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Policy No: 2016
Responsible Office: Student Financial Services
Last Review Date: 06/26/2023
Next Required Review: 06/26/2028
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Policy No: 2016
Responsible Office: Student Financial Services
Last Review Date: 06/26/2023
Next Required Review: 06/26/2028
Petty Cash
1. Purpose
The Office of Student Accounting will maintain a petty cash fund from which employees may seek reimbursement for certain minor purchases. When the nature of certain departmental operations requires a fund for cash purchases of minor items, for making change for cash transactions, or for payment to research participants for incentives or reimbursement of participant costs, a departmental petty cash fund may be established upon proper justification and approval. This fund will be maintained by the department on a custodial basis.
2. Applicability
This policy applies to all ºÚÁϳԹÏÍø campus-based Divisions (excludes ºÚÁϳԹÏÍø Health).
3. Definitions
Not Applicable.
4. Policy Guidelines
4.1 Responsibility and Control of Petty Cash Funds
4.1.1 The accountability and responsibility for proper use and security of the petty cash fund rests with the Custodian of the petty cash fund, which must be a Department Head, or if grant funded, the Principal Investigator (“PI”).
4.1.2 The Custodian may assign custody and control of petty cash funds to appropriate personnel. If control of petty cash funds are assigned to another individual (“Delegate), it is the responsibility of the Custodian to communicate the assignment, in writing, to the Office of Student Accounting, and the Delegate must acknowledge the acceptance of the assignment. The Custodian maintains ultimate responsibility for compliance with the policies described herein, even if control is assigned to a Delegate.
4.2 Establishing a Petty Cash Fund
4.2.1 The Custodian must complete the required information within the Doc Route System and affirm their review and understanding of the policies surrounding petty cash. A component of the required information is a detailed explanation of why the petty cash funds are being requested. This explanation should include any relevant background details surrounding the request, the purpose of the petty cash fund, and why the requested dollar amount is necessary. If grant funded, the relevant background details should, at a minimum, include the name of the study, IRB number, and the reason for incentives if applicable.
4.2.2 Proper approvals in the Doc Route system will lead to the establishment of the petty cash fund.
4.2.3 The Student Accounting representative will prepare a direct pay for the Custodian and process it through Concur.
4.2.4 The Student Accounting representative will deliver the petty cash check to the Custodian and explain the Petty Cash Policies and Procedures. If the Custodian assigns control of the petty cash funds to a Delegate (per 4.1.2) it is the responsibility of the Custodian to either (1) include the Delegate in this process with the Student Accounting representative or (2) separately explain the Petty Cash Policies and Procedures to the Delegate.
4.2.5 An acknowledgment form for receiving the check and understanding the Petty Cash Policies and Procedures will be signed by the Custodian and delegate, if designated.
4.2.6 The petty cash check is to be cashed by the Custodian (or delegate) at either Hancock Whitney, or the ºÚÁϳԹÏÍø Federal Credit Union. Petty cash checks are not to be deposited into any bank account, including the bank account of the custodian or delegate.
4.3 Limitations on the Use of Petty Cash Funds
Departmental petty cash funds must not exceed $500.00, unless approved by the Executive Director, Student Financial Services.
4.3.1 Petty Cash expenditures, except when pre-approved for research purposes, should not exceed $50.00 and must match the IRB approved protocol.
4.3.2 Loans or advances to employees for personal use from petty cash funds are not allowed.
4.3.3 Cashing of personal checks from petty cash funds is not allowed.
4.3.4 Reimbursement from petty cash funds for travel expenses and travel advances are not allowed. Travel expenses include parking fees, toll charges and gasoline.
4.3.5 Reimbursement from petty cash funds for food expenses, entertainment expenses, meeting fees, etc., is not allowed.
4.3.6 Reimbursement from petty cash funds for personal services is not allowed.
4.3.7 Petty cash expenditures are subject to the same restrictions imposed by the State or the University as are other expenditures.
4.3.8 Reimbursement for recurring purchases that include sales tax and could be purchased through the University’s purchasing system is not allowed.
4.3.9 Departments should use petty cash reimbursement as a means of purchasing items only in emergency situations or in other infrequent situations where it would be difficult or not cost effective to use the University’s purchasing system.
4.3.10 To take advantage of the University’s exemption from the payment of sales tax, departments are encouraged to use the University’s purchasing system whenever possible and reasonable.
4.4 Maintaining a Petty Cash Fund
Initiation of fund maintenance begins with the receipt of the petty cash fund proceeds from the Office of Student Accounting.
All records must be kept for three years in accordance with the State of Alabama Record Retention Schedule.
Petty cash funds must be reconciled at least once a week and the count should be documented and available for review. Overages and shortages exceeding $10.00 must be reported to the Office of Internal Audit with a description of possible causes and any corrective action taken.
4.4.1 Facilities for safekeeping the fund must be available and approved by the Office of Student Accounting. Petty cash funds $1,000 and above are required be stored in an immovable lockbox or safe.
4.4.2 Paid receipts must be obtained from vendors for all purchases made using petty cash funds.
4.4.3 Paid receipts must represent positive evidence of payment and include: vendor name, vendor location, and date of purchase. They must also set forth complete descriptions and itemized amounts of items purchased. Receipts cannot be accepted or processed that bear evidence of alteration.
4.4.4 A comprehensive research distribution log and individual participant payment receipts must be maintained for all research participant incentive payments and reimbursement of research participant cost payments.
4.4.5 The log must include: research project name, IRB number, payment date, research participant name or confidential identifier, payment amount, research participant signature or initials, custodian (or study team member who disbursed the funds) signature or initials. All participant visits should be logged individually, not combined into one lump sum payment.
4.4.5.1 All receipts/logs for research participants are considered confidential subject information and will not be included on any receipt or log submitted to Accounts Payable. Information identifying human subjects being paid should be kept at the research site.
4.4.6. To comply with tax reporting requirements the custodian of the fund must notify Accounts Payable of any research participant who received over $600 in one calendar year and be made aware of this during the informed consent process.
4.4.7 Petty Cash Vouchers (click for form) must be approved by the Custodian or Delegate. The department head must notify the Office of Student Accounting in writing if a person other than the custodian is authorized to approve petty cash vouchers. If a customized Petty Cash Voucher is utilized by the Custodian or the Delegate, it is the responsibility of the Custodian to obtain the approval from the Office of Student Accounting to utilize the customized form.
4.5 Requesting Reimbursement / Replenishment for Petty Cash Expenditures
4.5.1 Petty cash expenditures reimbursed by the Office of Student Accounting must be submitted on a Petty cash voucher (attached) signed by the Custodian or Delegate. Petty cash vouchers must be fully executed and supported with proper receipts (research logs when applicable) attached. The Office of Student Accounting has the authority and responsibility to refuse reimbursement for any expenditure not properly approved or supported.
4.5.2 Frequency of reimbursement – The petty cash Custodian should seek reimbursement as soon as possible. The Custodian is responsible for safe keeping of the petty cash fund and processing replenishments through Concur.
4.5.3 For Research Projects, the Grant Fund FOAPAL will be used when processing replenishments through Concur.
4.5.4 The Custodian is responsible for cashing the petty cash replenishment check and reconciling the petty cash fund, subject to the same rules as noted in section 4 for the original petty cash fund check.
4.5.5 Petty cash closeout – When a department determines there is no further need for the petty cash fund, the Custodian must replenish the petty cash fund to its original balance and reconcile to the amount originally established on the general ledger. The Custodian should prepare a memo stating the intent to close the fund and fill out a Departmental Deposit form. The memo and form, along with any applicable supporting documentation or remaining funds, should be taken to the Office of Student Accounting for processing.
4.5.6 Petty Cash closeout - (Grant Funded) The portion of grant funds that have been used each year should be closed out on an annual basis (by Sept 30th) to insure all expenditures associated with the grant are charged to the grant account in a timely manner.
4.6 Petty Cash Closeout
4.6.1 Petty cash closeout – When a department determines there is no further need for the petty cash fund, the Custodian must replenish the petty cash fund to its original balance and reconcile to the amount originally established on the general ledger. The Custodian should prepare a memo stating the intent to close the fund and fill out a Departmental Deposit form. The memo and form, along with any applicable supporting documentation or remaining funds, must be taken to the Office of Student Accounting for processing.
4.6.2 Petty Cash closeout - (Grant Funded) The portion of grant funds that have been used each year should be closed out on an annual basis (by Sept 30th) to insure all expenditures associated with the grant are charged to the grant account in a timely manner.
4.6.2 Petty Cash closeout - (Grant Funded) The portion of grant funds that have been used each year should be closed out on an annual basis (by Sept 30th) to insure all expenditures associated with the grant are charged to the grant account in a timely manner.
4.7 Changing the Custodian of a Fund
4.7.1 When a change of a custodian or Delegate is required, an email should be sent to the Office of Student Accounting stating the name, j number, phone number, and title of the new custodian or delegate.
4.7.2 If the change is for a new custodian, at the time the responsibility is assumed, the new custodian should count the fund in the presence of the previous fund custodian or other appropriate department staff to insure the fund is intact. The count should be documented and signed-off on by each party present.
5. Procedures
Not Applicable
6. Enforcement
6.1 Petty cash funds are subject to audit by the Office of Internal Audit, State Examiner, and the Office of Student Accounting. The Office of Student Accounting will perform random petty cash counts on at least 3 petty cash funds during both the Fall and Spring semesters. Upon request, the Custodian of the fund will be required to produce the cash and signed petty cash vouchers with paid receipts attached. Cash and receipts must total the authorized amount of the petty cash fund.
6.2 An annual Petty Cash Fund Authorization Form will be sent to each department who has a petty cash fund. The form must be completed by the Custodian to verify the amount of the fund, the continued need for the fund, the name of the Custodian and other pertinent information. The Petty Cash Authorization form will be used by management to ensure agreement with the general ledger current balance.
7. Related Documents
7.1 Student Accounting Website - /departments/financialaffairs/studentaccounting/
7.2 Petty Cash Reimbursement Form - /departments/eforms/studentaccounting/pettycash.pdf
7.3 Petty Cash Closeout/Departmental Deposit Form - /departments/eforms/studentaccounting/departmdepositform.pdf