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, the department will prepare a campus voucher for the approved amount, using the PETTY CASH supplier ID and departmental location in ConnectCarolina. Disbursement Services will issue the check to the petty cash custodian, who will then obtain the cash from the bank and oversee petty cash funds being sure to 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.
- Submit a campus voucher to Disbursement Services with receipts for replenishment of the petty cash account. Disbursement Services will review, approve account charges, and issue a check to the petty cash custodian. The general ledger account to be used in the voucher should use the general ledger account of how funds were spent.
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, the department will prepare a campus voucher for the approved amount, using the PETTY CASH supplier ID and departmental location in ConnectCarolina.
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.
- Notify Cash Management in Accounting Services of the department's intention to decrease the petty cash fund.
- Obtain the chartfield string information for posting the deposit from Accounting Services' Cash Management Team.
- Create a campus deposit and print a cash transmittal report to take to the University Cashier's Office.
- Deposit the excess cash with the University Cashier and provide them a copy of the deposit transmittal report.
Closing a petty cash fund
- Reconcile and replenish petty cash fund.
- The petty cash custodian should create a deposit in ConnectCarolina for an amount equal to the initial established amount.
- Notify Cash Management in Accounting Services of the department's intention to close the petty cash fund.
- Obtain the chartfield string information for posting the deposit from Accounting Services' Cash Management Team.
- Provide appropriate chartfield string for posting the deposit.
- Create a campus deposit and print a cash transmittal report to take to the University Cashier's Office.
- Deposit the excess cash with the University Cashier and provide them a copy of the deposit transmittal report.
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:
- March 27, 2023
- September 17, 2015: Updated references to ConnectCarolina functions.
- March 29, 2010