Carleton College may permit a department to maintain a limited petty cash fund, typically as a change fund for handling sales at events. Departments maintaining petty cash are required to exercise specific controls over its use and safeguard the fund at all times.
Establishing a Petty Cash Account
Petty cash funds are established collaboratively by the Comptroller and the Department Chair. The total fund availability is typically from $50-$250.
Accountability for the petty cash fund should be assigned to a designated Department Petty Cash Custodian, who will be appointed by the Department Chair. The Department Chair cannot appoint himself/herself as Petty Cash Custodian.
Please notify the Business Office if there is a change in the Petty Cash Custodian. In order to ensure accountability for the new custodian, the fund should be returned and reconciled with the Business Office at the time of the change.
Security of Petty Cash Funds
It is the responsibility of the Petty Cash Custodian to safeguard the fund by limiting access and securing the fund, distributing the funds, obtaining supporting documentation for disbursements, maintaining receipts, balancing and reconciling the fund with the Business Office at least one per month.
The petty cash fund should be kept in a locked drawer or cabinet with the key in the custodian’s possession. Any losses of petty cash are the responsibility of the department.
Petty cash funds not in use during the summer should be deposited with the Business Office on or before June 30.
Restrictions on Use
Petty cash should NOT be used for the following:
- Any transaction over $25. These must be submitted to Accounts Payable.
- Travel expense reimbursements. Please submit to Account Payable.
- Credit/debit card reimbursements. Please submit to Accounts Payable.
- Payments to vendors for invoices submitted directly to the department. These must be approved and forwarded to Accounts Payable.
- Payments to independent contractors, consultants, awards, etc., and to non-Carleton employees. These must be processed through Accounts Payable in order to ensure appropriate IRS reporting.
- Payments to employees for services, awards, prizes, bonuses, etc. These must be processed through the Payroll process.
- Personal borrowing (IOUs) or salary advances.
- NEVER cash personal checks.
Reconciliation and Reimbursement of the Fund
The Petty Cash Custodian should properly document transactions in the following manner:
- Document each transaction on the Petty Cash Reconciliation. Identify all pertinent information (payee, purpose, transaction detail and date of expense). Identify the department and expense code to be charged.
- The individual receiving the payment must sign the Petty Cash Reconciliation to acknowledge the receipt of cash.
- Attach all original receipts to the Petty Cash Reconciliation. Reference each receipt to the corresponding transaction on the reconciliation. Detail receipts for all transactions should be obtained.
- The receipts, plus cash on hand, should equal the total amount of the fund at all times.
- The Petty Cash Custodian will be reimbursed by the Cashier in the Business Office for amounts paid out of the petty cash fund upon presentation of Petty Cash Reconciliation.
Reporting Stolen or Lost Petty Cash
In the event that petty cash is stolen, the following procedures should be followed:
- Inform Security of the theft at ext. 4444.
- Obtain a copy of the incident report and attach to the Petty Cash Reconciliation. Submit the reconciliation and report to the Business Office.
Closing a Petty Cash Account
The petty cash fund should be closed with the Business Office when the purpose for which the fund was established has been completed, as determined by either the Department Head or the Business Office. In addition, the Business Office reserves the right to conduct periodic usage reviews and, based on the results, can request closure or reduction of the fund.
Each reimbursement request will be subject to audit by the Business Office Cashier. In addition, the Business Office may perform periodic unannounced audits of the fund to ensure proper controls are maintained.