Establishing or Increasing the Petty Cash Account

Overview

To establish a Petty Cash Account, the first step is to request authorization for a Petty Cash Account from OBM State Accounting. See the diagram and steps below for the normal flow of this process.

Steps

Establishing or Increasing the Petty Cash Account

1. The requesting agency determines the purpose and amount needed for the account. The agency CFO selects a petty cash coordinator who oversees the petty cash program for the agency and an account custodian who operates the petty cash account and an account custodian are selected.
2. Internal Controls - Prior to requesting funds, the agency must establish written internal control procedures for their departments to follow. Petty Cash Funds must be reconciled on a regular basis to maintain fiscal responsibility. Agencies' standard best practice should be at a minimum:

   • Count cash regularly by someone other than the custodian.

   • Maintain a log with itemized transactions and running balance.

   • Reconcile the authorized amount and log.

3. Access the Petty Cash Account Request Form (Form Number 4500).
4. The requesting agency completes this form and sends it to  the obmpettycash@obm.ohio.gov mailbox (the "Send to" address on the form).
5. The OBM Deputy Director of State Accounting & Reporting, on behalf of the OBM Director, reviews and approves or denies the request and returns it to the requesting agency.
6. OBM Account ID Number – The approved Petty Cash Request form will include an OBM Account ID Number. This is to allow OBM to uniquely identify each petty cash account. This number is required on the Petty Cash Quarterly Report forms. This will be the same as the OAKS Supplier ID for the account.

Completing the Request Form

The Petty Cash Account Request form is used to establish the Petty Cash account in the OAKS FIN Supplier System. OBM will have the Supplier ID created for all approved requests before the form is returned to the requesting agency. Please see the following sample form keyed to the 8 areas discussed here:  

1. If the requesting agency wishes to assign a reference number to this document for their internal use, it should be entered in the AGY REQUEST NUMBER block. The OBM ACCOUNT ID NUMBER block should be left blank for OBM to complete.

2.  Information as labeled for each block should be entered by the requesting agency.

3. Check the box for either: “Establishing a new petty cash account” or  “Increase in an existing petty cash account”. If an increase, complete the spaces for the “Existing Authorized Amount before Request” and the “Existing OAKS Supplier ID."

4. For either a new or existing petty cash account, check the “General Use” or the “Special Use” box to indicate the intended use of the account.

   • Indicate whether any part of the petty cash account will be kept in a bank or credit union account by checking the “Yes” or “No” box.

   • Use the blank area of the form to explain: the need for the account (why other purchasing methods do not work, or is less efficient),

   • • what agency programs the account will be used to support,

     • any exceptions needed to the dollar limits per transaction or to the limits on allowable types of purchases explained in this guidance.

   • Special Use accounts are required to request these exceptions as well as exceptions for the types of documentation to be provided for replenishment.

5. On the form, under Name of Account, supply the name of the state agency on LINE 1 and the specific account name on LINE 2 (e.g., Watercraft District #2 Petty Cash Account)

6. Information as labeled for each block should be entered by the requesting agency. The address for the location of the account should be the physical location where the funds are kept. If the requesting agency prefers the warrants issued from OAKS to be sent to a different address, or by EFT, this can be indicated in the Remittance Information area. Note the need for the additional form if an EFT is to be established. An EFT is normally setup after the funds are received and a bank account is established.

7. Enter the amount to be vouchered. Do not enter an amount needed for future use with the intention of only doing a partial voucher now. For increases to an existing account, enter only the amount of the increase, not the total of the account after the increase.

8. This section will be completed by OBM. The OAKS Supplier ID is a unique system-generated ID number. The new Supplier ID is included on the approved request form by OBM.

After Approval by OBM State Accounting

Memorandum of Understanding - Prior to vouchering for the establishment of the first petty cash account for an agency, a Memorandum of Understanding must be filed with OBM. The agency CFO and/or an agency petty cash coordinator manage the agency petty cash program. A petty cash custodian processes the petty cash transactions.

Prepare a Voucher

To establish or increase the Petty Cash Account, prepare a voucher for the full amount of the authorization using expense account "595057." Use of this account code determines the authorized amoutn of the petty cash account. Attach a copy of the approved Petty Cash Account Request form to the voucher. When the warrant is issued:

• The warrant can be cashed and all transactions done on a cash basis.
• OBM recommends that petty cash accounts over $300.00 be kept in a separate checking account at a local bank or federally insured credit union.
• The warrant can be deposited into a separate checking account at a local bank or federally insured credit union and a check written to keep a desired amount of cash on hand.
• The warrant can be deposited into a checking account and all transactions handled by writing checks to suppliers, etc.

Other Considerations

• Petty Cash Accounts in a checking account or in cash cannot be mingled with other moneys.
• Reconciliations of bank accounts must be conducted monthly by someone other than the custodian or alternate custodian: Request that the bank send statements to that person.
• The bank account must have a title to include "State of Ohio," as well as the name of the agency.
• Any interest earned must be paid to the GRF fund using a Petty Cash Account check unless otherwise directed by the Revised Code. This is done by using the OAKS FIN Regular Deposit/Direct Journal method specifying the revenue account code "456001."
• Do not deduct bank service charges from interest earned. Service charges are a reimbursable expense. Use the bank statement as a receipt for the expense.