Purpose
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.
Policy Statement
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 individuals name. Therefore access to the fund must be limited to the custodian. The funds must be secured at all times in a locked drawer or safe.
Restrictions on use of petty cash funds
University's accounts payable and purchasing policies and procedures should be adhered to by university departments and petty cash funds should not be sought as an alternative to circumvent these laws. Specifically, petty cash funds are contraindicated by:
- Purchased goods currently covered by University negotiated contracts
- 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:
- The payroll system, or
- 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 must not be commingled with petty cash funds.
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.
Annual Confirmation
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.
Frequency of Reimbursement
The petty cash fund must 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 must be closed. The petty cash custodian must complete the closing procedure, and the responsible person must notify and request the University Controller to close the petty cash fund and deposit the funds throug the Cashier's Office into a university owned bank account.
Exclusions
None
Special Situations
None
Procedures
Additional Information
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.
Related Data
- Finance Policy 306 - University of North Carolina at Chapel Hill Policy on Imprest Checking (Bank) Accounts
Contacts
Policy Contacts
| Subject |
Contact |
Telephone |
Fax |
E-Mail |
| Petty Cash Accounts |
Cash Management |
919-962-0036 |
919-962-3306 |
cash_management@unc.edu |
| Petty Cash Reimbursements |
Disbursement Services |
919-962-0748 |
919-962-0748 |
pettycash@unc.edu |
History
Revised:
- November 11, 2014: Added FAQ on paying study subjects.
- March 29, 2010
- March 27, 2023