Petty Cash (BF-9, Rev. 1)C ITY O F DELRA Y BEA C H
A DM IN ISTRA TIV E PO LIC IES AND PRO C EDURES
DEPARTMENT:
SUBJECT:
REVISION:
APPROVED BY:
PURPOSE
Finance
Petty Cash
POLICY NUMBER:BF-9
SUPERSEDES:BF-9,Rev.O
(August 16,
2010)
EFFECTIVE DATE:
Terrence R.Moore,ICMA-CI ,Cit Manager
The purpose of a petty cash fund is to allow for the reimbursement of minor business related expenses,
not in excess of one hundred dollars ($100.00),where it is impractical to be billed or to have a check issued
beforehand.These expenses must meet the legal requirements of the City of Delray Beach and may not
be used to circumvent current purchasing procedures.
POLICY
BF-9.1 Policy;
The Petty Cash Fund Policy has been created to provide guidelines for the appropriate establishment,use,
and accountability of such funds.
BF-9.2 Definitions;
C ustodian:A designated full-time employee who is responsible for the safekeeping and reconciliation of
a petty cash fund,as well as assuring compliance to City policy for all reimbursements and payments made
from the fund.
Petty C ash R eim b ursab le Expense:Necessary and reasonable small business transactions,not to
exceed $100,including emergency purchases of office supplies,local carfare,parking and tolls.In the
Special Investigation Fund,there may be instances where the $100 limit is exceeded to aid in undercover
operations,but in no instance,will the amount exceed $1,000.
BF-9.3 Types of Petty Cash Funds:;
1.Im p rest Fund :a petty cash fund that remains constant,containing cash or satisfactory
evidence of disbursement (paid receipts)equal to the amount of the fund.This fund is utilized
for small dollar purchases only.
2.C han g e Fund (Cash D raw er):a petty cash fund used for a cashier's change-making
operations.
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3.Investigative Fund (under $10,000):a petty cash fund used specifically by the Police
Department in support of select investigative units (vice,narcotics and organized crime
control divisions)to aid in furthering criminal investigations.See Administrative Policy BF-15
for further details concerning "Flash Money"and Investigative Funds over $10,000.
BF-9.4 Roles and Responsibilities:
Finance Department:Responsible for the establishment,oversight,and administration of petty cash
funds.
Accounts Payable:Responsible for providing appropriate replenishment of all City of Delray Beach petty
cash funds.Wh en a department's fund is reduced to a balance that cannot support approximately 5-7
business days of activity,the custodian should submit the proper documentation (see 1.11 Replenishing a
Petty Cash Fund)to Accounts Payable..Accounts Payable will review the submitted documentation to
ensure compliance with City policy.Once the review is completed,a check will be prepared for fund
replenishment.The check is made payable to the custodian "name of the custodian".The check must be
cashed at the City's primary banking institution.
Petty Cash Fund Custodians:Responsible for the following:
1.Perform regular (at least quarterly)reconciliations of the fund and maintain adequate control
over the funds
2.Provide adequate precautions for the safekeeping of the fund under their control
3.Request appropriate replenishment of the fund
4.Close the fund immediately if the purpose for which it was established ends or changes
significantly
5.Provide updated custodian information to the Finance Department
Alternate Petty Cash Fund Custodians:Assumes Custodians responsibilities listed above as necessary
in the absence of the custodian.
BF-9.5 Establishing Petty Cash Funds;
Any department that wishes to establish a petty cash fund must demonstrate a true business need.A letter
of explanation,approved by the department head,must be submitted to the City Manager to establish a
Petty Cash Fund.The letter of explanation should include:
1.The reason for the fund
2.The desired dollar amount of the fund
3.The name and title of the individual who will act as the fund custodian
4.A description of how and where the funds will be secured
5.Approval by the Department Head
Petty cash funds approved to be used as Imprest or Special Investigation Funds should be reimbursed at
reasonably frequent intervals throughout the fiscal year.At a minimum,the funds should be reimbursed
quarterly and in any event by September 30th of each fiscal year.
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BF-9,6 Receipt of Petty Cash Funds;
Both the Petty Cash custodian and alternate custodian will be required to sign a "Receipt of Petty Cash
Fund"(Exhibit I)memorandum acknowledging the amount of the Department's Petty Cash Fund and the
date of receipt.Any changes occurring in the custodianship or alternate custodianship will require that a
new "Receipt of Petty Cash Fund"memorandum be completed.
A copy of all "Receipt of Petty Cash Fund"memorandums should be maintained in each
Department and the original copy forwarded to the Finance Department whenever a permanent change in
custodianship or alternate custodianship occurs.
BF-9.7 Increasing Petty Cash Funds;
An increase to a petty cash fund requires a written request to the City Manager through the Finance
Director/CFO stating the reason for the increase.After receiving the City Manager's approval,send a check
request to Accounts Payable.Under "Description of Services"print or type the statement,"To increase
Petty Cash Fund from$_to$_".Attach the approval letter from the City Manager.
BF-9.8 Closing a Petty Cash Fund;
The custodian of a Petty Cash Fund must close the fund immediately if the purpose for which the fund was
established ends or changes significantly.
Upon completion of the custodian's employment with the City,the fund must either be closed or a new
custodian appointed.The custodian must complete the "Petty Cash Payment Approval"form and submit a
full reconciliation of funds prior to leaving.
To close an existing Petty Cash Fund,deposit any remaining cash in the fund via a "Miscellaneous Cash
Receipt Slip (MCR)";send a memo along with the validated MCR and reconciliation with any petty cash
receipts (originals);forward all to the Finance Department.The Finance Department will ensure the petty
cash GL account balance decreases to zero.
BF-9.9 Disbursements from the Petty Cash Fund;
Disbursements from the Petty Cash Fund may be in the form of an "Advance"for future use or a
reimbursement of a business related purchase made from personal resources.Only a city employee may
request an advance or reimbursement from petty cash funds.
For each request,the employee must complete,sign and submit,to the petty cash custodian,a completed
"Petty Cash Record"form (Exhibit Ill).
The completed "Petty Cash Record"form will include:
1.A Valid expense or account code
2.Dollar amount (not to exceed $100)
3.Department Name
4.Date of request
5.Description of the item purchased or to be purchased,including a valid business reason
a.Meals;for business inside/outside the office,document the business purpose of the meeting
or event and list those in attendance.
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b.Transportation;include origin and destination (MapQuest mapping
preferred).
c.Business Meeting;supported by a copy of the meeting notice or agenda.
d.Supplies:with justification of need for purchase
6.Signature of the person who received merchandise/money
7.Signature of the Supervisor
8.Signature of the Department Head or designee approving the reimbursement
9.Attached original receipt(s)and documentation
Advances:Immediately after the employee completes the purchase,they must submit an original receipt
to the Petty Cash Custodian.The custodian reconciles the transaction,accepting either change back from
the employee or reimbursing the employee the additional funds due.The custodian adjusts the "Petty
Cash Record"form to reflect the reconciliation.
Under no circumstance may an individual,including the custodian,approve his or her
own Petty Cash form.It is the responsibility of the custodian to ensure that each voucher is complete,
accurate,and accompanied by original documentation.
Emergency Petty Cash Funds:At the time a hurricane is im m inent,departments may make a request
to the City Manager,through Finance,to increase petty cash funds for emergency (hurricane related)
operating purchases.The request should be reasonable (not to exceed $5,000).Once approval is received
from the City Manager,Finance's Accounts Payable will prepare a check request (payable to Petty Cash
Custodian "department's custodian name")for the approved increase amount.At the close of hurricane
season,any unused emergency funds must be returned to Finance accompanied by a signed
"Miscellaneous Cash Receipt Slip"(MCR).Finance will provide the appropriate petty cash account number
to record receipt of the unused funds and ensure the balance in the GL account returns to its original
amount.A full reconciliation should also accompany the return/unused funds.
Special circumstances:Petty cash disbursements greater than $100 require the prior approval of the
Director of Finance/CFO.
B F-9.10 Pro hi bi ted Petty C as h Expend itu res;
1.Gratuities
2.Donations
3.Splitting purchases to cover expenditures over the $100.00 maximum
4.Employees should not pay sales tax on ANY City purchases.The city is exempt by the state
from paying sales tax on purchases.(Florida State Statues 212.08
(6)-Sales Tax Exemptions).It is therefore recommended that city employees have and maintain a valid
copy of the City's Florida Department of Revenue -Certificate of Exemption "DR-14"when conducting city
business transactions.
Note:Special circumstance where it is impracticable for the Special Investigation Departments to
submit the Certificate of Exemption (i.e.purchasing meals for detainees/informants)warrants tax
as an allowable expenditure.
5.Multi-day travel expense reimbursements shall be made through the payroll reimbursement
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process and shall not be paid from petty cash.
6.Professional services:for example,dry cleaning,clothing alterations (including embroidery,
silk screening,etc.},printing,car washing or detailing,service and repair calls.These
payments should be made through either the requisition/purchase order process,submittal
of a request for check,or the city purchasing card.
BF-9.11.Replenishing a Petty Cash Fund;
Wh en the fund is low,the custodian should perform a fund reconciliation and complete a "Petty Cash
Payment Approval"form (Exhibit II)to replenish the Petty Cash Fund.This form is to be approved by the
Department Head and forwarded to Accounts Payable along with the prOe!documentation (see below).
This approval certifies funding is available and completeness of documentation and accuracy of
accounting.The custodian should total the individual categories of expenses and assign each amount to
an appropriate account number and document accordingly.The custodian must keep copies of original
documentation for their own departmental files.
Proper Documentation:A completed Petty Cash Record Form (Exhibit Ill)for each expense with:
1.Valid expense code
2.Appropriate signatures
3.Original receipt of purchase attached
BF-9.12 Reconciliation:
The custodian must reconcile Imprest and Special Investigation Petty Cash Funds on a regular basis,
monthly if the Fund is active,but no less frequently than quarterly.The reconciliation ensures that the sum
of the outstanding reimbursements plus cash on hand is equal to the original amount of the Fund.Any/all
overages/shortages must be reported immediately to the department head.
Custodian must reconcile a Change Fund (Cash Drawer)petty cash fund on a daily basis during the close
out process when in use.
Petty Cash Funds must be reconciled and replenished at fiscal year end,September
30th,to assure expenses are captured in the appropriate accounting year.The Petty Cash Payment
Approval form and documentation for year-end shall be submitted to Accounts Payable no later than
September 20"to ensure ample time for processing.
BF-9.13 Discrepancies:
Recurring discrepancies of any amount or a single discrepancy of ten dollar ($10.00)or more should be
reported to the department head and Director of Finance/CFO.If theft is suspected,the Police Department
must also be notified.
BF-9.14 Audit;
The Finance Department's Accountant Staff will monitor all Petty Cash Funds,inactive petty cash funds
are subject to investigation and closure,if warranted.Furthermore,the Accountant Staff will conduct
periodic audits of each department's petty cash fund to include;counting cash on hand and reconciliation
of funds.Departments may also request an audit by Finance when there is a change in custodians or
alternates,if overages or shortages are greater than $10.00,or at the suspicion of theft.After completion
Petty Cash
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of the audit,the Finance Department will issue an Audit Finding letter within
30 days to the petty cash custodian and the Department Head detailing any discrepancies found and
recommendations for improvements.
BF-9.15 Security:
It will be the custodians'responsibility to provide adequate precautions for the safekeeping of the funds
under their control.All petty cash funds must be stored in a secured device such as a safe or cash box in
a locked cabinet or drawer.Only the Petty Cash Fund custodian and the department head should have
keys to the box and cabinet or combination to a safe containing petty cash.
Funds should never be left unattended and unsecured.In the event funds are lost or stolen,the custodian
or department head must contact the Police Department and notify the Finance Director/CFO of the loss.
Any funds missing from petty cash will be charged to the responsible department and the custodian may
be subject to disciplinary action for any violations of this policy contributing to the loss of funds.
BF-9.16 Miscellaneous:
Petty Cash Forms:
Receipt of Petty Cash Fund (Exhibit I)System Access:P:\Finance\Forms
Filename:Custodian Receipt of Petty Cash.pdf
Petty Cash Payment Approval (Exhibit 11)
System Access:P:\Finance\Forms
Filename:PETTY CASH PAYMENT APPROVAL.docx
Petty Cash Record Form (Exhibit Ill)System Access:P:\Finance\Forms
Filename:PETTY CASH RECORD FORM.docx
Petty Cash
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RECEIPT OF:â–ˇPETTY CASH IMPREST FUNDâ–ˇCHANGE FUND
JPOLICE INVESTIGATION FUND
DTE;DEPARTMENT:-
DIVISION:_
I ACKNOWLEDGE RECEIPT OF THE ABOVE CASH FUND IN THE AMOUNT OF
$_
THIS RECEIPT VOIDS ALL OTHER PREVIOUS RECEIPTS.
Custodian Signature
Custodian Print Name
2"custodian Signature
2 Custodian Print Name
@"custodian Signature
4"Custodian Print Name
4"Alternate Custodian Signature
4"Alternate Custodian Print Name
3"°Alternate Custodian Signature
3""Alternate Custodian Print Name
5"Alternate Custodian Signature
5"Alternate Custodian Print Name
Petty Cash
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PETTY CASH PAYMENT APPROVAL
DEPARTMENT DATE SUBMITTED
ACCOUNT NUMBER AMOUNT
TOTAL
TOTAL PETTY CASH FUND
CASHON HAND
REIMBURSEMENT REQUESTED,PER ABOVE TOTAL
$_
$_
$_
$_
PETTY CASH CUSTODIAN SIGNATURE DATE _
DEPARTMENT HEAD SIGNATURE -)]l.
P:\Finance\Forms
Petty Cash
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PETTY CASH RECORD FORM
EXPENSE CODE:DOLLAR AMOUNT OF RECEIPT:$
DEPARTMENTDIE-
REASON FOR PURCHASE:_
DEPARTMENT EMPLOYEE WHO RECEIVED MERCHANDISE/MONEY
SUPERVISOR'S SIGNATURE DEPARTMENT HEAD'S SIGNATURE
ATTACH THE ORIGINAL RECEIPT FOR THE PURCHASE AND TAKE THIS PETTY CASH RECORD FORM TO
THE APPROPRIATE PETTY CASH FUND CUSTODIAN
P:\Finance\Forms