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Sample Petty Cash Voucher
Establishing a Petty Cash
Fund
Petty Cash Internal Controls
Checklist
Petty cash allows you to make small purchases or reimbursements,
in cash, for items such as stamps, office supplies, parking, etc.
The board or senior management should develop a policy of how much
money should be available in cash, and a maximum expenditure which
can be paid with petty cash. For example, you may establish a
petty cash fund of $100, and have a policy which says that
payments for items costing over $15 must be made by check rather
than reimbursed through petty cash. The fund should be enough to
cover petty cash expenditures for about a month. If it is too
small you will have to constantly replenish the funds, and if it
is too large it means you have cash on hand which could be more
safely kept in your bank account.
The petty cash fund should be kept in a locked box or drawer.
Auditors recommend that only one person, called the custodian,
have access to this cash, and that person be responsible for all
petty cash activity. To disburse petty cash funds, the
organization will need to buy or develop petty cash vouchers for
documenting each transaction, and determine who in the
organization can approve petty cash payments. In some cases, this
will be the director; in others, petty cash may also be approved
by department heads or the petty cash custodian, within guidelines
established by the board.
A Sample Petty Cash Voucher
Petty Cash Voucher Date: ________________ Amount: $
_________________
_______________________________________________ Dollars
For: ___________________________________________________
Account No: ____________________________________
Paid to: ________________________ Signed: ____________________
Approved by: _____________________________________
Establishing a Petty Cash Fund
Once the board has determined (with staff input) how large a fund
is needed, write a check to the petty cash custodian (not to cash)
to establish the petty cash fund. For example, if you have a $100
petty cash fund and Mary Robinson is the petty cash custodian,
write a check for $100, payable to Mary Robinson, Petty Cash
Custodian. Mary then cashes the check and places the monies in a
locked box or drawer.
To reimburse someone (in this example, Roberto Diaz) for a small
purchase, Mary should obtain proof of purchase from Roberto,
usually a receipt from the store, post office, etc. Roberto must
complete a petty cash voucher, detailing the nature and reason for
the purchase. After the voucher has been approved by the
appropriate person, Roberto is reimbursed for his expenditure. A
sample petty cash voucher is provided under Attachment 1. However,
most stationery stores sell pads of petty cash vouchers if you do
not want to design your own.
In some cases, the organization may permit an advance from petty
cash to cover an upcoming purchase. For example, if the office
manager is going to the post office to mail an overnight package,
he or she may be authorized to take $20 from the petty cash fund
with the stipulation that he or she return with a receipt and
change. In this case, the office manager completes a voucher for a
$20 advance, approved by a designated staff person. When the
office manager returns he or she completes an accurate voucher for
the final postage amount, attach the receipt, and return the
change to the custodian.
Once the fund is substantially depleted, the petty cash custodian
adds up the vouchers and assigns them into appropriate categories
(e.g., postage, printing and copying, office supplies, etc.) The
total of receipts plus cash available must equal $100 in order to
prove that all money has been accounted for. When the account has
been balanced, a check is written (in accordance with the check
authorization procedure established for all disbursements,) again
payable to the petty cash custodian, for the exact amount of the
vouchers/receipts, bringing the fund back to its original balance
of $100.
Therefore, in the example described above, Mary totals the
receipts in the petty cash box and determines that they fall into
the following categories:
Postage (4 receipts) $32.50
Printing/Copying (1 receipt) $11.50
Office supplies (2 receipts) $26.95
Total receipts $70.95
In addition, Mary confirms that there is $29.05 in cash remaining
in the petty cash box. A check for exactly $70.95 is written,
payable to Mary Robinson, Petty Cash Custodian, to bring the fund
back up to $100. This method of maintaining a constant amount in
petty cash through a combination of cash and receipts is called an
imprest system. The petty cash vouchers should be stapled to the
summary of expenses prepared by Mary and filed away so they are
not reimbursed a second time.
When entering this transaction into the accounting system you
increase postage, printing/copying and office supplies expenses,
and decrease cash:
Postage $32.50
Printing/Copying $11.50
Office supplies $26.95
Cash - checking $70.95
Notice that you do not post the expenses to an account called
petty cash. This way, at the end of the year, you have a true
picture of your expenses, which is more helpful for future
planning than a lump sum in a petty cash line.
Petty Cash Internal Controls
Checklist
The following questions reflect common internal accounting
controls related to petty cash. You may wish to use this list to
review your own internal accounting controls and determine which
areas require further action.
- Is an imprest petty cash fund maintained for payment of
small, incidental expenses?
- Is there a limit to the amount that can be reimbursed by
the petty cash fund?
- Is supporting documentation required for all petty cash
disbursements?
- Is a petty cash voucher filled out with supporting
documentation, name of person being reimbursed, and proper
authorization?
- Is access to petty cash limited to one person who is the
fund custodian?
- Are unannounced counts of petty cash made by someone within
the agency other than the fund custodian?
Return to the List of FAQs
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