Accounting Services Section (ACT)

POLICY 16

Effective Date: 01/01/1999

Last Modified Date: 09/03/2003

Use of Funds

Petty Cash Funds are to be used for change funds or cash payment of minor items. Approval must be obtained from the University Controller before the Petty Cash Fund is used for other purposes.

Purchasing from University Storerooms

Supplies and materials that are available through the Storerooms, the Bookstore, or local merchant open orders may not be purchased from outside vendors through the Petty Cash Account except in emergency situations. If such purchases are necessary, an explanation must be attached to the voucher.

Separation and Use of Petty Cash

Petty cash funds used for minor purchases must be kept separate from all personal or departmental funds and not commingled. Loans and advances to employees for personal use or cashing of personal checks from Petty Cash Funds are forbidden. Payment to individuals for services is also inappropriate.

Justification and Approval

When the nature of certain operations requires a change fund or frequent cash expenditures for minor items, the University Controller will approve a Petty Cash Fund advance to the department or unit head. The fund will be maintained on a custodial basis. Advances are recorded on a general ledger account when issued and are reflected on the University's records as an advance to the department chairman or unit head who is accountable for proper fiscal and physical control of the fund.

Responsibility of Department Head

Safekeeping and Control of Funds

The custody and control of Petty Cash Funds may be delegated to appropriate personnel; however, accountability and responsibility for proper use and care of the funds remain with the designated department chairman or unit head.

Facilities for safekeeping, commensurate with the size of the fund, must be available. Where the size and use of the fund warrants it and with approval of the University Controller, all or portion of the Petty Cash Fund may be deposited in a separate bank account. Proper internal controls should be established to prevent misuse of funds and ensure accountability.

Escheat of Checks

If the Petty Cash Fund is deposited into a bank account, it becomes subject to the Escheat Statute of the State of North Carolina. That statute provides that uncashed checks are to be remitted to the State Treasurer's Office when the owner cannot be located and the custodial period has elapsed. If you have a petty cash bank account, you must comply with the provisions of the Escheat Statute. Call the State or Trust Funds Accounting Offices at 962-0036 for an explanation of the Statute and instruction for complying with its provisions.

Audit of Fund

Petty Cash Funds, other than advances used in making change, must be kept separate from all other funds. The Petty Cash Funds are subject to audit and should be frequently balanced to insure that the cash plus paid receipts on hand equal the amount of the fund.

Frequency of Reimbursement

The Petty Cash fund should be reimbursed when the cash is depleted to the extent requiring replenishment or at least once a month.

Overage, Shortage, or Theft

Overage, shortages, or theft must be handled on an individual basis. Generally, petty cash funds that have been stolen do not meet the minimum amount necessary on which to base an insurance claim.

Call Accounting Services for instructions in the event of overage, shortage, or theft.

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