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Loyola University Chicago

Financial Services

Policy for Petty Cash Funds

TABLE OF CONTENTS


TO WHOM THIS POLICY APPLIES

A petty cash fund may be established for those University Departments where it is necessary to maintain a small amount of ready cash on hand. This includes departments that keep cash on hand to use in making change for customers.  Departments will be responsible for the security and control of their petty cash funds. The petty cash fund should be kept secure at all times in a locked box and in a locked area (such as a locked drawer or safe that is secured to the floor).  Personal use or loans of this cash is not permitted and all disbursements must have adequate receipts and detail for verification.

TO ESTABLISH OR INCREASE A FUND

To establish or increase a petty cash fund, a request must be made to the Controller of General Accounting. The request should include the amount requested, the department making the request, the name of the custodian of the fund, and the purpose for the cash fund. The request should be approved by the department’s manager before it is sent to the Controller of General Accounting.

The Controller of General Accounting and the Director of Cash Management will review all requests and, if approved, will forward the signed request to the proper Staff Accountant in the General Accounting department to assist in setting up the petty cash fund.

Once the request has been approved, the department will need to fill out a Check Requisition using its appropriate accounting unit and account 1190.  The report will be sent to the Accounts Payable department along with documentation noting the approval of the fund.  A check will be issued by Accounts Payable to the custodian of the fund.

CUSTODIAN OF THE DEPARTMENTS CASH FUND

It is the responsibility of the department head to appoint a custodian of the department’s petty cash fund.  The custodian must ensure that the funds are located in a locked box in a locked desk drawer or safe. The custodian is also responsible for the keys to both the box and the secured area. Keys should not be kept where others have access to them. It is also the responsibility of the custodian to distribute the petty cash funds according to policy.

DOCUMENTATION OF THE CASH FUND

All expenditures must be accounted for with original receipts. Only receipts with a business emblem or stamp will be reimbursed (notes and adding machine tapes are not acceptable). Each receipt should be attached to a Petty Cash Reimbursement Report that identifies all pertinent information (date of the expense, items purchased, purpose for the purchase, the accounting unit and account number that purchased items should be charged, etc.)

RECONCILIATION AND REIMBURSEMENT OF THE PETTY CASH FUND

The petty cash fund of each department will be reconciled at least once per year by a Staff Accountant from the General Accounting Department.  It is the responsibility of the custodian of each cash fund to make sure that the Petty Cash Reimbursement Report and the cash in the cash fund add up to the correct amount of that fund.  If the petty cash fund needs to be reimbursed, the custodian will submit a request to Accounts Payable.  Petty cash funds require a Petty Cash Reimbursement Report and supporting receipts in order to be reimbursed. Accounts Payable will process the request and send a check back to the department to replenish the fund.

OVER/SHORT

If the petty cash fund is found to be over or short, this amount will be credited or debited to the department’s expense account when the fund is replenished or deposited. If a theft occurs, the Controller of General Accounting and Campus Police should be notified immediately, and appropriate action will be taken. 

CLOSING THE PETTY CASH ACCOUNT

The petty cash fund should be closed with the General Accounting Department when the purpose for which the fund was established has been completed. In addition, the General Accounting Department reserves the right to conduct periodic usage reviews and, based on the results, can request a closure or reduction of the fund. When closing a petty cash fund account, the General Accounting Department will collect the remaining funds and Petty Cash Reimbursement Report , reconcile the account, and deposit the cash into the proper account.

PETTY CASH RESTRICTIONS

Petty cash may NOT be used for:

QUESTIONS

Any questions or concerns regarding this policy may be directed to the General Accounting Department by calling 312-915-8716.

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