Policy 5:26 - Established Cash Funds (2024)

Policy Contact: Accounts Receivable Office

1. Purpose

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   This policy and its procedures set forth the different types of cash funds that may be established at the University and the guidelines for the establishment of such funds.

2. Policy
   
   1. Cash funds may be established only with the approval of the University Bursar or University Controller.
      
   2. Cash funds are established for specific purposes and must not be commingled with other cash funds, nor are they to be used for any purposes other than those for which they are established. Cash funds shall not be used for personal loans to employees, including, but not limited to, IOUs or post-dated checks.
      
   3. Cash funds may not be established by withholding cash receipts from deposit or by using other available cash resources.
      
   4. The following types of cash funds may be established at the University:
      1. Petty cash funds
      2. Permanent change funds
      3. Temporary change funds
         
   5. Petty cash funds may be established for incidental expenditures or situations that do not permit the normal processing of invoice payments.
      
   6. Permanent and temporary change funds may be established for the purpose of making change in connection with revenue collections. Temporary change funds shall not be established for more than thirty (30) days without prior approval of the University Controller.
      
3. Procedures
   
   1. Requests to establish petty cash funds must be made to the University Bursar or University Controller using the Request for Petty Cash Fund form.
      1. If more than one location is used, a separate petty cash fund must be established for each location.
      2. The required cash amount is advanced from the Cashier’s change funds to establish the petty cash fund. The custodian to whom the petty cash fund is advanced must sign for the advance and will be held accountable for the funds.
      3. The established amount of the petty cash fund must always be accounted for in receipted bills or cash and currency. Payments for incidental purchases are made from the petty cash fund, and the original receipted bills for the purchases are placed in the cash box, or other secure container, to support the disbursem*nt of cash.
      4. After the available cash and currency is substantially depleted by payment of incidental expenditures, the receipted bills are entered on a direct pay invoice in Banner chargeable to the appropriate FOAP of the department and made payable to the petty cash fund. The issued check is then cashed at the Cashier’s Office, and the currency and change is returned by the custodian to the petty cash fund. After the reimbursem*nt, the petty cash fund will be reinstated to the original amount of the advance. Reimbursem*nts to the petty cash fund are to be made on a monthly basis, or more frequently if the petty cash fund is substantially depleted.
      5. When it is determined that the petty cash fund is greater than necessary, the excess should be returned by the custodian to the Cashier’s Office. The original advance will be credited by the Cashier for the amount returned. The custodian must not deposit the excess to a FOAP of the department because this will not give credit on the original advance. The authorized amount of the petty cash fund should approximate one (1) month’s normal incidental expenditures. Increases in the petty cash fund may be requested through the University Bursar or University Controller.
         
   2. Requests to establish permanent change funds must be made through the University Bursar or University Controller using the Request for Permanent Change Fund form.
      1. The required cash amount is advanced from the Cashier’s change funds to establish the permanent change fund. The custodian to whom the permanent change fund is advanced must sign for the advance and will be held accountable for the funds. If the permanent change fund is allocated to more than one location, the location of each portion of the fund must be noted on the request by the custodian.
      2. The custodian must verify the balance of the change fund daily, or at least weekly, depending upon the volume of usage of the change fund. The currency, coin, checks, and cash items should be added to determine the total balance on hand. If revenue collections are received, the total of the collections must be reconciled to receipts. The total balance on hand less the revenue collections must equal the established change fund balance. An effort should be made to determine the reason for any differences, either long or short, and appropriate action must be taken to rectify the cause of the difference. If a cash shortage or overage exists after the change fund is reconciled, the appropriate revenue code must be used when deposit of the revenue collection is made.
      3. When required, checks may be exchanged for cash by the custodian of the change fund at the Cashier’s Office or at the University’s local bank account. If the dollar amount is greater than $500, the University Police Department must be contacted to take the checks to the local bank account to be exchanged for cash. All personnel who are authorized to exchange checks for cash at the local account must be approved by the University Controller.
      4. When the balance in the change fund is greater than necessary or the amount is insufficient to meet operational needs, the change fund may be decreased or increased in the same manner that a petty cash fund is decreased or increased. If the change fund is inactive for longer than one (1) month, it must be returned to the Cashier’s Office until such time that it is needed.
         
   3. Requests to establish temporary change funds must be made through the University Cashier’s Office using the Request for Temporary Change Fund form.
      1. The custodian to whom the temporary change fund is advanced must sign for the advance and indicate the purpose of the temporary change fund and the date the funds will be returned. Failure to return the temporary change fund in a timely manner may result in denial of future temporary change fund requests. The Cashier’s Office will report to the University Controller monthly the outstanding temporary change funds and the expected dates of return.
      2. Temporary change funds must be reconciled and replenished in the same manner as permanent change funds. The custodian shall return the temporary change fund to the Cashier’s Office. The Cashier’s Office shall sign the original request form indicating that all monies were returned. The custodian of the temporary change fund will be held accountable for all shortages unless they can provide documentation as to the reason for the shortage.
      3. In accordance with the University Cash Receipts Policy, cash funds must be adequately stored and safeguarded at all times and must be stored in a locked container segregated from other cash assets for overnight safekeeping.
      4. Whenever a change occurs in the custodian of a cash fund, the current custodian must return the change fund to the Cashier’s Office or request a cash count to verify accountability of the cash fund. A new request for a cash fund is prepared and the new custodian must sign the request indicating that the funds were received. The new request must also be approved by the University Bursar or University Controller.

4. Responsible Administrator

   The Vice President for Finance and Budget, or designee, is responsible for the annual and ad hoc review of this policy and its procedures. The University President is responsible for approval of this policy.

Approved by President on 04/26/2016.

Associated Forms:Request for Petty Cash Fund; Request for Permanent Change Fund; Request for Temporary Change Fund