Guidelines for Use & Maintenance of a Petty Cash Fund
Effective March 1, 2000
- Establishing a Petty Cash Fund
- Custody and control of the Petty Cash Fund
- Accounting for the Petty Cash Transactions
- Replenishing Petty Cash Funds
- Balancing Petty Cash Funds
- Change of Custodian
- Closing a Petty Cash Fund
- Confirmation of Petty Cash Funds
- Allowable Petty Cash Expenditures
- Expenses not allowed through Petty Cash Fund
Overview and policy
Bradley University has established on campus a limited number of petty cash funds for use by departments and cash handling areas. Petty cash funds enable departments to pay cash for minor business expenditures that could not easily be paid through normal University procurement practices.
The University uses an imprest system for petty cash. An imprest system requires that the cash periodically issued by the Controller's Office to replenish the fund agrees with the amount of disbursements from the fund. Consequently, an imprest petty cash fund remains at a fixed balance. At any point in time the balance of the fund consists of cash, coin and disbursement support (invoices/receipts). These items should always be equal to the predetermined amount to be maintained as the fund.
A petty cash fund should be small enough to require replenishment at least monthly, and large enough to require no more than three replenishments per month. Too large a petty cash fund encourages abuses such as unauthorized "borrowing" and payment for costly items that should be handled through issuance of checks. Too small a fund requires excessive work through frequent replenishment.