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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 proper use and safe keeping 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 from any other funds.

The custodian must notify University Bursar Cashier Operations immediately when rescinding custodian responsibilities or when the custodian's office address changes.


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
    • Vendor payments or late fees

The above prohibited items are not a complete list - only a guideline. Contact University Bursar Cashier Operations to seek further guidance.

The University of Illinois System has a governmental exemption from sales and use taxes on purchases for system use. When making purchases on behalf of the system, present suppliers with the system'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 University Bursar Petty Cash & Change Funds website.
  6. Renew each fund annually by July 1.
  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
University Bursar Petty Cash & Change Funds
Petty Cash Fund Training
University Bursar office locations and hours:

Last Updated: June 18, 2020 | Approved: Senior Associate Vice President for Business and Finance | Effective: February 2008

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