HomeMy WebLinkAboutPetty Cash - Jan 2016Page 1
Administrative
Policies and Procedures
Title: Financial Policies Resolution No.: Section: Petty Cash Policy Date of Version: Jan. 2016
SECTION I - POLICIES
A. Purchases must follow City purchasing policy and petty cash policy.
B. Each department must maintain its petty cash in a safe, a locked drawer, or
another place of physical safekeeping.
C. Each petty cash fund must have a designated signer and a designated
alternate, aka Petty Cash Custodian. All petty cash transactions must be
authorized by the Petty Cash Custodian.
D. The creation of a petty cash fund for each department will be authorized by
the City Controller.
E. Petty cash funds should not be used for ordinary and regular purchases.
F. Petty cash funds should be reconciled at least monthly or more frequently, if
needed.
G. The Finance Department may maintain a separate, single-signer checking
account in lieu of a petty cash fund.
H. Each department must conduct petty cash activities through the Finance
Department petty cash fund unless the department is approved for a
separate petty cash fund.
I. Petty cash transactions cannot exceed $50 per transaction for department
petty cash funds. Transactions greater than $50 can be requested from the
Finance Department petty cash fund but must be approved by the Finance Director.
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SECTION II - PROCEDURES
A. Create/Increase in petty cash:
1. Any department that wants to add a petty cash fund or increase its petty cash fund must complete and submit a Starting Change/Petty Cash Form
to the City Controller.
2. The form should indicate if it is an increase to a current petty cash fund or
if it is a new petty cash fund.
3. If it is an increase to a current petty cash fund, the form must identify the
fund by its identifying number.
4. The form of the cash should also be listed, such as quarters, one dollar bills, five dollar bills, etc. 5. The City Controller will either approve or deny the request and sign the form.
6. The City Controller will then give the form to the Assistant City Controller
to assign an identifying number, if necessary, and place it on the master
petty cash list.
7. A copy of the form will then be given to the Finance Department Petty
Cash Custodian to issue the payment for the starting petty cash fund.
8. The Finance Department Petty Cash Custodian will issue a petty cash check or petty cash funds to the department’s Petty Cash Custodian to start their petty cash fund.
9. The department Petty Cash Custodian should take the check, if
applicable, to Midwest One Bank for cashing; the funds should be placed
immediately into the department’s petty cash fund.
B. Decrease in petty cash:
1. Any department that wants to decrease or eliminate its petty cash fund
must complete a Starting Change/Petty Cash Form to return with the cash
balance.
2. The form should identify the petty cash fund by the identifying number and
indicate whether the fund is being reduced or eliminated.
3. The form, along with the cash balance, should be returned to a Cashier in the Revenue division at City Hall. 4. The cash balance will be receipted into the Munis cash receipts system. 5. A copy of the form and the receipt should be forwarded to the Assistant City Controller.
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C. Petty Cash Transactions:
1. Employees requesting payment via petty cash must submit a Petty Cash
Request Form to the Petty Cash Custodian.
2. The form must have all of the necessary information; including, employee
name, account codes, and purchase description.
3. The purchase receipt or other documentation must be attached to the
form.
4. Transactions by petty cash cannot exceed $50. Transactions greater than
$50 may be requested from the Finance Department petty cash fund, but
they must be approved by the Finance Director.
5. The form must be signed by both the employee withdrawing the funds and
the Petty Cash Custodian.
6. The form should be placed into the petty cash fund for reconciliation and
audit purposes.
D. Petty Cash Reconciliation/Replenish:
1. Each month (or more frequently, if needed), the department Petty Cash
Custodian should reconcile the petty cash fund on a Petty Cash
Reconciliation Form.
2. The remaining cash in the fund should be counted and totaled. The Petty
Cash Request Forms should also be totaled. The cash totals and the form totals added together should equal the starting balance of the petty
cash fund.
3. Any shortages or overages of cash must be noted in the reconciliation and
accounted for. Funds should not be taken from any other source to make
up for a shortage.
4. The reconciliation and forms should be reviewed and signed by the
division supervisor and then brought to the Finance Department for
replenishment by the Petty Cash Custodian. The Finance Department
reconciliation and forms should be forwarded to the Accounting Division to be replenished through Accounts Payable.
5. The Finance Department Petty Cash Custodian will issue a petty cash check or petty cash funds to the department’s Petty Cash Custodian to
restore their petty cash fund to its designated starting balance. The
Accounting Division will issue a check to the Finance Department Petty
Cash Custodian or an ACH transfer into the separate checking account in
lieu of a petty cash fund to restore its starting balance.
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6. The Petty Cash Custodian should take the check, if applicable, to Midwest
One Bank for cashing; the funds should be returned immediately to the
department’s petty cash fund.
E. Petty Cash Audit:
1. The Assistant City Controller will maintain a master list of all petty cash
funds.
2. Each individual petty cash fund will be given an identification number.
3. At least once per year, an individual from the Accounting Division will visit each department to verify the petty cash balances.