To receive funds in the form of a check, prepare an ISU Voucher indicating the department making the request, amount, purpose of the fund, custodian, and the location where the fund will be kept. The vendor name should be the name of the custodian. Indicate the date the fund will be repaid or provide a statement that the funds will be held indefinitely. If you are adding to an existing petty cash fund you can use the 907-XXXX number on the voucher. Otherwise, leave the fund account blank and Accounting will set up a 907 number for your department. Send the voucher to the Accounting Office. In certain situations involving sponsored projects, it may be appropriate to fund the advance using a 4XX-XXXX account.) Regardless of the fund account, the class code should be 915-00 to establish the petty cash fund.

To receive funds in cash at the Treasurer’s Office provide the same information above, but use a Debit Memo form rather than an ISU Voucher. On the Debit Memo form you do not need to fill in the blanks for Bank No., Trans Date, FEIN, IRS, Checked By or Approved By. The department head should sign at the bottom left, as on an ISU Voucher. You can specify on the Debit Memo form the denominations of currency or change that you would like to pick up. The Debit Memo must be approved by the Accounting Office before the cash is disbursed by the Treasurer’s Office. Debit Memo forms should be submitted to the Accounting Office at least 48 hours before the cash is needed.

Procedures for Replenishing Petty Cash Funds

1. It is expected that the trustee will replenish the fund as needed or at least every 30 days. Advances that are replenished on a less frequent basis may be deemed to be excessive and subject to being reduced or eliminated.
   
   
2. All four columns of the Petty Cash Voucher; (i.e., vendor, description, amount, and account number) are to be completed for every transaction disbursed from the fund. Adequate documentation supporting each disbursement is to be obtained by the trustee and submitted along with the petty cash voucher. In situations where the confidential nature of disbursements to research subjects is critical to the success of a research study, the trustee may summarize the disbursements on the voucher and retain the supporting documentation. This alternative does not eliminate the trustee's responsibility for properly documenting all disbursements from the fund.
   
   
3. The petty cash voucher is to be totaled and signed by the trustee and the department head. The total of the petty cash voucher plus the cash on hand or in a university checking account must equal the amount of the advance. Any discrepancy must be explained, and a request for a reimbursement of the shortage should be included on the petty cash voucher.
   
   
4. When replenishing the fund, the replenishment can be made either in cash or by check. For replenishment by check the trustee also must complete an ISU voucher made payable to the trustee. The voucher should be charged to the department’s expense account (or sponsored project account if appropriate) using a class code other than 915-00. The voucher (Accounting and Remittance copies) must be approved by the department head and submitted to the Accounting Office, along with the petty cash voucher and all supporting documentation.For replenishment in cash the trustee must complete a Debit Memo form rather than an ISU Voucher. Only one copy of the Debit Memo form is needed. The payee should be the trustee, and the documentation to be attached, signature approval and routing should be the same as for replenishment by check.
   
   
5. If the petty cash advance is to be terminated or reduced, a memo explaining the termination or reduction is to accompany the petty cash voucher. The trustee also must submit the balance of any cash on hand or in a university bank account. Because the advance is charged to a 907-XXXX (or 4XX-XXXX) and is not expensed to the department until a petty cash voucher is processed, it is not appropriate for a department to simply disburse all funds and not submit a petty cash voucher to document such disbursements. Any unsubstantiated expenditures will be charged to a departmental account.
   
   
6. To record a loss of petty cash funds by theft or mysterious disappearance, process the petty cash voucher and regular payment voucher (Accounting and Remittance copies), using class code 634-10. Attach verification of the loss from either the ISU Department of Public Safety or the Internal Audit office. See also Procedures for Reporting Cash Losses.
   
   
7. Any questions regarding the replenishment of petty cash funds should be directed to the Assistant Chief Accountant at 294-5181.

1. The Treasurer of the university will determine the financial institution where the checking account is to be established. The name of the account should be "Iowa State University--(Name of the Project)."
   
   
2. The Treasurer of the university must be included as one of the authorized signatures on the account.
   
   
3. The checks used to make disbursements from this account should have a maximum dollar amount printed on them which is reflective of the maximum payment to be made from the account. The Treasurer of the university can be contacted for guidance in this matter.
   
   
4. The funds deposited to this bank account are only available for the requested purpose, bank charges, and cost of checks. The use of these funds for any other purpose would have to be authorized in advance of the disbursement(s).
   
   
5. Replenishment of the petty cash funds deposited to this bank account should occur on a timely basis. The replenishment should follow the procedures identified in Procedures for Replenishing Petty Cash Funds. It is expected that a reconciliation will be submitted to Accounting on a monthly basis, consistent with the bank statement cycle.
   
   
6. When the need for the checking account no longer exists, the University Treasurer is to be notified of the intent to close the bank account. All unused checks should be turned over to the Treasurer, along with a current bank reconciliation. It will be the responsibility of the Trustee to formally close the account and appropriately transfer all funds remaining in the account.
   
   
7. Occasionally, a check may remain outstanding for an extended period of time. If it is expected that the check will not be cashed by the subject (outstanding at least 180 days), the amount of the check(s) should appear as a credit on the next petty cash voucher submitted by the custodian. The effect of the credit will be to reduce both the expense charged against the sponsored research account and the amount of the replenishment. When a check is written off in this manner, it must be added back to the checkbook balance and eliminated from the outstanding check total used in reconciling the bank account.
   
   
8. When a check must be reissued to a subject; (e.g., the original check was lost or possibly stolen), a stop payment notification must be communicated to the financial institution with whom the bank account is maintained. Such checks should not appear on any future replenishments of the account.
   
   
9. Any interest earned on the account should be identified as a credit on the next petty cash voucher submitted to replenish the account. If the advance was centrally funded, the credit should be recorded to the Treasurer's temporary investment account (950-10-01, class 056-50). If the funding source was federal, contact the Sponsored ProgramsContract and Grants Accounting Office for the appropriate account number to credit.
   
   
10. In order to provide adequate separation of duties, the bank reconciliations should be prepared monthly by someone other than the person writing the checks. A copy of the bank statement and the reconciliation should be submitted to Accounting. The custodian of the bank account is responsible for reconciling both the checkbook balance to the bank balance and the bank balance to the amount of the petty cash advance. These reconciliations should be done no later that ten working days after receipt of the statement. Should you require any assistance in establishing this process, please contact the Accounting Office at 4-5124.

1. Petty cash funds are not to be used for any purpose that would not be permissible in regard to regular requisition and payment processes. Also, it is not permissible for employee travel expenses to be reimbursed from petty cash advances. Such reimbursements must be processed on a university travel voucher. Payments for personal services; (e.g., payments to research subjects) are only permissible when approved at the time the fund is established.
   
   
2. The trustee is responsible for ensuring that such funds are physically secured or attended by an authorized person at all times.
   
   
3. The amount of cash on hand or in a university checking account plus the amount of documented but un-reimbursed disbursements must equal the amount of the advance at all times.
   
   
4. Petty cash/change funds are not to be commingled with other funds.
   
   
5. The trustee or any other departmental personnel are not permitted to write personal checks against such funds.
   
   
6. Departmental receipts are to be segregated from the fund and are to be deposited at the Treasurer's Office or to a university bank account within two days, or if less than $100, at least weekly. All checks are to be restrictively endorsed upon receipt, and checks drawn on foreign bank accounts are not to be accepted.
   
   
7. Petty cash/change funds are advanced from 907-XXXX (or 4XX-XXXX) funds, and a satisfactory accounting must occur before the funds can be terminated. Closing procedures are explained under the heading Procedures for Replenishing Petty Cash Funds. Trustees can contact Accounting (4-5181) for further information.
   
   
8. Trustees are to make funds and receipts available to state and internal auditors upon presentation of proper identification.
   
   
9. When preparing a final accounting for the spent petty cash funds, the trustee should prepare an ISU Voucher with the Petty Cash voucher and supporting documentation attached. The departmental (or 4XX-XXXX) account should be charged, with a credit going to the 907-XXXX (or 4XX-XXXX) account with a class code 915-00. The payee should be the trustee, with the voucher signed by the department head. The net amount of the voucher should be zero, so no check will be written.
   
   
10. When the unspent cash is being returned the trustee should prepare a Deposit Online depositing the funds into the 907-XXXX (or 4XX-XXXX) account from which the funds were advanced, using class code 91500-2.

This page was last updated on February 16, 2006.