Petty Cash

What is my role as Department Head?

On very rare occasions, a department has the need for a petty cash fund.  If such fund exists, it should be on the University’s books as a petty cash account, with a named custodian.  The Department Head should ensure that the petty cash activities are appropriate and oversee the fund as necessary.

Petty Cash is an area that should be avoided wherever possible.  In most cases, a fund is not justified.  Most petty cash funds on the books of the University are actually ‘change funds’, which are often necessary for concession or similar operations.  However, all petty cash/change funds must be reflected on a current basis on the University’s books and must be identified with a named custodian.

How and when do I approve petty cash?

Transactions may be processed through petty cash when the total purchase does not exceed $100, and if the guidelines of Procurement Services are followed.  Cash items that are considered to be non-essential to the department will not be reimbursed by Financial Services.  Purchases may not be for non-reimbursable expenses such as personal expenses.

The process is that the department employee collects all receipts and support for expenses paid through petty cash, and submits the Banner Petty Cash Expense Report, listing the vendor name, description of the item, and coding for type of expenditure, with the employee’s signature and the approval for the department (budget authority).  This is then processed by Financial Services, and the petty cash account is reimbursed.

 All petty cash funds should be secured / locked.  If funds are lost, the custodian is personally responsible for reimbursement of the fund. 

 Examples of allowable petty cash expenses

• Camp Bear operations (temporary need)
• Tent Theater (small purchases by faculty/students of goods that may not be purchased by P-Card)
• Change fund (concessions, library, etc.)
• Emergency operations
• No P-Card for the Department

Examples of expenses not allowed

• Items that can be procured by P-Card

• Gifts, flowers, sales tax
• Food items

• Expenses that should be processed via employee expense report

What policies and resources are available?

• Petty Cash Policy
• Petty Cash and Change Fund Request Form
• Petty cash expense report (reimbursement) form

On a practical basis - what should I do?

• Ultimately, the Department Head is accountable for the approval of petty cash expenses, and ensuring that the custodian secures the cash and that the expenses are valid and are not otherwise to be processed by Procurement Card or employee expense reimbursement. 
• If there is a petty cash account, (versus change fund) make sure you approve the reimbursement form.  If there is a shortage, the Custodian is responsible for replacement of funds. 
• Ideally, avoid the use of petty cash.  Accounting for Petty Cash and the processing/paperwork required is generally not worth the effort for most departments.  In addition, petty cash is an area that is subject to frequent audit.   
• If your department has a petty cash fund established and it is no longer necessary or being utilized, they should contact Financial Services and close the account and return the fund.

What if I have Questions?

Contact Financial Services:  GeneralAccounting@missouristate.edu