Departmental Petty Cash Fund Checking Account Procedures

Departmental Petty Cash Fund Checking Account Procedures
Type of Policy
Administrative
jbarber32
Policy No
1.5.4
Effective Date
Last Revised
Review Date
Policy Owner
Controller's Office
Contact Name
Amy Herron
Contact Title
Controller
Contact Email
amy.herron@business.gatech.edu
Reason for Policy

This policy was created to provide guidance to schools, colleges, departments or units of the Institute as it relates to Departmental Petty Cash Fund Checking Accounts.

Policy Statement

This policy describes the methods required to establish or maintain a petty cash fund in a checking account. Please refer to "Petty Cash Fund General Guidelines" for specific information regarding allowable petty cash transactions.

Scope

This policy applies to all schools, colleges, departments, and units of the Institute.

Procedures

Fund Establishment
To establish a petty cash checking account, a completed Petty Cash Request/Maintenance Form should be submitted to the Controller's Office for approval. The Controller's Office will notify the department head once the fund is approved. The department head will notify the custodian and ask that he/she request the following information from the local bank:

  1. Signature cards
  2. Checking account information
  3. Bank contact person

This information should be forwarded to the Controller’s Office so that the initial checking account can be set up. The custodian will then be forwarded the following information from the Controller's Office:

  1. Bank contact for the account
  2. Procedures for reconciling the bank account
  3. Copy of agreement with the bank and Georgia Tech
  4. Copy of authorized check writers (signature card)
  5. Any other pertinent information required to establish this account

Departmental Responsibilities
The department head or designee will be responsible for handling the following information related to the checking account:

  1. Updating the fund custodians as they change
  2. Ordering checks as needed
  3. Updating the Controller's Office on any unresolved problems with the bank
  4. Maintaining the account on a daily basis
  5. Ensuring that the account is not overdrawn

If changes to the established fund amount become necessary, a new Petty Cash Request/Maintenance Form must be submitted to the Controller's Office noting the existence of the current petty cash fund and the request for an increase or decrease of funds and/or change of custodian.

Account Controls (new section)
Three basic controls must be incorporated into each petty cash account that establishes a banking account.

  1. Of the signers on the account, at least two representatives of Administration & Finance that are also signers on the Institute’s primary operational checking accounts must always be signers on Petty Cash checking accounts.
  2. Departments must determine the maximum dollar amount of any written check, and file that information with the bank via an “Account Reconcilement Services Positive Pay Authorization form” (or other similar applicable bank form from the current banking provider) in order to prevent fraudulent checks for a larger amount from clearing. (Maximum amount can be changed on an as needed basis.)
  3. Accounts should establish a positive pay methodology with the bank. Any account that chooses not to implement a bank established positive pay, must document why they will not implement positive pay, and must be willing to fund any operational losses that occur from potential fraudulent activities. (Positive pay is an automated fraud detection tool that matches the account number, the check number, and the dollar amount of each check presented for payment against a list of checks previously authorized and issued by the company.)

Fund Maintenance
Each petty cash checking account custodian will be responsible for reconciling his/her petty cash bank account. The custodian should request two copies of the monthly petty cash checking account statements. One statement should be sent directly to the custodian along with the canceled checks while the other should be sent directly to the Controller's Office without attachments.

The custodian will be required to forward completed reconciliations and other supporting documentation to the Controller's Office by the third week following the statement date. The Controller's Office will then review the reconciliation for accuracy and work with the department to correct any errors. Delinquent reconciliations will result in a hold on account replenishment requests until the reconciliation is received.

Reimbursement Requirements
Employees should submit original receipts for petty cash purchases (see Petty Cash Fund General Guidelines 1.5.1 for specific information on allowable purchases) to the departmental fund custodian. To improve financial reporting, the reimbursement request should be made within ten (10) working days following a purchase, or, if at year end, by the published cutoff date. Failure to turn in receipts promptly may jeopardize reimbursements if the funding source has lapsed.

Prior to reimbursement, the fund custodian should ensure that the following information and attachments are included with the reimbursement request:

 
Vendor name
Date of purchase
Price per item
Total price for the quantity received
  1. Original of the vendor's customary receipt which includes:
  2. Appropriate accounting distribution
  3. Signature of the individual authorized to approve departmental purchases on the reimbursement request only.
  4. Custodian may require purchaser to sign or initial original receipt.

Upon receipt of completed information, the petty cash expenditures will be reimbursed by the fund custodian.

Replenishment Requirements
Fund replenishment requests should be submitted to the Accounts Payable Department on the Petty Cash Replenishment/Reimbursement Request Form. Requests for fund replenishment should be submitted in a timely manner and should allow ample time for processing.

  1. Requests should include a summary of all charges by account number. The summary should include each unique accounting distribution only once with the total of all charges for the account.
  2. Replenishment requests require an approval signature by the authorized departmental representative. Accounts Payable will return unsigned replenishment requests to the originator.
  3. Replenishment requests along with one copy of the request (form only) should be attached to supporting original receipts and submitted to Accounts Payable. Upon receipt of completed information, the Accounts Payable Department will return a check to the department for the amount of the request.

Closing the Fund - Voluntary
Fund replenishment requests should be submitted to the Accounts Payable Department on the Petty Cash Replenishment/Reimbursement Request Form . Requests for fund replenishment should be submitted in a timely manner and should allow ample time for processing.

  1. Requests should include a summary of all charges by account number. The summary should include each unique accounting distribution only once with the total of all charges for the account.
  2. Replenishment requests require an approval signature by the authorized departmental representative. Accounts Payable will return unsigned replenishment requests to the originator.
  3. Replenishment requests along with one copy of the request (form only) should be attached to supporting original receipts and submitted to Accounts Payable. Upon receipt of completed information, the Accounts Payable Department will return a check to the department for the amount of the request.

Closing the Fund - Involuntary
Repeated violations of petty cash procedures can result in termination of fund. The checking account and the general ledger account will be closed by the Controller's Office and replenishments will no longer be processed by the Accounts Payable Department. The fund custodian is ultimately responsible for the disposition of funds.

Forms
Responsibilities
  • Campus Schools, Colleges, Departments or Units are responsible for managing departmental petty cash fund checking accounts per the guidelines and procedures in this policy.
  • The Bursar’s Office is responsible for replenishing departmental petty cash funds as requested.
  • The Controller’s Office is responsible for reviewing requests for petty cash fund checking accounts and setting up the initial checking account with assistance from Treasury Services.
Enforcement

To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508

Policy History
Revision Date Author Description
10-03-2014 Controller’s Office Updates to verbiage. New section added by Treasury Services.