Petty Cash and Change Funds Policy

Purpose

To maintain strong internal controls over (1) the reimbursement of University-related expenses paid from personal funds and (2) the establishment, use, and reconciliation of departmental petty-cash and change funds, thereby safeguarding University assets and ensuring accurate accounting records.

Scope

This policy applies to all McNeese State University employees who either seek reimbursement from the central petty-cash fund or are responsible for departmental petty-cash or change funds. Students are not permitted to incur expenses on behalf of the University.

Objectives

• Safeguard University funds against waste, fraud, or inefficiency.
• Ensure accuracy and reliability of accounting records.
• Minimize the risk of error or loss without incurring unreasonable costs.

Audit

All petty-cash and change-fund activity is subject to audit at any time by the Office of Internal Audit.

Definitions

• Petty Cash Fund: Cash maintained for immediate or emergency payments not exceeding $100.
• Change Fund: Cash maintained solely to make change; no expenditures are permitted.
• Custodian: The individual legally responsible for a specific petty-cash or change fund.
• Receipt: A legible invoice, cash receipt, or cash-register tape documenting a purchase.

Reimbursement from the Central Petty Cash Fund (Cashier’s Office)

Eligibility and Dollar Limit

• Reimbursements are for employees who used personal funds for a valid University purpose.
• No single purchase may exceed $100, and “stringing” multiple small purchases to bypass the limit is prohibited.

Prohibited Reimbursements

Petty cash may not be used for: services, travel, gifts, personal expenses, personal loans or check cashing, hazardous materials, faculty dues, club dues, parking permits, traffic citations, interest charges, food purchases, or alcoholic beverages (including indirect reimbursement on federal or state funds).

Reimbursement Procedure

1. Pre-approval: Obtain advance approval from the budget-unit head.
2. Purchase: Pay with personal funds and retain the original receipt.
3. Voucher: Complete a Petty Cash Voucher (date, vendor, description, amount, department, expenditure code and cost center, employee name, total).
4. Department Approval: Submit the voucher and original receipt to the budget-unit head for signature.
5. Processing: Forward the signed voucher to accounts payable for coding verification, then to the Cashier’s Office.
6. Payout and Filing: The Cashier’s Office:
   • Pays the employee after obtaining the employee’s signature and date;
   • Signs and dates the voucher; and
   • Retains the voucher and receipt to replenish the central petty-cash fund.

Departmental Petty Cash and Change Funds

Establishing a Fund

• The prospective custodian submits a Request for Petty Cash or Change Fund Advance Form to the Office of Business Affairs; a copy is sent to the Office of Administrative Accounting for monitoring and reconciliation purposes.
• Only departments approved as cash-collection points may establish change funds (see Cash Collections and Deposits Policy).
• Fund increases, decreases, transfers, or closures require formal approval by the Office of Business Affairs.

Expenditure and Dollar Limit

The same $100 cap and prohibited-purchase list in the Prohibited Reimbursements section above apply to departmental petty-cash funds.

Departmental Reimbursement Procedure

1. Employee obtains budget-unit approval and makes purchase.
2. Employee completes a Petty Cash Voucher (date, vendor, description, amount, department, expenditure code and cost center, employee name, total).
3. Voucher and receipt are approved by the budget-unit head.
4. Custodian reimburses the employee from the fund, has the employee sign, and retains the signed voucher and receipt for replenishment.

Custodian Responsibilities

• Maintain the fund under lock and key; do not allow access to others.
• Keep petty-cash funds separate from change funds and other monies.
• Reimburse only for actual, documented expenditures.
• Immediately report theft or unexplained loss to McNeese Police, the comptroller, and the Office of Internal Audit; include the police report with the reimbursement request.
• Notify the comptroller when relieved of responsibility or if office location changes.

Reconciliation and Verification

• Cash on hand + receipts = authorized fund balance at all times.
• Complete a Petty Cash and Change Fund Reconciliation form quarterly and submit it to the Office of Internal Audit.
• Overages are deposited with the Cashier to the department’s over/short object code; shortages are repaid personally by the custodian unless caused by circumstances beyond the custodian’s control.
• A Change/Petty Cash Verification form is issued at each fiscal year-end by the accounts receivable supervisor and must be returned within 10 business days.

Change of Custodian

• The outgoing custodian closes the existing fund by returning it to the Office of Business Affairs.
• The incoming custodian submits a new Request for Petty Cash or Change Fund Advance Form for a replacement fund.

Loss of Funds

Losses resulting from the custodian’s failure to safeguard the fund are the custodian’s liability. Unavoidable losses are repaid from the unit’s budget or other available operating funds.

Communication

This policy is distributed via the University Policies webpage.