ctcLink Accounting Manual | 40.30.10.5 Petty Cash (1000020)

Change Funds

Change Funds are used solely for making change in across-the-counter cash transactions.

Petty Cash/Imprest Funds

• Petty Cash/Imprest Funds is cash held to make change or pay small obligations when the issuance of a formal voucher and/or check would be cost prohibitive and time consuming to produce.
• Petty Cash funds may be in the form of cash or separate Imprest checking accounts.

The district president/chancellor (or authorized designee) must issue and maintain on file a letter designating the individual assigned as custodian, the amount of the cash fund and the purpose for which it will be spent.

The district president/chancellor (or authorized designee) is responsible for the appropriate and legal use of petty cash.

Colleges must establish written petty cash accounting and internal control procedures in accordance with OFM's prescribed policies.

The custodian of the petty cash fund must ensure the fund is only used for authorized purposes, adequate supporting documentation is maintained and reconciled regularly.

Petty cash funds in excess of $100 must be maintained in a checking account in a local financial institution in the college's name unless the college has a safe or vault to safeguard petty cash, including change funds.

To establish a petty cash account the college should prepare a voucher with a debit to 1000020 and credit 1000070.

The check should be issued using the College Name (with Cash in the memo line) and endorsed and cashed by the custodian (if for a change fund or petty cash fund) or deposited if maintained in a separate bank account.

Illustrative Entry

 

The district college president/chancellor (or authorized designee) has the authority to reduce or abolish a local petty cash account at any time.

To close a petty cash fund or decrease a change fund, the college should prepare a deposit with a debit to 1000070 and credit to 1000020. Prior to closing a petty cash fund, a reconciliation must be performed or reviewed by a college employee other than the custodian.

Illustrative Entry

All disbursements from petty cash accounts must:

1. Be documented and supported by receipts or vouchers bearing the signature of the payee.
2. Include the date, name of payee, purpose of disbursements, amount paid, signature of the person authorizing disbursement and the proper account distribution.
3. Be recorded in a register or log reflecting the balance of the account to aid in replenishing the fund.
4. Reflect the original amount of the petty cash fund. Total cash on hand, plus the amount of expenditures (since the last replenishment) must equal the amount originally advanced to establish the petty cash account.

To replenish a petty cash account for disbursements made, the appropriate voucher must:

1. Be prepared with the College Name (with Cash in the memo line) and endorsed and cashed by the custodian (if for a change fund or petty cash fund) or deposited if maintained in a separate bank account.
2. Include all documents supporting the disbursements.
3. Include the chartstring distributions.
4. Be reviewed and approved for payment by someone other than the custodian.
5. Equal the authorized petty cash fund amount (when added to the cash remaining in the account).

Illustrative Entry