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Business and Financial Policies and Procedures

10.5.2 Serve as a Petty Cash Fund Custodian

Policy Statement

The custodian of the Petty Cash Fund is responsible for the fund's safekeeping and proper use of the fund. The custodian is personally liable for cash losses and discrepancies in the Petty Cash Fund. Funds lost due to circumstances beyond the control of the custodian must be repaid from the unit's budget or other available operating funds.

If the custodian will be absent for a short period of time, the custodian may delegate authority to disburse funds to another staff member. However, the custodian remains responsible for the fund.

If the custodian will be absent for an extended period of time, a new custodian must be appointed using the Change Custodian and Petty Cash Fund Verification forms.

Petty Cash Funds are to be kept separate and should not be co-mingled with any other funds.

The custodian must notify University Student Financial Services and Cashier Operations (USFSCO) Cashier Office immediately when rescinding custodian responsibilities or when the custodian's office address changes.

Procedure

To serve as a Petty Cash Fund custodian:

  1. Comply with the following petty cash list of prohibited items and rules:
    • Professional membership dues
    • Professional development fees
    • Work uniforms (includes boots, shoes, etc.)
    • Food (includes food supplies and any meals, along with refreshments for meetings, alcohol, water, etc.)
    • Fuel
    • Coffee club
    • Labor costs
    • Gift cards
    • Personal services
    • Travel advance/expenses
    • Purchase items that will be on your biennial inventory
    • To cash personal checks
    • Cannot be used as change funds

The above prohibited items is not a complete list - only a guideline. Contact University Student Financial Services and Cashier Operations (USFSCO) Cashier Office to seek further guidance.

The University has a governmental exemption from sales and use taxes on purchases for University use. When making purchases on behalf of the University, present suppliers with the University's sales State of IL Sales Tax Exempt Letter to avoid paying sales tax on purchases.

  1. Local transportation charges may be authorized for reimbursement from petty cash.
  2. Limit single purchases to $100 or less per purchase and per vendor. Simultaneous purchases (stringing) may not be made to circumvent these limitations.
  3. Secure a receipt for each expenditure and have the person being reimbursed for the purchase sign the receipt:
    • If a vendor does not normally furnish receipts, or if a receipt is incomplete or lost, submit a documented note or letter explaining each missing receipt with purchase dates, amount, and description with buyer and custodian signatures.
  4. Someone other than the custodian must verify petty cash monthly in the presence of the custodian and maintain a file of all verifications.
  5. Reconcile petty cash quarterly online at the USFSCO Petty Cash & Change Funds website.
  6. Renew each fund by July 1 each year.
  7. Complete Petty Cash Training each fiscal year.

Forms Used in this Procedure

Change Custodian
Petty Cash Fund Verification
Quarterly Reconciliation
Close Fund
Annual Renewal

Related Policies and Procedures

10.5.1 Establish a Petty Cash Fund
10.5.6 Change the Amount of a Petty Cash Fund
10.5.7 Change the Custodian of a Petty Cash Fund
10.5.8 Close a Petty Cash Fund

Additional Resources

State of IL Sales Tax Exempt Letter
USFSCO Petty Cash & Change Funds
Petty Cash Fund Training
What to do if...
Campus USFSCO Office locations and hours:
   Urbana
   Chicago
   Springfield

Last Updated: March 10, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: February 2008

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