Petty Cash Funds

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Petty Cash Funds

• Presented by ABS
• Accounting Business Support

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What is a petty cash fund?

• Authorized by state law 24-30-202(20.1) C.R.S.
• A fund established at a state agency or
  institution of higher education to allow cash
  payment for small, incidental expenses. State of
  Colorado Fiscal Rule 6-2
• An amount of money issued to a department used on
  a revolving basis to pay for expenses of a
  nominal amount when other procurement methods are
  not practicable or when cash is required.

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What is cash?

• In other contexts, cash can include many things
  including checks, credit card receipts, gift
  cards, etc. But for petty cash funds, cash
  means
• Currency
• Coin

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How is petty cash used at CU?

• Preferably it isnt used
• The Procurement Card is the preferred method for
  making small dollar purchases
• Petty cash should be used on an exceptional basis
  when other procurement methods are not feasible
• Use it as a last resort to pay for university
  expenses

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How is petty cash used at CU?

• Petty cash fund set up in department by request
• Incidental expenses of a nominal amount not
  payable by other means (PV, Procurement Card)
• Human subject payments
• Only allowable expenses, i.e. must meet Propriety
  of Expenses APS, Sensitive Expenses Tests of
  Propriety PPS, etc.

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How is petty cash not used at CU?

• Alcoholic beverages
• Payroll expenses
• Payments to other university departments
• Travel expenses for employees
• Cashing personal checks
• Making loans to employees, students (no IOUs)
• Flowers, coffee or other consumables
• Official Functions
• Items for resale (e.g. stamps to personnel)
• Services (other than study subject payments)
• Honoraria payments
• Reimbursements to employees
• Student awards
• To open outside bank accounts

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Why all the fuss?

• Because its cash!
• Prone to more risk and abuse
• Least desirable form of payment
• Less secure
• Earns no interest
• Demands extra precautions, processing,
  monitoring, and documentation

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Dollar limits

• Maximum amount authorized for petty cash funds is
  2,500
• Limit is set by Colorado Revised Statute
  24-30-202(20.1)
• On the Boulder campus, petty cash funds are
  generally limited to 500 or less
• Determined by business needs

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Setting up a Petty Cash Fund
Petty Cash Set-Up Basics
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Do you need one?
Petty Cash Set-Up Basics

• Decide that you really need one
• Other procurement options wont work?
• Have the staff to manage it?
• Are you absolutely, positively certain?
• Have we beat this one up enough?

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Secure Location
Petty Cash Set-Up Basics

• Locked securely while not in use
• Locked drawer or cabinet in a
• Locked office
• Door closed locked when vacant
• Access restricted only to fund custodian
• Safety of personnel is paramount concern
• In case of loss or theft, notify Boulder campus
  Police and ABS

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Custodian
Petty Cash Set-Up Basics

• A custodian is the university employee directly
  responsible for the fund
• Must hold a 50 appointment or greater
• Accepts personal liability for loss of funds if
  due to negligence
• Maintain separation of duties
• Boulders HR Background Check policy states that
  a Criminal History and Financial History check is
  required for positions that handle cash

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Paperwork
Petty Cash Set-Up Basics

• Petty Cash/Change Fund Request Form (PCCF)
• Used to set up or modify petty cash fund
• Identifies amount, purpose, custodian, FOPPS,
  contact info, etc.
• Signed by custodian and org fiscal principal
• Fill out applicable fields, print, sign, send to
  ABS
• https//www.cu.edu/psc/forms/
• ABS signs and forwards to PSC

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Paperwork
Petty Cash Set-Up Basics

• Payment Voucher
• Used to get cash to establish fund or to increase
  authorized amount
• Put custodian name in Payee field followed by
  Petty Cash Custodian
• Send PV along with PCCF to ABS
• ABS reviews and sends PV to PSC
• PSC sends check to custodian who can cash at
  Cashiers window (with picture ID)

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Balance Sheet Impact

• A petty cash fund creates a balance in account
  code 000200 on your Balance Sheet equal to the
  authorized amount

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Compare Personal Cash Cycle
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Overview CU Petty Cash Cycle
Petty Cash Cycle
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Purchase
Petty Cash Cycle

• Custodian makes a purchase, or
• Advances cash to employee to make an authorized
  purchase
• Obtains a Memorandum Receipt from employee with
• Date and signature of person accepting the
  advance
• Description of what will be purchased
• Date by which receipt unused cash will be
  returned to custodian (generally not to exceed
  one day)

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Receipt
Petty Cash Cycle

• Every purchase requires a receipt with
• Transaction date (date the cash was disbursed)
• Payee, i.e. name of recipient
• Recipient signature
• Quantity
• Description of items purchased
• Cost of each item
• Total dollar amount of cash disbursed to
  recipient
• Official university business purpose
• Note the speedtype to be charged for the expense

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Payment Voucher
Petty Cash Cycle

• Attach original receipts to the PV that match
  the reimbursement amount requested (except for
  confidential study subjects)
• Payee is custodians name followed by Petty Cash
  Custodian
• Custodian and appropriate approving authority
  (dept authorizing signature) sign
• Separate PV for each petty cash fund
• Submit for reimbursement at least quarterly, at
  year-end, when custodian changes, when a shortage
  is detected

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Payment Voucher
Petty Cash Cycle
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Warrant
Petty Cash Cycle

• The PSC issues a warrant (check) payable to the
  custodian
• PSC Accounts Payable will contact you if there is
  a problem with the PV or the documentation

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Cash
Petty Cash Cycle

• Cash the warrant at the Cashierin Regent. Take
  picture ID.
• Place the cash with the rest of the secure petty
  cash fund
• Purchasing cycle begins again

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Confidential Subject Payments
Human Subject Payments

• Petty Cash can be used to pay human subjects
  confidentially in health-related projects
• Non-confidential study subject payments are
  processed like any other petty cash receipt
• Consider other payment options first
• Payment voucher
• Special purpose checking account through Treasury
  (Joe Tinucci, Joe.Tinucci_at_cu.edu, 303-837-2185)
• Gift cards

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Set-up and Use
Human Subject Payments

• Petty cash fund limited to 2,500
• Set up in the project speedtype
• PI or PIs designee is custodian
• Custodian may hold lt50 appointment
• Petty cash used only for subject payments in that
  project, account code 495102 Study Subjects. Do
  not comingle funds.
• Only one petty cash fund per project

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Multiple Projects
Human Subject Payments

• PIs with multiple human subject projects may set
  up a petty cash fund in each of the projects
  provided the total per custodian does not exceed
  2500.

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How to Keep it Confidential
Human Subject Payments

• Payments are subject to the Health Insurance
  Portability and Accountability Act (HIPAA)
• Assign case/client reference numbers to
  participants in such a way that anonymity is
  maintained (i.e. dont use personal identifiers
  as part of the ).
• Have the subject sign the payment receipt (or log
  if used).
• Keep the receipt/log securely in the department.
• Submit documentation with the Payment Voucher
  that shows the research control numbers, amount
  paid, and date. The control numbers must tie to
  the participant names but do not submit signed
  receipts or names to the PSC.
• The business purpose field on the PV should be
  completed with information that this is a petty
  cash fund reimbursement used to pay confidential
  human subjects with the date (or date range) of
  the payments.

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Small research studies
Human Subject Payments

• If the research project involves occasional or a
  very small number of payments, it is permissible
  to pay subjects from a general departmental petty
  cash fund
• The authorized amount of the existing fund cannot
  be raised to accommodate these payments

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Audits

• Funds are audited by ABS and may be audited at
  any time byinternal external auditors.
• Cash receipts PVs in process must always
  authorized amount
• Campus controller can closefund due to
  violations ormismanagement

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Overages Shortages

• If you discover a shortage, reimburse with a
  Payment Voucher debiting account code 552630 Cash
  Over/Short
• If you discover an overage, reduce funds with a
  Cash Receipt crediting 552630

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Changes to the Petty Cash Fund

• Submit a PCCF form to ABS whenever changes occur
• Close the fund (no longer needed)
• Reduce or increase the authorized amount
• Change in custodian or custodian information
• Change in location where cash is kept
• Consult The Guide chapter 10 for details

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Dos

• Count weekly to verify amount on hand
• Reconcile monthly and keep a copy of the
  reconciliation with the fund
• Close or reduce a fund when no longer needed
• Reimburse fund at least quarterly or more often
  if necessary, at year end, when custodian
  changes, or when a shortage is detected
• Keep secure restrict access at all times
• Get a receipt for every outflow

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Donts

• Do not commingle with other funds
• Do not open a checking account with petty cash
  funds
• Do not buy cash-like items without ABS approval
  (e.g. gift cards, money orders)
• Do not use for prohibited items (slide 6)

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Petty Cash Fund Questions?

• Phensiri Phanichpatom, 492-3568Phanichp_at_colorado.
  edu

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Resources References

• Petty Cash/Change Funds form https//www.cu.edu/ps
  c/forms/
• Cash Control APS https//www.cu.edu/policies/Fisca
  l/index.html
• Cash Control FPS https//www.cu.edu/controller/fin
  ance_procedural_statements.html
• Petty Cash Change Funds PPS https//www.cu.edu/p
  sc/policies/
• The Guide ch.10 Cash Control http//abs.colorado.e
  du/ click on Guide link
• Health Related/Human Subject Research PPS
  https//www.cu.edu/psc/policies/
• UCB Background Check policy http//www.colorado.ed
  u/policies/backgroundcheck.html

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