Petty Cash Policy

I. Scope

This policy applies to all eligible employees of William & Mary, including the Virginia Institute of Marine Science (hereafter referred to as “the University”).

II. Purpose

This policy establishes the proper uses and administration of petty cash funds. When other disbursement methods cannot be used, petty cash funds can provide cash to local units to cover minor expenses.

III. Definitions

Change Fund – Type of Petty Cash where an amount of cash is held by a department or office and used to give change to customers when they are paying for goods or services. No purchases can be made from these funds.

Custodian – The financial unit requesting a petty cash or change fund must appoint a custodian who is responsible for safeguarding and maintaining the petty cash fund. Maintaining the fund consists of disbursing funds, obtaining receipts, reconciling, and replenishing the fund. When the petty cash or change fund is no longer necessary, the Custodian is responsible for ensuring that it is reconciled and closed.

Petty Cash – A petty cash fund is cash loaned for the purpose of making change or small purchases where it is not sensible to make a disbursement by check and purchases are impractical or unavailable through Procurement and Disbursements (p-card or Concur expense reimbursement).

  • Petty Cash Balance Sheet– A form that is used to aid in accounting for all Petty Cash funds.
  • Petty Cash Request Change Form – This form is used by the Lead Cashier to record any changes associated with a department’s Petty Cash account. 
  •  Quarterly Petty Cash Balance StatementsEvery 3 months this is sent to each department that has Petty Cash funds.  It requires the administrator to audit and acknowledge that everything is accounted for.

Administrator – Assumes responsibility for establishing the fund and reviewing petty cash activity to ensure appropriate use.

IV. Policy
 

A. Establishing a Petty Cash Procedure

When you are requesting a Petty Cash account, the Administrator must first contact the Lead Cashier in the Cashier’s Office to discuss needs, amount requested and the account that funds will be drawn from. 

 Petty Cash is generally requested and used for two purposes: 

(1) small purchases of approved miscellaneous expenditures,

(2) cash drawer change fund activity. 

A Petty Cash Request Change Form is required to establish petty cash for each type of account.  A fund custodian and responsible administrator must be identified at that time.  A new form must be completed to establish each type of account and can be obtained from the Lead Cashier. 

B. Securing the Petty Cash

Petty cash must be held in a locked cash drawer, a locking cash box or safe. The primary key to the locked storage should be held by the fund custodian.  A secondary key to the box should be retained by the administrator.  The fund custodian and the administrator can be held jointly liable for uninsured losses that occur as a result of failure to follow these procedures.

C. Petty Cash Reconciliations

Petty cash funds should be counted on a daily basis.  The fund for small purchases should be balanced at the time of the transaction, or at a minimum, twice monthly.  When balancing any petty cash funds and you discover an overage or shortage, the difference should be identified on the Petty Cash Balance Sheet. Departments should exercise due diligence by reviewing the transactions to try to resolve any discrepancies.  Discrepancies of $20 or more should be directed immediately to the Lead Cashier.

D. Overages/Shortages

If you find an overage, complete a deposit transmittal and credit funds to the designated index-over/short account.  Attach the Petty Cash Balance Sheet, add explanation and take to the Cashier’s Office for depositing.  If you find a shortage, attach the Petty Cash Balance Sheet with explanation to the Vendor Payment Request Form (VPRF) to replenish the fund.  You will charge the departmental index-over/short account

E. Theft or Departure

In the event of a theft of the petty cash funds, the custodian should immediately notify the Campus Police Department; then notify the Lead Cashier and Internal Audit.  Before the departure or change of the fund custodian or administrator assigned to a petty cash fund, the keys to the secure cash box must be returned to the appropriate departmental authority and Lead Cashier must be immediately notified.

F. Petty Cash Audit

All petty cash funds are subject to random, unannounced audits by the Lead Cashier, Internal Audit or State Auditors. Administrators will receive Quarterly Petty Cash Balance Statements from the Lead Cashier. The completed form must be returned to the Cashier’s Office in a timely fashion and a copy retained for your records at the department level.

G. Closing a Petty Cash

Notification should be made to the Lead Cashier for a Petty Cash Request Change Form.  Final reimbursement requests should be processed and received from Accounts Payable.  Once the checks have been received; the check along with any remaining cash on hand should be brought to the Cashier’s Office and receipted by the Cashier’s into the Banner fund.

V. Approval and Amendment

This policy was created by Offices of Financial Operations and is effective January 1, 2020, and may be amended or terminated by the Senior Vice President of Finance and Administration.

Questions about the implementation of this policy or its interpretation should be directed to the Vice President for Finance and Technology.