GAP 200.030, Petty Cash and Change Funds

Contents

1. General
2. Establishing a New Petty Cash or Change Fund
3. Procedures for Handling Petty Cash & Change Funds
4. Reimbursement of Petty Cash Fund
5. Losses and Theft
6. Procedures for Changing or Closing a Petty Cash or Change Fund

I. General

Petty Cash Fund

An amount of cash, not to exceed $500, held by a department or office to pay for incidental expenses. The fund needs to be replenished periodically (recommended monthly) as incidental expenses are incurred and reduce the amount of funds on hand. "Petty Cash" accounts should not be confused with "Sponsored Programs/Research Short-Term Cash Funds" - please see GAP 200.032, Research Subject Payments using Short-Term Cash Funds for details on this fund.

Change Fund

An amount of cash held by a department or office and used to give change to customers when they are paying for goods or services.

Duke allows petty cash and change funds where needed for convenience paying for incidental expenses or for making change in departments where cash is regularly received from customers. The funds received by a department to establish a petty cash or change fund are not an expense, but a loan from the general fund of the University that must be properly safeguarded by an established custodian and returned when the fund is no longer being used and/or closed.

II. Establishing a New Petty Cash or Change Fund

To establish a new petty cash or change fund, complete the request form for Establishing a Petty Cash or Change Fund and send it to University Cashiering for approval.

When requesting the establishment of international funds please contact University Cashiering prior to completing the forms.

The form requires the following information:

• Fund Title
• Amount requested. Petty cash funds can not exceed $500.00.
• Purpose of the fund (e.g., reason the fund is needed).
• Physical location of the fund: petty cash or change funds should be located on property owned or leased by the University.
• Plans for safeguarding the fund (e.g., locked in safe, etc.).
• Cost object: departmental code for fund
• Fiduciary of the fund: name, job title, and e-mail address of the person having overall responsibility for the fund.
• Custodian of the fund: name, job title, and e-mail address of the person in whose custody the cash will be kept. This cannot be the same person as the Fiduciary of the fund.
• A Department Head, Director, or Business Manager must approve the form, acknowledging the Fiduciary and Custodian. In some cases the Fiduciary & Department Head etc. will be one and the same.

Once the fund is approved by University Cashiering, a vendor number will be established for the fund and an e-mail notification will be sent to the Fiduciary, Custodian, and Department Head, Director or Business Manager. The approved cash will be issued to the Custodian upon presenting a valid Duke ID at the University Cashier's office.

III. Procedures for Handling Petty Cash & Change Funds

The following procedures must be followed for each fund. The fiduciary of the fund is responsible for ensuring that these procedures are followed. Non-compliance with these procedures will result in immediate dissolution of the fund.

• Only one person, the Custodian, should have physical custody of the fund. This person should not have responsibility for accounting records.
• The Fiduciary of the fund should establish an alternate Custodian who will be responsible for physical custody of the fund when the Custodian is absent.
• A maximum single disbursement amount is to be established for the fund. The Fiduciary of the fund must approve any disbursements over the maximum amount. The Fiduciary should document the approval of any disbursements over the maximum disbursement amount.
• When making disbursements from the fund, the custodian must obtain from the recipient an official receipt, listing the amount and code to be charged.  Official receipts can be an invoice, an automated receipt, or supporting documentation that is computer generated. Hand written or manual receipts for the purchase of goods will not be accepted.
• The fund is not to be used to cash personal checks for employees or students.
• The fund is not to be used to pay individuals for work performed or services rendered.
• The fund is not to be used for any type of loan to any person.
• Expenses that are not within the scope of the fund's purpose may not be paid from the fund.
• The cash and receipts must be maintained under lock and key in the physical location noted in the Establishing a Petty Cash or Change Fund request form.
• The Custodian should count and balance the fund each day it is used, with a minimum of one count and balance performed monthly. Documented reconciliations should be kept in the department. At all times the expenditure receipts plus cash on hand must equal the authorized amount. Any discrepancies identified, should be investigated and adjusted promptly.
• The fund should be reimbursed to its original authorized amount at least once each fiscal month. See Section IV REIMBURSEMENT OF A PETTY CASH FUND for more details.
• Revenues should never be used to establish or increase the size of a petty cash or change fund. Deposit all income and gifts through the University Cashier's Office or other appropriate office (refer to GAP 200.025, Procedures for Handling Cash and Check for Deposit).
• The fiduciary should physically count the fund at least quarterly to determine that the above procedures are being followed; the amount of the fund is adequate but not excessive; and the need for the fund continues to exist. The Fiduciary should document this quarterly review and maintain the documentation in the department.
• Duke Police must be notified of any thefts or misappropriation of a fund.

Each fiscal year, University Cashiering verifies each petty cash and change fund's balance. A memo is sent to each Fiduciary, Custodian and Department head for their review and verification of account balances.

All petty cash and change funds are subject to surprise audits of balances and procedures by the Controller’s Division.

Petty cash and change funds which have been inactive for two (2) years will be closed.

IV. Reimbursement of a Petty Cash Fund

The fund should be reimbursed to its original authorized amount at least once each fiscal month. To ensure all reimbursed expenses are properly recorded in the proper fiscal year, all funds MUST be reimbursed by the last week of June (the end of the fiscal year).

To reimburse the fund:

• Complete an Electronic Accounts Payable Check Request via the Duke@Work portal to document the payments made and to clear the funds advanced. Attach scanned copies of all original receipts and supporting documents.
• Charge each expense for which there is a supporting document to the appropriate cost object and G/L Account.
• Make sure the completed Electronic Accounts Payable Check Request is routed to and approved by both the custodian and the fiduciary of the fund. Both are attesting that supporting documentation is accurate and represents cash payments made. Important:  The Fiduciary assigned to the Cash Fund must approve the Electronic Accounts Payable Check Request. This documentation must account for all funds disbursed.
• Submit the properly completed Electronic Accounts Payable Check Request and supporting documents to Accounts Payable.

The Custodian will be notified by e-mail when the cash is available for pickup. Either the custodian or the fiduciary will need to present a valid Duke ID to pick up the funds.

V. Losses and Thefts

All differences in the fund should be reported immediately to the Fiduciary and University Cashiering. 

• In the event of a theft, a police report must be completed.
• In the event of a loss of funds, a memo must be written to explain the circumstances surrounding the loss.  The Custodian and Fiduciary must sign the memo. 
• Complete an Electronic Accounts Payable Check Request via the Duke@Work portal to document the loss and replenish the fund.
• Attach a scanned copy of the original police report or loss memo to the check request.
• Charge any shortages and thefts to the department’s operating cost center using G/L Account 695600 (Losses, Damages, and Write-offs).
• Supply a copy of the police report or loss memo to University Cashiering.

VI. Changing or Closing a Petty Cash or Change Fund

University Cashiering is responsible for approving any changes to petty cash and change funds and for maintaining records of each fund and its custodian.

• To decrease the amount of a petty cash or change fund, complete an Authorization to Increase/Decrease Petty Cash or Change Fund form; submit to University Cashiering. Deposit cash in the amount of the decrease at the University Cashier's Office to fund 1001000, using the G/L Account 119000 for petty cash fund and G/L 119100 for a change fund, make sure to include the title of your fund on the deposit slip.
• To request an increase to the amount of a petty cash or change fund, complete an Authorization to Increase/Decrease a Petty Cash or Change Fund form, submit to University Cashiering for approval. If the increase is approved, cash will be issued to the Custodian upon presenting a valid Duke ID at the University Cashier's office.
• Any change in Fiduciary, Custodian, or location of the fund must be communicated. Complete a Change of the Fiduciary, Custodian or Location of a Petty Cash or Change Fund form; submit to University Cashiering. When the Fiduciary or Custodian of a Petty Cash or Change fund changes, the fund should be reimbursed to its original amount; any overages/shortages should be investigated and charged to 695600.
• To close a petty cash or change fund .
  • If the petty cash fund is not at the authorized amount, reimburse the fund to its original authorized amount. Complete an Accounts Payable Check Request; refer to section IV for instructions on completing this form.
  • Deposit the total amount of the fund at the University Cashier’s Office to fund 1001000, using G/L account 119000 for a petty cash fund and G/L account 119100 for a change fund.
  • Send a memo to University Cashiering with the following information:
    • Departmental Receipt Number from deposit slip
    • Date of Deposit
    • Amount of Deposit
    • Petty Cash Fund number
    • Fund Title

Please contact University Cashiering, 919-684-4773, if you have any questions pertaining to petty cash and change funds, the procedures outlined in this GAP, or need assistance.