Petty Cash Procedures

Approving Authority:	Council
Establishment Date:	26 March 1997
Date Last Amendment:	11 November 2004
Nature of Amendment:
Date Last Reviewed:	November 2004
Publication Reference:
Contact Officer:	Supervisor, Accounts

8.6	Introduction Petty Cash Floats have been established in various locations throughout the University to allow payments to be made for minor expenses up to $50.00 (plus GST). The size of each Petty Cash Float should be sufficient to cover expenditure for a four week period but this is dependent on the level of security available.
	Principle Petty cash floats are intended for individual cash purchases of up to $50, in respect of bona fide university expenditure which has been duly authorised by an appropriate officer.
	8.6.1 Risks As Petty Cash Floats are cash and transactions are wholly made within a local area, there are risks above those in the usual Accounts Payable cycle. Key risks are: • funds may be stolen; • non University business transactions may be made. 8.6.2 Controls The main controls used to manage risks to Petty Cash Floats are: • Minimising imprest amounts • Adequate documentation • Adequate authorisation • Segregation of duties • Adequate security • Post hoc periodic review
	8.6.3 The procedures have been written around the following points - • Petty Cash Floats are intended for individual cash purchases up to $50.00 (plus GST), in respect to bona fide university expenditure, which has been duly authorised by an appropriate Supervisor. Alternate purchasing methods are purchasing cards and the Accounts Payable cycle. • At all times, the ‘cash on hand’ plus the dollar amount of expenses, supported by paid receipts, should equal the designated amount of the Petty Cash Float (the imprest amount recorded in the general ledger). • A ‘Petty Cash Advance’ up to $50.00 may be given to staff members who are required to purchase goods and at an unknown cost. A petty cash voucher must be completed as supporting documentation for the petty cash custodian with signed approval from the authorised Supervisor of the claimant or the relevant school or divisional Resource Officer. Refer to 8.6.7. • Purchases must not be split on different vouchers for the purpose of keeping the reimbursement below the $50.00 (plus GST) limit. Purchases over $50.00 (plus GST) must be reimbursed through the Central Accounts Office. • Employees are not authorised to approve their own Petty Cash reimbursements nor may Petty Cash transactions be authorised by a subordinate staff member or a colleague. Whenever practicable, the relevant authorised Supervisor of the claimant must give approval. Refer to 8.6.6. • The request to reimburse the Petty Cash Float will be checked and signed by an authorised Supervisor of the custodian, who will ensure that the total of expenditure and the ‘cash on hand’ are equal to the total of the Petty Cash Float. Refer to 8.6.12. • Petty Cash Floats must be appropriately secured in order to help reduce the risk of theft. • Remote areas, i.e. areas that are not part of the main University Campus, may be authorised to use cash withdrawals on the University Purchasing Card for Petty Cash for transactions up to $50.00 (plus GST) for legitimate University business purposes. Such transactions will be acquitted in accordance with the Purchasing Card Procedures. Refer to 8.6.5 and http://www.flinders.edu.au/ppmanual/financial/purchCard.html 6.3.2.4. • A periodic and annual review of Petty Cash transactions and Petty Cash Float balances will take place. Refer to 8.6.14.
	8.6.4 Request for a Petty Cash Float The Central Accounts Supervisor will keep a register of All University Petty Cash Floats, which should agree with the amount recorded in the main Petty Cash Control account in the General Ledger. An authorised Supervisor may request the establishment of a Petty Cash Float for their area by completing the form ‘New Petty Cash Float or an Increase in the Petty Cash Float’ (http://www.flinders.edu.au/finance/forms/home.html) to the Central Accounts Supervisor. The authorised supervisor must be satisfied that there is adequate security storage available for the Petty Cash Float. The main Petty Cash Control account will be charged and an ‘open for cash’ cheque will be drawn when the Petty Cash Float is established or increased. Areas receiving Petty Cash Floats will designate one employee as the main custodian of the float. The custodian will be responsible for the safekeeping and proper use of the float. A second relief custodian may be designated to cover periods of absence of the custodian by completing the form ‘Transfer of Petty Cash Float’ Refer to 8.6.13. (http://www.flinders.edu.au/finance/forms/home.html) 8.6.5 Petty Cash using the Purchasing Card – (Remote areas only) In order to facilitate University business at remote localities, an authorised Supervisor may request the establishment of a Petty Cash Float for his/her area by sending a completed Petty Cash Form http://www.flinders.edu.au/finance/forms/home.html to the Central Accounts Supervisor. The Petty Cash Form, when approved, will be forwarded to the Central Accounts Office for action. The custodian will be informed when the access to cash withdrawals on the purchasing card have been actioned. The initial Petty Cash withdrawal, using the Purchasing Card, will be the total amount of the Petty Cash Float and it will be expensed against the Main Petty Cash Control Account. Petty Cash Floats will be reconciled by the custodian, and the spreadsheet summary, vouchers and ‘cash on hand’ will be checked and signed by the authorised Supervisor of the custodian. The spreadsheet summary will become the supporting vouchers for the Purchasing Card reconciliation. The Petty Cash Float will be replenished by the custodian for the total amount of disbursements made which equals the amount on the spreadsheet. General Ledger account numbers will be reconciled in a summarised format on myPCard when the transaction appears on the cardholder’s statement. 8.6.6 Procedure for Petty Cash custodian For security purposes, Petty Cash Floats must be kept in lockable safes or cabinets. Offices in which Petty Cash Floats are housed may also have an appropriate alarm security system installed. Please contact Security for up to date information on the storage and security of Petty Cash Floats. Whenever practicable, Petty Cash vouchers will be approved and signed by an authorised Supervisor of the claimant. If a signature cannot practicably be obtained from the authorised Supervisor of the claimant: • The custodian will check that the Petty Cash vouchers are completed correctly, and supported by adequate documentation/receipts and be satisfied the expenditure is for University purposes. The custodian will sign the Petty Cash voucher before a reimbursement is given. • The authorised Supervisor of the custodian will be responsible for approval of the expenditure by signing the Petty Cash Spreadsheet Summary, under the section ‘Reconciliation Check’. The custodian will ensure that sufficient funds are maintained in the Petty Cash Float to enable the Float to be used effectively. The Petty Cash Float will be reconciled each time there is a claim for a float reimbursement (approximately every four weeks). This means that the ‘cash on hand’ together with the authorised payment vouchers should exactly equal the approved Petty Cash Float. Refer to 8.6.9. The custodian will complete the secion, ‘Petty Cash Float Reconciliation’, on the Petty Cash Spreadsheet summary. The authorised Supervisor of the custodian will sign the section, ‘Reconciliation Check’ on the Petty Cash Spreadsheet summary, as confirmation that the Petty Cash Float has been reconciled. Petty Cash Floats must be replenished at the end of the financial year (i.e. December), in practice, by no later than the last cheque run before the University closes down for the Christmas period. Upon request, cheques may be held for security in the Central Accounts Office until required in the New Year. A Petty Cash – ‘End of Year Confirmation for http://www.flinders.edu.au/finance/forms/home.html must be completed by the custodian and sent to the Central Accounts Supervisor at year end confirming the Petty Cash Float total, the name of the custodian and the name of the float.
	8.6.7 Petty Cash Advance A ‘Petty Cash Advance’ up to $50.00 may be given to staff members who are required to purchase goods on behalf of the University when the cost is unknown. A petty cash voucher must be completed as supporting documentation for the petty cash custodian with signed approval from the authorised Supervisor of the claimant or the relevant school or divisional Resource Officer. Within one working day, the claimant must acquit the advance with a replacement petty cash voucher and supporting documentation, signed and approved, to the custodian of the petty cash float and to reimburse any unused funds. Any Petty Cash Advance not acquitted will be automatically expensed against the relevant cost centre and any future requests for a Petty Cash Advance by the same staff member may be denied. 8.6.8 Petty Cash claims Any person may make a petty cash claim provided that the purchase is for University purposes and the reimbursement does not exceed $50.00 (plus GST) per transaction. Requests for a reimbursement in the form of a petty cash voucher are to include: • Date of purchase/transaction • Details of the expenditure • Amount of expenditure • Complete general ledger account number • Appropriate tax code – GST or Zero Tax • Signature of the claimant • Signature of the authorised Supervisor approving expenditure whenever practicable (the claimant must be independent of the authorised Supervisor), or the custodian • Original documentation showing evidence of the charge, indicating the vendor name, items purchased, total cost, date of transaction and tax code (if documentation includes GST). Payments can be made without receipts, but suitable evidence must be available and approved at the discretion of the authorised Supervisor of the claimant. Some types of transactions may incur a tax liability such as fringe benefits tax (FBT). Instances where petty cash is used for entertainment expenses e.g. catering, please contact the Taxation Accountant for appropriate direction. Refer (http://www.flinders.edu.au/finance/html/tax/index.htm) FBT check list or (http://www.flinders.edu.au/ppmanual/financial/fbt.html) The Petty Cash voucher and supporting documentation will be stamped ‘paid’ immediately funds are given to the requesting officer.
	8.6.9 Reimbursement of Petty Cash Float The Petty Cash Float will be reconciled each time there is a claim for a float reimbursement (approximately every four weeks). Spreadsheet templates will be completed in a ‘summarised format’ This will include general ledger account numbers, a brief description of purchases, the correct tax code, $ amount to be reimbursed and the ‘cash on hand’ amount. http://www.flinders.edu.au/finance/forms/home.html. The custodian will reconcile the Petty Cash Float and update the spreadsheet summary, including the section ‘Petty Cash Float Reconciliation’. The spreadsheet summary, vouchers and ‘cash on hand’ will be checked and reconciled, by the authorised Supervisor of the custodian, to exactly equal the Petty Cash Float. The authorised Supervisor of the custodian will sign the section on the spreadsheet summary, ‘Reconciliation Check’, to indicate that the Petty Cash fund balances. Minor discrepancies will be charged against the cost centre funds, approved by the authorised Supervisor of the custodian and added as an additional reimbursement on the spreadsheet summary. Refer to 8.6.12. The spreadsheet summary will be forwarded to the Central Accounts Office as an email attachment and the details will be uploaded into the finance system. A cheque will be drawn for the reimbursement of the Petty Cash Float on the next cheque run and made ‘open for cash’. School of Medicine Petty Cash reimbursement will be transferred as an EFT to Bank SA, FMC and the custodian will be notified when the transfer has been actioned. The custodian will be notified when the Petty Cash reimbursement cheques are ready to be picked up from the Central Accounts Office.
	8.6.10 Transmission of the cash reimbursements to the Custodians The original signed spreadsheet summary will be given to the Central Accounts Office to stamp when picking up the reimbursement cheque. The Central Accounts Office will not provide the cheque reimbursement unless satisfied that the spreadsheet has been appropriately authorised. The custodian, or nominee, will collect and sign for the reimbursement cheque and take it to the Bank to cash for the required cash denominations. A security escort will be arranged in advance if the reimbursement involves transporting cash above security thresholds or for lower amounts if requested. School of Medicine Petty Cash • The spreadsheet summary will be forwarded by email from the custodian to the authorised Supervisor who will check that the vouchers, supporting documentation and the ‘cash on hand’ exactly equals the Petty Cash Float. • An email will be forwarded, with the spreadsheet summary attached, to the Central Accounts Office from the authorised Supervisor as confirmation of the reconciliation and approval for the EFT transfer to the Bank SA, FMC. • The custodian, or nominee, will arrange a security escort service from the School of Medicine, Accounts Office to Bank SA, FMC, and back to their office location on any occasion when their reimbursements are above security thresholds.
	8.6.11 Procedures for a Security Escort Service New request for a Security Escort Service • A request for a security escort service should be made through the Transport Section. • Each request will be added to the security escort list, with the custodian’s name and extension number. • The custodian will be assigned a specific security escort code number, which will be used for future security escort requests. Security Escort Service from the Central Accounts Office • The Central Accounts Office staff will contact the custodian when the reimbursement cheque is available. • The custodian, or nominee, will pick up the cheque and sign the cashbook in the Central Accounts Office, room 009/016 in the Registry Building. • The custodian, or nominee, will arrange a security escort service to the bank from the mailroom for any ‘open for cash’ cheque above the security thresholds. • The security escort service will be available for staff with ‘open for cash’ cheques under the security thresholds whenever it is specifically requested. • The custodian, or nominee, will be escorted to the Bank and back to his/her office location. Security Escort Service from the School of Medicine, Accounts Office • The Central Accounts Office staff will contact the custodian when the reimbursement EFT has been transferred to Bank SA, FMC. • The custodian, or nominee, will arrange a security escort service from the School of Medicine, Accounts Office to Bank SA, FMC, and back to his/her office location on any occasion when their reimbursements are above security thresholds.
	8.6.12 Loss of Funds The local cost centre is accountable for all Petty Cash Floats held within their area. Money lost, due to circumstances beyond the control of the custodian, will be charged against the cost centre funds. Minor discrepancies will be charged against the cost centre funds, approved by an authorised Supervisor of the custodian and added as an additional reimbursement on the spreadsheet to the Central Accounts Office. Where a loss of funds occurs from the Petty Cash Float, due to theft or a discrepancy above $50.00, a written memorandum must be supplied to the Director, Financial Services, containing the following: • Details of the event i.e. how the loss occurred • Petty Cash Float total to be adjusted, transferred or closed • Security controls in place to ensure low risk of future losses • A general ledger account number for the reimbursement of the lost funds The Director, Financial Services, will determine what action is necessary after considering the memorandum. This may include changes to security, removal of the Petty Cash Float or a change of custodian.
	8.6.13 Transfer/Closure of Petty Cash Float The following steps must be taken when an existing Petty Cash Float is being transferred to another area: • Complete the ‘Transfer of Petty Cash’ Form http://www.flinders.edu.au/finance/forms/home.html • Previous custodian and new custodian must check on handover that the ‘cash on hand’ and the relevant vouchers equal exactly the Petty Cash Float and both parties sign the ‘Transfer of Petty Cash Float’ Form http://www.flinders.edu.au/finance/forms/home.html • Appropriate measures are undertaken for security of the Petty Cash Float The following steps must be taken when a Petty Cash Float is closed: • The Petty Cash Float will be reconciled and the spreadsheet summary sent to Central Accounts Office with notification of reimbursement transferred to the Main Petty Cash Control account. • The remaining ‘cash on hand’ will be deposited with the Flinders University Cashiers Office and receipted against the Main Petty Cash Control account. • The spreadsheet summary and the ‘cash on hand’ must exactly equal the Petty Cash Float • Notification must be sent to the Central Accounts Supervisor of the closure of the existing Petty Cash Float.
	8.6.14 Annual Reviews Arrangements will be made for annual random reviews of a sample of Petty Cash Floats. ‘Petty Cash Float Audit Record’ Form http://www.flinders.edu.au/finance/forms/home.html The reviews will encompass whether: • The ‘cash on hand’ plus vouchers exactly equals the approved Petty Cash total; • Receipts or other appropriate evidence are attached to vouchers; • Expenses are only for bona fide University purposes; • Receipts or other evidence are stamped “paid” (to prevent reuse); • Paid vouchers have been appropriately authorised and signed by the recipient of the funds; • Amounts paid do not exceed $50.00 (plus GST); • Transactions have not artificially been split so as to fall below the $50.00 limit (plus GST); • Receipts meet GST input tax claiming requirements where appropriate; • The Petty Cash Float is stored in an appropriately secure manner. Where a review uncovers significant weaknesses the Director Financial Services is authorised to remove the Petty Cash Float holder’s authority to operate the Petty Cash Float.