Revised: 08/19/2021
All petty cash accounts authorized by OBM operate using the Imprest system. This provides that the account is established at a fixed amount. Purchases made from the account are documented with receipts and used to replenish the account back to the fixed amount. The familiar term, petty cash account, is used when referring to these accounts authorized by OBM regardless of the size or purpose of the account.
Petty Cash General Use accounts enable agencies to make small dollar (i.e. under $100) payments for some incidental expenses. This type of petty cash account eliminates the need to prepare a voucher and write a warrant for a small expense. General Use accounts also include Change Funds which are used only for providing change for conducting cash transactions. The Director of The Office of Budget and Management (OBM) may also specifically authorize a Petty Cash Special Use account for other purposes (for example, some agencies are authorized to use petty cash for investigation expenses or other situations due to security or confidentiality requirements). Special Use accounts have certain exceptions for spending and documentation determined on an as-needed basis.
Allowable expenses are paid from the petty cash account. At least once each fiscal year the petty cash account is replenished by voucher in order to record expenses during the current accounting period in OAKS FIN and to restore the account balance.
The Chief Fiscal Officer of an agency will submit a Biennial Petty Cash Certification form and will insure that Internal Controls are in place for the administration and safeguarding of these state assets.
Petty cash accounts are subject to audit at any time by OBM or other state entities with audit authority.
Upon identifying the need, the director or designee of a state agency appoints an agency petty cash coordinator and requests authorization to establish an account through OBM. If the request is granted, OBM will provide the agency with an OAKS FIN supplier ID to enable the petty cash account. OBM will also provide the agency with an OBM Account ID number. In most cases this will be the same as the Supplier ID. The agency will voucher the authorized amount to the supplier ID. The warrant will be used to establish a petty cash account. Agencies are permitted to maintain the account on a checking account and/or cash basis.
If an agency has multiple accounts they may assign separate petty cash custodians to each account. Agencies should consider assigning a back-up custodian for each petty cash account.
The agency Petty Cash Coordinator oversees the petty cash program for the agency. The Petty Cash Cordinator and/or Custodian is responsible for all petty cash account transactions and for proper accounting. The agency CFO is responsible for developing a petty cash policy with appropriate controls. It is not recommended that the Fiscal Officer be the custodian or alternate custodian of the petty cash account. Accurate and complete records must be kept up-to-date so that at any time a cash count is taken it, plus the checkbook balance (if applicable), receipts on hand, outstanding vouchers, uncashed replenishment warrants, and Advance of Petty Cash Funds Form reconciles to the amount authorized. A cash journal is set up to reflect all paid transactions in or out of the account.
Access to the petty cash account should be limited only to the custodian or alternate. When not in use, the funds should be secured in a locked location. Lost or stolen funds are replaced after a Highway Patrol, local authorities, or internal law enforcement investigation is conducted.
Allowable expenditures from petty cash accounts:
Purchases below $100 that are
Non-recurring expenses and
Expenditures that adhere to all purchasing guidelines.
In an emergency declared by the agency director, purchases of goods necessary to allow continued operation of an agency are also authorized.
Non-allowable expenditures from petty cash accounts:
Recurring expenses, such as utility and telephone payments (should be captured in OAKS FIN).
Items available from state term contract or state resources (OPI, CRP, OSS or OOD).
Payments between state agencies (should be processed on ISTVs).
Grievance settlement.
1099 reportable expenses (must be paid using the voucher method); this includes any services or non-material purchases.
Purchases exceeding $100.00 unless authorized by OBM in the initial request to establish the petty cash account or authorized as one-time exceptions.
Travel expenses except for parking and road tolls.
Gratuities.
The petty cash account is replenished by preparing a voucher in OAKS FIN. The backup documentation required for the voucher includes invoices or receipts . Replenishments can be done as frequently as needed to keep the petty cash operable. A minimum of one replenishment must be done each fiscal year.
Reports of the petty cash account are provided to OBM each fiscal quarter. This provides the amount of the account in each stage of processing in order to reconcile to the authorized amount. The Petty Cash Fund Quartlery Report (Form Number 7275) is used for this reporting. Additional documentation may be randomly requested. The agency petty cash coordinator submits the report when an agency has multiple accounts.
A regular deposit in OAKS FIN needs to be completed to close or reduce a petty cash account. A petty cash account is closed when the authorized amount has been deposited into the fund from which it was originally drawn in the Treasury.
Petty cash custodians and coordinators should notify the agency fiscal officer and OBM State Petty Cash Administrators when an actual or suspected irregularity occurs. In the event of a suspected or actual theft, an investigation report must be completed with the State Highway Patrol or other law enforcement authority and be submitted with the voucher to replace the amount of the loss.
| Click here to request updates to this topic. |
|