304.1 - University of North Carolina at Chapel Hill Procedure on Establishing, Maintaining and Closing a Petty Cash Fund Account

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 (see "Forms and Instructions" section below) 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

Related Data

None

Related Policies

  • Finance Policy 304 - University of North Carolina at Chapel Hill Policy on Petty Cash Funds

History

Revised:

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

Article ID: 131492
Created
Thu 4/8/21 9:10 PM
Modified
Mon 7/12/21 2:55 PM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
02/28/2018 12:00 AM
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Cash Manager
Last Review
Date on which the most recent document review was completed.
02/28/2018 12:00 AM
Last Revised
Date on which the most recent changes to this document were approved.
02/28/2018 12:00 AM
Origination
Date on which the original version of this document was first made official.
01/01/1999 12:00 AM
Responsible Unit
School, Department, or other organizational unit issuing this document.
F&O-Finance