Petty Cash Policies and Procedures January 2018, Exams of Business Economics

Download Petty Cash Policies and Procedures January 2018 and more Exams Business Economics in PDF only on Docsity! Petty Cash Policies and Procedures January 2018 1 | P a g e Table of Contents 1. POLICY ................................................................................................................................................... 2 2. SCOPE .................................................................................................................................................... 2 3. DEFINITIONS .......................................................................................................................................... 2 4. GUIDELINES ........................................................................................................................................... 3 4.1. Establishing a Petty Cash Fund ..................................................................................................... 3 4.2. Designating a Petty Cash Fund Custodian..................................................................................... 4 4.3. Safeguarding the Cash .................................................................................................................. 4 4.4. Disbursement from Petty Cash ..................................................................................................... 5 4.4.1. Allowable Transactions ......................................................................................................... 5 4.4.2. Unallowable Transactions ..................................................................................................... 6 4.5. Replenishing the Petty Cash fund ................................................................................................. 7 4.6. Recordkeeping .............................................................................................................................. 7 4.7. Closing the Petty Cash Fund .......................................................................................................... 8 4.7.1. Closing the Fund - Voluntarily ............................................................................................... 8 4.7.2. Closing the Fund – Involuntary ............................................................................................. 8 4.7.3. Inactive Funds ....................................................................................................................... 8 5. INTERNAL CONTROLS ............................................................................................................................ 8 6. RESPONSIBILITIES .................................................................................................................................. 8 7. EXCEPTIONS AND AMENDEMENTS ....................................................................................................... 9 8. EFFECTIVE DATE .................................................................................................................................... 9 9. RELATED INFORMATION ....................................................................................................................... 9 10. EXHIBITS ............................................................................................................................................. 10 4 | P a g e 4.2. Designating a Petty Cash Fund Custodian Each department will designate a Fund Custodian in its initial request. The Fund Custodian must be an employee of the entity for which the petty cash is established, and must acknowledge his or her responsibilities by signing the Fund Custodian attestation portion of the Request form (EXHIBIT A). In the event the Fund Custodian has a scheduled absence, the department head may assign a temporary Fund Custodian. The funds must be counted in the presence of the authorized Fund Custodian before the leave period begins and again once the Fund Custodian returns (EXHIBIT B). In the event the Fund Custodian has an unscheduled absence of less than five business days, the department head may also assign a temporary Fund Custodian. The funds must be counted in the presence of the department head or his designee before the funds are used. A similar cash count must be performed upon the return of the regular Fund Custodian. The department shall maintain the cash count verifications until the next cash count is performed. To assign a temporary Fund Custodian, where the expected absence is more than five business days, the department head shall fill out the Petty Cash Fund Temporary Custodian Form (EXHIBIT B). In the event of a permanent change in Fund Custodian, the Petty Cash Fund account shall be reconciled and closed. After appropriate review by Accounts Payable, all remaining funds and sub-vouchers totaling the original amount of the petty cash box shall be submitted to the appropriate Business Office and a new box may be opened in its place, if needed. The process described above in “Establishing a Petty Cash Fund’ shall be followed if it is determined that a new Petty Cash Fund is necessary. 4.3. Safeguarding the Cash The Fund Custodian is responsible for safeguarding Petty Cash Funds under his/her control. Petty Cash Funds must be secured at all times and kept in a locked box in a limited access locked drawer, safe or file cabinet. Funds must be secured each time the Fund Custodian leaves the office. The keys to the box, file cabinet, or drawer shall be kept in the possession of the Fund Custodian, and not left in desks or in the office overnight. The Petty Cash fund is subject to audit at any time without prior notice by the Office of Internal Audit. The Petty Cash Fund and receipts must not be co-mingled with other cash. To discourage thefts, the Fund Custodian shall avoid dispensing money from the petty cash box in an area that is open to the public. The Fund Custodian and department head may be subject to discipline or held jointly liable for losses that occur as a result of negligence. In the event Petty Cash Funds are missing and theft is suspected, the Petty Cash Fund Custodian shall notify his/her immediate superior as well as the campus Public Safety Office, the University’s Public Safety Office, the University’s Office of Internal Audit and the Office of General Counsel. The University Public Safety shall immediately report the suspected theft to the local precinct and the General Counsel shall communicate with and serve as liaison with the New York State Inspector General’s office and other appropriate law enforcement agencies. 5 | P a g e 4.4. Disbursement from Petty Cash The Fund Custodian is responsible for ensuring that all disbursements from the Petty Cash Fund are in accordance with CUNY policy. Disbursements from the Petty Cash Fund must be properly documented and be for a valid University business purpose, as set forth below. The Fund Custodian must approve each disbursement. A Petty Cash sub-voucher (EXHIBIT E) shall be used to document each cash disbursement. Every Petty Cash sub-voucher shall be signed by the recipient, his or her supervisor, be supported with original receipts and approved by the Fund Custodian. To track the disbursements, sub-vouchers shall be sequentially numbered, and the counter shall be reset at the beginning of each Fiscal Year; number nomenclature should be four-digit year and four digits (e.g., 2017-0001). Under no circumstance may an individual, including the Fund Custodian, approve his or her own Petty Cash sub-voucher. Under no circumstance shall the Fund Custodian draw from petty cash as reimbursement for his or her own expense. It is the responsibility of the Custodian to ensure that each sub-voucher is complete, accurate, legible and accompanied by original documentation. Altered receipts shall not be accepted under any circumstance. All receipts must be itemized; credit card use receipts shall not be accepted for reimbursement. Should a receipt be missing or illegible, the recipient shall submit the “Missing/Illegible Receipt Memo”. (See EXHIBITS G and H). Prior to reimbursement, the Fund Custodian shall ensure that the following information and attachments are included with the reimbursement request: 1. Original of the vendor's customary receipt which includes: o Vendor name o Date of purchase o Items purchased (to be completed by department if not on receipt) o Price per item o Total price for the quantity received 2. Custodian may require purchaser to sign or initial original receipts if receipts are not clear 3. Signature of the supervisor on the sub-voucher Upon receipt of completed information, the Fund Custodian will reimburse the petty cash expenditure. It is strongly recommended that the reimbursement requests be submitted within ten (10) business days following a purchase. 4.4.1. Allowable Transactions The transactions that are allowable using petty cash funds include purchases for small dollar needs and purchases for which the goods have been received. Examples include: 6 | P a g e • MetroCards for local office travel (usage should be documented); • Copy services; • Taxis/local parking (must be justified, refer to CUNY Travel Guidelines); • Stamps; • Supplies if not on hand but immediately required (this should not be a frequent occurrence); and • Small infrequent purchases (such as copy of office key, etc.). 4.4.2. Unallowable Transactions Items that are required to be purchased through the college or university Purchasing Office may not be purchased with petty cash funds. Additionally, out of town travel expenses and meals must be reported through the travel reimbursement process. Further, the following transactions and purchases shall not be reimbursed from petty cash funds: • Items covered by State, City or University contracts (except as noted above); • Payments to vendors for invoices submitted directly to the department where a purchase order was issued; • Out of town travel (meals, lodging, transportation) and conference fees; • Services, including payments to employees, consultants and independent contractors; • Scholarships, stipends, and awards; • Inventorial equipment or sensitive items (as per the property management manual); • Payments to service centers (e.g., bookstore, etc.); • Cashing personal checks or providing personal loans (IOUs); • Tips /gratuities (excluding reasonable tips on taxi expense); • Food, beverages, catering (for more information related to purchasing food, please refer to the University’s policy on Lodging and Meal Allowances); • Gas for Automobiles (personal vehicles, or office vehicles); • Memberships and subscriptions; and • New York City and New York State Sales Tax (see below). Tax Levy Petty cash funds may not be used to purchase any items that are prohibited pursuant to University, State or City policies, such as parking violations, fines and penalties, etc. Refer to the ‘All Fund Matrix’ approved by the University’s Board of Trustees in December 2017 for a list of allowable purchases from tax levy and other funds. Generally, CUNY does not reimburse the payment of New York City and New York State sales tax. Since it may not always be practicable to provide the sales tax exemption certificate for minor purchases or when traveling locally, it is permissible to incur and reimburse sales taxes for expenditures under $25.00 in these or other exigent situations. Nevertheless, CUNY employees should make every effort to avoid the payment of sales taxes on any in-State purchase for University business, regardless of size. 9 | P a g e replenishment; • The college Business Office or the University Treasurer’s Office, as applicable, is responsible for establishing the Petty Cash Fund; • The college Business Office or University Treasurer’s Office, as applicable, is responsible for replenishing departmental Petty Cash Funds as requested. 7. EXCEPTIONS AND AMENDEMENTS Any deviation or alternative procedures to this policy shall be documented in writing, approved by both the Vice President of Finance at the college and the University’ Deputy Chief Financial Officer, maintained in the files and revisited on an annual basis. The University Office of Budget and Finance is responsible for the periodic review of this policy as well as ensuring that all appropriate parties are informed of them. 8. EFFECTIVE DATE This policy is effective January 1, 2018. 9. RELATED INFORMATION The following links and/or references provide additional information related to this policy: Tax Exempt Forms NYS Guide to Financial Operations/ Petty Cash NYC Directive 6 CUNY Informal Purchasing Policy 10 | P a g e 10. EXHIBITS EXHIBIT A REQUEST TO OPEN PETTY CASH FUND EXHIBIT B PETTY CASH CHANGE of CUSTODIAN FORM EXHIBIT C PETTY CASH RECAPITULATION FORM EXHIBIT D PETTY CASH RECONCILIATION FORM EXHIBIT E PETTY CASH SUB-VOUCHER EXHIBIT F MISSING/ILLEGIBLE RECEIPT (TAXI) MEMO TEMPLATE EXHIBIT G MISSING/ILLEGIBLE RECEIPT (GENERAL) MEMO TEMPLATE