funds to be returned.
  • Reconcile petty cash fund to ensure available funds equal to the funds to be returned. If less, replenish petty cash funds for the payments made and process the request to decrease.
  • Deposit the excess cash with the University Cashier using the online Departmental Deposit System.
  • Provide chartfield information for posting the deposit.
  • Notify Cash Management in Accounting Services of the department's intention to decrease the petty cash fund.

Closing a petty cash fund

  • Reconcile and replenish petty cash fund.
  • The petty cash custodian should deposit the funds with the University Cashier using the online Departmental Deposit System for the amount equal to the initial established amount plus any increase minus any decrease in petty cash funds since it was established.
  • Provide appropriate chartfield string for posting the deposit.
  • The dean, director, or department chair should notify the University Controller of the department's intention to close the petty cash fund.
  • Accounting Services will verify the deposit; match the notification of closing forwarded by the University Controller, and close the petty cash funds file.

Forms and Instructions

  • 304.1.1f – Petty Cash Imprest Checking Reimbursement Voucher
  • 304.1.2f – Uniform Receipts for Payments made from Petty Cash

Related Data

None

History

Revised:
September 17, 2015: Updated references to ConnectCarolina functions.
March 29, 2010