Petty Cash

Petty Cash Policy Policy Statement The purpose of a petty cash fund is to allow for the reimbursement of minor business expenses in an efficient and cost effective manner. The use of petty cash funds should be limited to reimbursement of ABODE members, and visitors for small expenses, not to exceed $80 (taxi fares, postage, emergency office supplies, human subject payments, etc). The ABODE maintains a petty cash funds. The oversight of these funds is the responsibility of the Executive Board, which authorizes their establishment or modification. Each approved petty cash fund will have a Custodian, who is responsible for reconciling the fund on a regular basis (at least monthly), maintaining required records regarding disbursements that have been made from the fund, and replenishing the fund within the approved level for the fund. Petty cash funds should not be commingled with any other fund. Minor approved business expenses may be reimbursed from the fund using a Petty Cash Voucher. No expenses that are reportable to the IRS or subject to income tax withholding may be reimbursed through petty cash.

Reasons for the Policy The policy promotes the use of petty cash for appropriate business transactions, while assuring the observance of internal controls over petty cash funds in order to minimize the ABODE risk of financial loss.

Scope This policy provides guidance for the authorization, establishment, and maintenance of petty cash funds, including appropriate uses and security standards. Each individual who uses petty cash should review and understand this policy.

Policy Petty cash is a vehicle for payment/reimbursement of small dollar items, but is frequently not the most cost effective way to purchase these goods and services.

ABODE may establish a Petty Cash Fund of up to $500 to pay for miscellaneous expenses. Petty cash should be used for small, "last minute" business expenses where it is impractical to be billed or to have a check issued beforehand.

Please note that petty cash can NOT be used to reimburse purchases made on credit cards or debit cards. Petty cash funds may only be established and used for the following authorized purposes: • • • •

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For qualifying payments to human subjects engaged in ABODE activities Necessary and reasonable small business transactions, not to exceed $80 Emergency purchases of office supplies costing $80 or less Necessary and reasonable food (such as sandwiches and beverages) brought into the office for business meetings, costing $80 or less. Expenses for food exceeding $25 must be accompanied by original receipts. Local transportation, parking, and tolls (all airfare, train tickets, and car rentals are to be submitted through travel and expense reports)

Security It will be the custodians' responsibility to provide adequate precautions for the safekeeping of the funds under their control. All petty cash funds must be stored in a secured device such as a safe or cash box in a locked cabinet. Only the Petty Cash Fund custodian and the department head should have keys to the box and cabinet. Funds should never be left unattended and unsecured.

Roles and Responsibilities • • •

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The Executive Board — Responsible for the creation and ownership of the Petty Cash Policy. The Executive Board — Responsible for the establishment, oversight, and administration of petty cash funds. The Executive Board — Responsible for providing appropriate replenishment of all University petty cash funds. Accounts Payable will review disbursements from such funds to ensure compliance with University policy. Petty Cash Fund Custodians o Performing regular (at least monthly) reconciliations of the fund and maintaining adequate control over the funds

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Providing adequate precautions for the safekeeping of the funds under their control Requesting appropriate replenishment of the fund Closing the fund immediately if the purpose for which it was established ends or changes significantly Provide updated custodian information to the Executive Board

Definitions Custodian — A designated member of ABODE who is responsible for the safekeeping and reconciliation of a petty cash fund, as well as, adherence to ADOBE policy for all reimbursements and payments made from the fund. DAF — An ABODE authorized signature designee whose name is on file through a completed Departmental Authorization Form and authorize expenditures to ensure they are accurate and in compliance with ABODE and other regulations.

Reimbursable Expense — An approved ABODE business expense that is not subject to reporting or withholding as income. Petty Cash Reimbursable Expense — Necessary and reasonable small business transactions, not to exceed $80, including emergency purchases of office supplies costing $80 or less, local carfare, parking and tolls, and qualifying payments to human subjects engaged in research activities.

When to Use Other Procedures •

Travel & Business Expense Reports to request reimbursement for: o All individual expenses, including the emergency purchase of supplies and minor equipment costing over $80 o Registration fees o Business meals outside of the office o Out-of-town travel expense o ALL credit card/debit card purchases

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Increasing Petty Cash Funds

Special circumstances requiring Petty Cash Funds greater than $500 requires the prior approval of the Board of Trustees.

Closing a Petty Cash Fund The custodian of a Petty Cash Fund must close the fund immediately if the purpose for which the fund was established ends or changes significantly. Upon completion of the custodian's membership by ABODE, the fund must either be closed or a new custodian appointed. There will be periodic reviews of account activity and all inactive accounts will be investigated and closed. To close an existing Petty Cash Fund, deposit any remaining cash in the Fund via a "Cash Receipt Voucher" and send a memo along with a validated cash receipt voucher and any petty cash receipts to the Board of Trustees. Petty Cash Funds need not be closed and reopened each year. They remain active for the life of an account or until they are requested to be closed.

Changing the Custodian To change the custodian of a Petty Cash Fund, the current custodian must: • • • •

Reconcile the Petty Cash Fund The new custodian and the department head must sign the reconciliation form Transfer the fund to its new custodian Send a signed memo to the authorized finance officer

Requesting Reimbursement from the Petty Cash Fund ABODE members may request reimbursement for a business-related expense, not to exceed $80, from the custodian. For each expense, an individual must submit a completed Petty Cash Voucher/Log accompanied by original receipts. •

The Petty Cash Voucher/Log — provide: o Date of purchase o Printed or typed name of the person reimbursed o Description of the item purchased, including a valid business reason o For business meals inside the office, document the business purpose of the meeting and list those in attendance if 10 or less people or the # of attendees if group is larger than 10

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For transportation, include origin, destination, and business purpose Dollar amount (not to exceed $80) Original receipt Signature of the person who received payment Signature of the custodian who approved the reimbursement

Under no circumstance may an individual, including the custodian, approve his or her own Petty Cash voucher/log or that of a person to whom he or she reports. It is the responsibility of the custodian to ensure that each voucher is complete, accurate, and accompanied by original documentation. Petty Cash Vouchers/Logs, as well as Check Request forms, are available in the ABODE website.

Replenishing a Petty Cash Fund When the fund is low, the custodian should complete a Check Request to replenish the Petty Cash Fund. The Check Request is to be approved by the finance officer along with the proper documentation. Under no circumstance may an individual approve his or her own Petty Cash reimbursements or that of a person to whom he or she reports. This approval certifies: • • • • •

Funding available Compliance with funding agency regulations Compliance with ABODE reimbursement and business expense policy Propriety of travel expenses Completeness of documentation and accuracy of accounting

Check Request: • • • •

Print or type the custodian's name in the "Payee" section. Print or type "to replenish the petty cash fund" and the Petty Cash Fund number provided by the finance officer. Provide all other appropriate information, including the ABODE address, total expenses, and account number. Obtain the approval of the finance officer

Documentation:

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Arrange vouchers and original receipts in chronological order (exclude any confidential subject information if applicable) Enclose documentation in a large envelope Print or type the date, amount, the custodian's name, the department name, and the check request number on the envelope Staple the envelope to the check request Custodian must keep copies of original documentation for their own files

It is no longer necessary to tape documentation, such as original vouchers and receipts, to letter-sized sheets of paper.

Reconciliation The custodian must reconcile the Petty Cash Fund on a regular basis, weekly if the Fund is active, but no less frequently than monthly. Reconciliation ensures that the sum of the outstanding reimbursements, cash, and vouchers is equal to the original amount of the Fund. For those departments with multiple Petty Cash Funds, an overall department reconciliation should be performed quarterly. If there is a small overage or shortage (under $5), the custodian should make the adjustment when entering the transaction. The entry on the Check Request form should contain the description, "Petty Cash Vouchers less overage (or plus shortage) of $x.xx". If the shortage is significant, the Board of Trustees be notified . All overages/shortages should be recorded.

Security It will be the custodians' responsibility to provide adequate precautions for the safekeeping of the funds under their control. All petty cash funds must be stored in a secured device such as a safe or cash box in a locked cabinet. Only the Petty Cash Fund custodian and the department head should have keys to the box and cabinet. Funds should never be left unattended and unsecured. In the event funds are lost or stolen, the custodian must contact the financial officer to obtain a Security Report and notify the Trustees of the loss. The custodian may be subject to disciplinary action for any violations of this policy contributing to the loss of funds. Send an approved check request to replenish the fund, with a copy of the Security Report, to the finance officer.