Petty Cash Funds
Responsible Office: University Controller
Effective January 1, 2012
REASON FOR POLICY
The New York University Petty Cash Policy is set forth to provide a process and guidance to those academic and administrative units who wish to maintain a petty cash fund and have sought the appropriate approval for that fund as outlined below.
WHO NEEDS TO KNOW THIS POLICY
Petty Cash Fund Custodians, Fiscal Officers and any one within the University who has a fiduciary responsibility for any part of the petty cash fund.
The purpose of petty cash funds is to provide cash sufficient to cover minor office expenditures, reimbursements to students, and payments to participants in research studies.
All employee reimbursements and advances must use the AP Work Flow process.
- NYU Business Expenses Policy
- NYU Expense Reimbursement Policy
- NYU Purchasing Policies and Procedures Manual
- Applicable NYU School and Department Policies
- Specific Sponsor Agency Guidelines
Direct any general questions about the University's Petty Cash Funds Policy to your academic or administrative Fiscal Officers.
If you have additional questions, relating to Petty Cash Funds, please contact:
Policy Clarification, Custodian Responsibilities, Establishing, Increasing, Reducing or Terminating a Petty cash Fund
Academic or Administrative unit representative in General & Restricted Accounting, Controller's Division
Loss or Theft of Petty cash Fund
Reimbursement of Petty Cash Expenses Charged to Sponsored Programs
Academic or administrative unit representative in Office of Sponsored Programs Accounting
Replenishing a Petty cash Fund
Office of the Bursar, 25 West 4th Street
All questions relating to School of Medicine Petty Cash funds should be directed to the NYULMC Controller's Office.
These definitions apply to these terms as they are used in this policy.
The individual granted the authority to review and approve (or reject) transactions that require the use of University funds. The signature of the “Approver” on the reimbursement or payment request form signifies that the “Approver” has verified the request for compliance to applicable University policies.
Costs of goods or services that foster or support the missions of the University.
The individual appointed to manage the petty cash fund, including “temporary” custodians designated in the absence of the individual named in the Request to Establish a Petty Cash Fund form.
Petty Cash Fund
A fund established for valid purchases of small value that are made outside of the regular purchasing cycle and system.
New York University
Petty cash funds are established and maintained by authorized academic or administrative units of the University for the purpose of providing cash sufficient to cover minor office expenditures, reimbursements to students, and payments to participants in research studies. All employee requests for reimbursement and advances must be submitted through AP Work Flow.
This policy provides the guidelines on establishing, managing, and terminating petty cash funds. It is intended to help faculty and staff to:
- understand the University’s rules on the use of petty cash funds;
- properly record and report transactions processed through petty cash funds; and,
- know the responsibilities of employees involved in the use and management of petty cash funds.
The Business Expenses Policy of the University should be consulted for guidance on which expenses are legitimate or valid and thus may be incurred using University funds. The University’s Purchasing Policies and Procedures Manual should also be consulted for guidance on how certain types of purchases may be made.
Individuals who request reimbursement from the petty cash fund are advised to check applicable policies issued by their school, department, or unit as they may be more restrictive than the University policy.
University Policies on Business Expenses, Purchasing, and Reimbursement
Any transaction that involves the use of University funds is subject to specific policies and requirements of both the University and the government (see the "Related Documents" section above). All individuals involved in any transaction related to petty cash funds are required to know those policies and understand the requirements that apply in particular to business expenses, purchasing, and expense reimbursement.
The Business Expenses Policy of the University should be consulted for guidance on which expenses are legitimate or valid and thus may be incurred using University funds. Individuals who use personal funds for expenses they will request the University to remunerate are advised to refer to the policy, before they incur any expenses, to avoid incurring costs that may not be reimbursed. Individuals who approve or process requests for reimbursement are required to know and understand the policy, to ensure that University funds are used appropriately and to assist compliance to applicable University and government requirements.
The University's Purchasing Policies and Procedures Manual should also be consulted for guidance on how certain types of purchases may be made. Certain expenses may be subject to specific procurement rules and requirements of the University and the government.
The Expense Reimbursement Policy should be referred to for guidance on how specific expenses are reported and reimbursed. Unless noted in this document as not required for transactions processed through the imprest petty cash fund, the guidelines detailed in the Expense Reimbursement Policy of the University apply.
Note: It is the responsibility of the Approver and the Fund Custodian to know, understand, and enforce this policy on petty cash funds and other University policies.
Purpose and Use of the Petty Cash Fund
The petty cash fund must be disbursed only for minor student expenses, not to exceed $150, that are valid and for which appropriate documentation is supplied. If a valid receipt in not available and the expense is less than $25, an explanation of the expense must be included on EXP2000P when receipts are submitted for replenishment of a petty cash fund.
Expenses that May Be Reimbursed from the Fund
Expenses that may be reimbursed from the petty cash fund include, but are not limited to, the following:
- Payments to Human Subjects, when the fund is set up for this purpose. All expenses must be allocated to account 65295 - "Payments to Human Subjects"
- Student related expenses such as taxi fare, parking fees, tolls not connected with University Travel. Reimbursement may not exceed $150.
- Meal allowance (normally provided when an “exempt” employee is required to work two or more hours over regular time; the rate at date of publication is $10. See the HR policies online for more information)
- Incidental office expenses
Expenses that May Not Be Reimbursed from the Fund
Expenses that must NOT be reimbursed from the petty cash fund include, but are not limited to:
- All employee travel advances and reimbursements must be processed through AP Workflow. Per diem allowances are not reimbursed through the petty cash fund.
- Expenses that do not comply with the Business Expenses Policy and Expense Reimbursement Policy of the University (e.g., personal expenses, any fraudulent and illegal expense, expenses that will be reimbursed from another source).
- Student related purchases in excess of $150 per order. Students have the alternative to complete the EXP2000S form for expenses up to $300. This form will be taken to the Office of the Bursar. The student must present a valid student id with the request.
The Petty Cash Fund may not be used to cash checks of any kind or to grant salary advances to University personnel.
Establishing a Petty Cash Fund
To establish a petty cash fund for an academic or administrative unit, do the following:
Both forms must be completed before documents will be reviewed.
Submit both forms in PDF to General and Restricted Accounting at the Controller’s Division.
The Custodian named on the form will be notified if the request has been approved. The Controller evaluates the purpose for which the fund is established, the appropriateness of the amount being requested, measures taken to safeguard the fund, etc.
Note: Only permanent employees of the University may be designated as Custodian or Alternate Custodian.
To obtain the cash for the fund, the Custodian must present both approved forms to the Office of the Bursar. The Office of the Bursar requires Fund Custodians to present a valid NYU identification card to process transactions.
- The Custodian is responsible for the security of the fund. He/She must ensure that the fund is kept in either a locked box stored in a locked cabinet or safe to which only he/she has access.
- The Custodian is responsible for the management and disbursement of the fund according to applicable policies of the University. He/She must apply the documentation and approval rules of the University that govern business expenses and expense reimbursement, and must keep adequate records substantiating disbursements he/she makes from the fund.
- The Custodian must keep a log of all petty cash transactions and use this log when reconciling and replenishing the fund.
- The Custodian must complete a reconciliation report and confirm possession of the fund to their Fiscal Officer each month. The report must be signed by both and be kept on file with the log; both report and log must be readily available for General and Restricted Accounting or Internal Audit review. General and Restricted Accounting and Internal Audit will perform unannounced examinations of the report, log, and fund at random.
- In case of minor discrepancies (or when receipts and cash on hand do not reconcile), the Custodian must inform the Fiscal Officer and General and Restricted Accounting. Inquiries from General and Restricted Accounting should be responded to in a timely fashion. Unresolved reconciling items will result in suspension of the fund.
Note: In case of major discrepancies, refer to Lost or Stolen Petty Cash Fund within this document.
Fiscal Officers Responsibility
Maintaining a Petty Cash Fund
The petty cash fund is the property of the University and must be used in accordance with its applicable policies. It must be under the control solely of the Custodian named on the request form or, in his/her absence, the Alternate Custodian also identified on the form. In the absence of both, any individual who assumes management of the fund on a temporary basis becomes the Fund Custodian. General and Restricted Accounting must be notified immediately, using the appropriate form (See Changing Fund Custodian), when the Custodian and Alternate Custodian are unable to fulfill their duties.
Non-Compliance with this policy will result in suspension of the Petty Cash Fund.
Due to the nature of minor expenditures reimbursed through the petty cash fund, the University does not require an Expense Reimbursement Form (EXP2000P) to be completed for every request submitted to the Fund Custodian. Form EXP2000P is necessary only when reimbursement request is submitted to the Office of the Bursar. Minor expenditures are reported together by the Fund Custodian on Form EXP2000P when replenishment needs to be processed through the Bursar. This form is reviewed by the Approver to verify that expenses paid from the petty cash fund are valid and permissible.
Increasing, Decreasing, or Terminating a Petty Cash Fund
A petty cash fund may be reduced, increased, or terminated at any time.
Increasing a Fund
To increase the amount of a petty cash fund, the Approver should complete both the EXP2000P and EXP2000Pa forms, indicating the “Z” number for the existing fund and the amount the fund is to increase.
Decreasing a Fund
To decrease the amount of the petty cash fund, the Approver must:
- Complete an EXP2000P form and take the form and the excess funding to the Bursar for deposit, including an explanation of why the fund is being decreased or closed to the Banking Window in the Office of the Bursar.
- Send a copy of the EXP2000P, a fund reconciliation, and proof of deposit to General and Restricted Accounting.
Terminating a Fund
When terminating a fund, the Custodian must ensure that the following are satisfied:
- outstanding requests are paid;
- receipts and cash on hand are reconciled;
- all logs and reconciliation records are on file in case of audit review;
- An EXP2000P form is completed and the funds are deposited with the Bursar.
- General and Restricted Accounting is notified in writing and provided with a copy of the final EXP2000P form, the final reconciliation form, and the record of the deposit (stamped copy of the “Transmittal for Funds to be Deposited”) made at the Bursar’s Office.
When a petty cash fund is inactive for six months, the fund will be suspended.
Changing the Custodian/Alternate Custodian
In case of the Custodian’s absence, the individual named as Alternate Custodian on the Request to Establish a Petty Cash Fund form should assume management of the fund. If either the Custodian or Alternate Custodian is no longer available to manage the petty cash fund a Petty Cash Fund Transfer of Custodial Responsibilities form must be completed and sent to General and Restricted Accounting.
Lost or Stolen Petty Cash Fund
In the event of theft or loss of the petty cash fund, the University’s Public Safety and Internal Audit departments must be immediately notified (General and Restricted Accounting will be notified by Internal Audit). An investigation will be conducted.
Reconciliation and Replenishment of the Fund
When the petty cash fund requires replenishment, the Custodian must:
- Reconcile the receipts of transactions paid from the fund with the cash on hand;
- Complete an Expense Reimbursement Form (EXP2000P) to report all expenses incurred and paid from the fund;
- Attach to the completed Form EXP2000P, all receipts and other documentation that were submitted with the requests for reimbursement. For those reimbursements where a receipt does not exist and the amount is under $25.00, include an explanation on the EXP2000P for that item.
- Submit to the Fiscal Officer for review and approval and;
- Take the approved Form EXP2000P with the attachments, in person, to the Office of the Bursar.
Every month, the Custodian must perform a reconciliation of the petty cash fund and provide a report to the Fiscal Officer for review and approval.