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Petty Cash

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					Petty Cash


Overview

Petty cash is held in order to make immediate payment of small expenditure items which cannot be
met through the reimbursement of expense claims, by credit or government procurement card or
through reimbursement of expense claims. The number of petty cash accounts held should be kept to a
minimum and payment by cash should be restricted to as low a level as possible due to the inherent risk
associated with cash dealings. Items may include:


    •    Travel eg short taxi journeys
    •    Postage
    •    Minor refreshments eg coffee/tea for external visitors
    •    Small consumables eg ad hoc stationery


FMD will monitor the use of petty cash and Departmental petty cash holders will be accountable for the
use made of the facility.   ‘Borrowing’ from petty cash is not permitted. All cash disbursed must be
used solely towards the objectives of the House of Commons.


Individual payments should not exceed £50.




Responsibilities

The Director of Financial Management is responsible for the policy in relation to petty cash, ensuring it
is reviewed regularly and provides value for money. He is also responsible for the security of cash and
to the opening and closing of petty cash facilities. The Director can suspend the use of a petty cash
facility if he considers it is not being operated properly.


The Senior Accounts Officer in the FMD Treasury Function is responsible for the day to day
safekeeping, issue and replenishment of petty cash and the reconciliation of cash holdings to financial
records. They should immediately inform the Director of Finance of any irregular or fraudulent activity or
loss.


Each Department has at least one staff member who holds petty cash.         Departmental petty cash
holders are responsible for the day to day safekeeping, issue and replenishment of petty cash (through
the Treasury Function) and the reconciliation of cash holdings to financial records. They should
immediately notify the Senior Accounts Clerk of any irregular or fraudulent activity or loss.


Authorised signatories are responsible for signing cheques in order to replenish petty cash holdings
and ensure the replenishment is valid. A list of authorised signatories is at annex __


Employees are responsible for submitting appropriate, accurate and timely requests for petty cash that
meet the requirements of this guidance and the objectives of the House of Commons.
Procedures

Making a Claim from Petty Cash
Employees who wish to make a petty cash claim should submit a request to the Senior Accounts
Officer in the FMD Treasury Function or the Departmental petty cash holder using an authorised petty
cash voucher – form FO9. The voucher should clearly state:


    •    the purpose of the cash requirement
    •    the amount of cash
    •    the account code and expenditure type


Employees are responsible for providing supporting receipts for cash claims in a timely fashion.


Receiving Payment from Petty Cash
The Senior Accounts Officer in the FMD Treasury Function or the Departmental petty cash holder will:


    •    check the petty cash voucher (FO9) for regularity ie the payment meets House of Commons
         objectives, completeness and authorisation
    •    record the details centrally
    •    on issue of cash, request a name, signature and date verification from the recipient
    •    ensure the claim is supported by a valid receipt
    •    maintain documentation in support of petty cash payments




Controls

Physical control of petty cash
Accounts Receivable
    •    Petty cash is retained in a petty cash box in FMD and the Senior Accounts Officer retains the
         key. The cash box is kept in a safe which has a ‘Manager code’ and key access. The Senior
         Accounts Officer retains the key to the safe and has knowledge of the ‘Manager Code’. Two
         other members of the Accounts Receivable team have knowledge of the ‘Manager Code’. The
         safe also has a ‘Master code’.
    •    The ‘Master code’ and instructions to the safe are kept securely by the Director of Financial
         Management.
    •    The Director General, Resources, retains a spare set of keys to both the safe and the petty
         cash box held in the Accounts Receivable section.
    •    Replenishment of cash is made by cheque at Lloyds Bank. The Senior Accounts Officer
         immediately places the cash in the petty cash box and records the replenishment on Agresso.
    •    The ‘Manager Code’ should be changed at least once per annum and when there is a change
         of staff in the Senior Accounts Officer post.
Departmental Petty Cash
     •    Petty cash is retained in a petty cash box which is locked away. The petty cash should be
          ‘owned’ by one person with appropriate backup in case they are absent. Petty cash holders
          should be made aware of procedures and checks in connection with cash holdings.
     •    Replenishment of petty cash is made by the Departmental petty cash holder to the Senior
          Accounts Officer in the FMD Treasury function on a ‘Petty Cash Top Up Request’ form (FO12).




Reconciliation
The Senior Accounts Officer in the FMD Treasury function
     •    Counts and checks the petty cash once a week
     •    Passes the cash to the Financial Accountant who undertakes a further count and check
     •    Reconciles the balance held on the accounting system to the cash balance held


Twice a year (by the end of October and March) the Senior Accounts Officer in the FMD Treasury
function will visit all petty cash holders to:
     •    Count the cash held and ensure it reconciles to records and the year end return
     •    Signs, together with the petty cash holder, a certificate confirming the balance and retains the
          certificate as evidence of reconciliation


Departmental petty cash holders:
     •    Count and check the petty cash once per month
     •    Submit a monthly reconciliation return to the Senior Accounts Officer in the FMD Treasury
          function


Authorisation
Authorised cheque signatories must:
     •    Check requests for cash replenishments for reasonableness
     •    Check an FO12 has been completed
     •    Authorise payment if appropriate




Checklists


Responsibility                    Check                                              Frequency


Petty Cash Claimant               On submitting a petty cash claim ensure:           On submission of
                                  - The purpose of the cash is valid ie supports     each claim
                                  House objectives
                                  - The claim is appropriate for cash
                                  reimbursement ie would payment by card or
                                  reimbursement by expenses be feasible
                                  - It is supported by valid documentation eg a
                                  receipt
                            - An FO9 is completed and appropriately
                            authorised


                            On receipt of cash, ensure the FO9 is signed.


Senior Accounts Officer     Petty cash levels are monitored and replenished   Ongoing
                            as appropriate.
                            Cash is kept secure.                              Ongoing
                            Cash and accounting records are reconciled.       Monthly
                            Check petty cash claims to ensure:                On receipt of petty
                            - The purpose of the cash is valid ie supports    cash claim
                            House objectives
                            - The claim is appropriate for cash
                            reimbursement ie would payment by card or
                            reimbursement of expenses be feasible
                            - It is supported by valid documentation eg a
                            receipt
                            - An FO9 has been completed correctly and
                            authorised
                            The ‘Manager’ Code on the safe is altered         Annually/on change
                            annually and when new to the job.                 of staff
                            Perform annual cash checks on departmental        Annual
                            petty cash.




Departmental Petty Cash     Petty cash levels are monitored and replenished   Ongoing
Holders                     as appropriate.
                            Cash is kept secure.                              Ongoing
                            Cash is reconciled to accounting records and
                            reported to the Senior Accounts Officer in the
                            Treasury Function, FMD.                           Monthly
                            Check petty cash claims to ensure:                On receipt of petty
                            - The purpose of the cash is valid ie supports    cash claim
                            House objectives
                            - The claim is appropriate for cash
                            reimbursement ie would payment by card or
                            reimbursement of expenses be feasible
                            - It is supported by valid documentation eg a
                            receipt
                            - An FO9 has been completed correctly and
                            authorised




If any member of staff is unsure of procedures in relation to petty cash they should contact FMD.

				
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