-
Essex Westford School District
Procedure: Fiscal Management / Attachment B: Petty Cash
Related: See also Fiscal Management Procedure (File Code F)Date: 3/28/2019
Introduction:
A petty cash fund may be established in a department when there is evidence that a continuing cash advance should be kept on hand to permit the purchase of low-value supplies and services that cannot be purchased under purchase requisition procedures. These purchases may include individual purchases of supplies and materials under the amount of Fifty Dollars ($50), postage, delivery charges, and freight. Individual personal reimbursements which exceed Fifty Dollars ($50) should not be made from petty cash funds. Petty cash accounts will be maintained as cash on hand.
Establishment of Petty Cash Funds:
The Director of Finance & Accounting designates the fund manager responsible for authorizing the establishment of petty cash funds and the specified amount of each fund. The amount of the petty cash fund shall normally not exceed $250. Where there is a need for a fund that is greater than $250, a written request giving the reason must be submitted to the Director of Finance & Accounting for approval. Maintaining a minimal fund reduces security risk.
Operating Procedures:
When a petty cash fund has been authorized for a department, the following operating procedures must be followed:
- Designation of Custodian: A custodian of the fund, who is directly responsible for safekeeping and disbursement of the cash, must be appointed by the fund manager. The original check written to establish the fund, and checks written to replenish it, are made payable to the department petty cash account. Written instructions detailing the process that must be followed in using petty cash funds should be provided to the custodian by the fund manager.
- Petty Cash Disbursements: Expenses paid from a petty cash fund can only be made for the purpose(s) for which the fund was authorized and must be supported by receipts, which should contain the following information:
- Date of purchase or payment;
- Name of vendor or other payee;
- Positive evidence that a payment was made (i.e., a cash register receipt or a handwritten receipt on which the word "Paid" appears);
- Amount paid;
- Description of the services provided, or the goods purchased (entered by the vendor if a handwritten receipt is obtained, or by the purchaser if a cash register tape is issued);
and - Signature indicating receipt of purchases or services.
- Reimbursement of Funds: Reimbursements made to a fund custodian for petty cash expenditures are based on a Purchase Order which must be supported by purchase receipts. Such requests must be approved for payment by someone with signature authority who is neither the petty cash fund custodian nor an employee who reports to the fund custodian. Reimbursement should be requested as needed, but the fund should always be reimbursed by the end of the fiscal year.
- Physical Security: When not in use, the fund’s currency must be placed in a safe or a locked receptacle which is kept in a properly secured area. In the event of a theft, the loss must be reported to the Security Department.
- Change in Custodian of Funds: When custody of a petty cash fund is transferred to another custodian, a Petty Cash Change of Custodian Form must be completed at the department level and sent to the Central Office Finance Department. The purpose of this form is to document that the fund manager has approved the change of custodian, that the total of the cash and the receipts equal the specified amount of the fund, and that the new custodian is aware of his or her specific responsibilities related to custody of the fund.
Responsibilities:
The security of, and accounting for, petty cash accounts shall be the responsibility of the fund manager to whom the account is assigned. The Finance Department is responsible for reviewing receipt documents provided in support of requests for reimbursement of petty cash expenditures and for reimbursing the fund custodian.
