pettycash by methyae

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									Petty Cash Funds
Presented by ABS
Accounting & Business Support

What is a petty cash fund?
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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?
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Preferably it isn’t 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?
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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?
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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 it’s cash!  Prone to more risk and abuse  Least desirable form of payment

 Less

secure  Earns no interest
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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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Petty Cash Set-Up Basics

Setting up a Petty Cash Fund
Do you need one? Secure location? Designate custodian Complete paperwork

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Petty Cash Set-Up Basics

Do you need one? Secure location? Designate custodian Complete paperwork

Do you need one?

 Other

Decide that you really need one
procurement options won’t work?  Have the staff to manage it?  Are you absolutely, positively certain?  Have we beat this one up enough?

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Petty Cash Set-Up Basics

Do you need one? Secure location? Designate custodian Complete paperwork

Secure Location


Locked securely while not in use
 Locked

drawer or cabinet in a  Locked office  Door closed & locked when vacant
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 

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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Petty Cash Set-Up Basics

Do you need one? Secure location?
Designate custodian

Custodian
    

Complete paperwork

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 Boulder’s HR Background Check policy states that a Criminal History and Financial History check is required for positions that handle cash

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Petty Cash Set-Up Basics

Do you need one? Secure location? Designate custodian
Complete paperwork

Paperwork
      

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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Petty Cash Set-Up Basics

Do you need one? Secure location? Designate custodian
Complete paperwork

Paperwork
     

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 Cashier’s window (with picture ID)

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Balance Sheet Impact
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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

Paycheck
(hand)

Purchase
(mouth)

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Petty Cash Cycle

Overview: CU Petty Cash Cycle
Purchase Receipt

Cash PSC Warrant
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Payment Voucher

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Petty Cash Cycle

Purchase

Receipt

Purchase
Cash Payment Voucher

 

Custodian makes a purchase, or Advances cash to employee to make an authorized purchase
 Obtains

 

PSC Warrant

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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Petty Cash Cycle

Purchase

Receipt

Receipt
Cash Payment Voucher



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
PSC Warrant

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Petty Cash Cycle

Purchase

Receipt

Payment Voucher
Cash

Payment Voucher
PSC Warrant

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 

Attach original receipts to the PV that match the reimbursement amount requested (except for confidential study subjects) Payee is custodian’s 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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Petty Cash Cycle

Purchase

Receipt

Payment Voucher
Cash PSC Warrant

Payment Voucher

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Petty Cash Cycle

Purchase

Receipt

Warrant
Cash Payment Voucher

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


PSC Warrant

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Petty Cash Cycle

Purchase

Receipt

Cash
Cash
Payment Voucher

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

PSC Warrant

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Human Subject Payments

Confidential Subject Payments
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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@cu.edu, 303-837-2185)  Gift cards

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Human Subject Payments

Set-up and Use
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Petty cash fund limited to $2,500 Set up in the project speedtype PI or PI’s designee is custodian Custodian may hold <50% 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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Human Subject Payments

Multiple Projects
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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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Human Subject Payments

How to Keep it Confidential
    

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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. don’t 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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Human Subject Payments

Small research studies
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
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Funds are audited by ABS and may be audited at any time by internal & external auditors. Cash + receipts + PVs in process must always = authorized amount Campus controller can close fund due to violations or mismanagement
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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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Do’s
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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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Don’ts
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, 492-3568 Phanichp@colorado.edu

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Resources & References
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Petty Cash/Change Funds form https://www.cu.edu/psc/forms/ Cash Control APS https://www.cu.edu/policies/Fiscal/index.html Cash Control FPS https://www.cu.edu/controller/finance_procedural_statements.html Petty Cash & Change Funds PPS https://www.cu.edu/psc/policies/ The Guide ch.10 Cash Control http://abs.colorado.edu/ click on Guide link Health Related/Human Subject Research PPS https://www.cu.edu/psc/policies/ UCB Background Check policy http://www.colorado.edu/policies/backgroundcheck.html

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