Overview: Establishing a Department Petty Cash Fund
Petty cash funds enable departments to reimburse employees for minor, unanticipated business expenditures of up to $100.00. A department head initiates the request for a petty cash fund and identifies an individual who will act as petty cash custodian. The petty cash custodian takes responsibility for administering the fund, including: reimbursing employees with petty cash; reconciling the petty cash fund; and replenishing petty cash. The petty cash custodian or the department head can also make changes to the fund, including: reporting a petty cash theft; changing the custodian; and closing the fund.
On this page:
- Designating a Petty Cash Custodian
- Types of Petty Cash Funds and Overall Limits
- Requesting a Department Petty Cash Fund or Petty Cash Checking Account
- Setting Up a New Petty Cash Fund
- Setting Up a New Petty Cash Checking Account
Designating a Petty Cash Custodian
The department head designates an employee to be the petty cash custodian. The designated employee must become certified as a petty cash custodian. The custodian's duties and responsibilities will include:
- Verifying that reimbursement requests are consistent with policy
- Ensuring the proper signatures for authorization
- Disbursing reimbursements
- Reconciling the petty cash fund
- Replenishing the petty cash fund
- Maintaining and protecting the petty cash fund
For additional details, see Overview: Administering a Petty Cash Fund.
Both the department head and the designated petty cash custodian should understand petty cash policy.
Types of Petty Cash Funds and Overall Limits
The University has two types of petty cash funds:
- Petty Cash Fund: Petty cash funds are established for departmental use and emergency small-dollar purchases where the use of alternative means (e.g. PCard) is not feasible. The size of a petty cash fund will be determined by the business needs of the requesting department and, unless special written approval is obtained from the Treasurer, a single fund will be limited to no more than $500 in cash on hand.
- Petty Cash Checking Account: Petty cash checking accounts may be established in departments that make small disbursements by mail (e.g. purchase of subscriptions, refunds, etc.), or must make immediate payment (e.g. C.O.D. payment for goods delivered by UPS). The size of a petty cash checking account will be determined by the business needs of the requesting department and, unless special written approval is obtained from the Treasurer, a single checking account will be limited to no more than $2,500.
Requesting a Department Petty Cash Fund or Petty Cash Checking Account
Department heads can send a request for a new petty cash fund or petty cash checking account to Financial Support Center (3-2772).
The request should include the following:
- Department head's name, title, department name, and physical address;
- The type of fund requested (petty cash fund or petty cash checking account);
- The reason the fund is needed and the types of transactions the fund will be used for;
- Reason(s) that alternative payment methods are not feasible;
- Dollar amount requested;
- Name and contact information for the designated petty cash custodian;
- Name(s) and contact information of the individuals authorized to approve petty cash reimbursements (person(s) who will have authority to sign Received of Petty Cash Forms when an employee is reimbursed) and to approve petty cash transactions initiated in Expense Requests;
- If requesting a petty cash checking account, the name of the individual(s) that will have signature authority on the account (should not be the petty cash custodian);
- The department PTA that will be used when replenishing the fund.
Setting Up a New Petty Cash Fund
After the fund has been approved and set up, and verifying that the custodian has been certified, Cash Management will issue a check for the initial petty cash funds to the designated custodian.
The petty cash custodian will then cash the check, secure the funds, and prepare the system for logging and retaining records and receipts. See How To: Set Up New Petty Cash Fund.
Setting Up a New Petty Cash Checking Account
After the fund has been approved and verifying that the custodian has been certified, the Office of the Treasurer will work with the department head, or their designee, to open the checking account at Wells Fargo Bank. See How To: Set Up New Petty Cash Checking Account.