Approved by President
Effective Date: June 5, 2017
Responsible Division: Business and Finance
Responsible Office:  Business and Finance
Responsible Officer:  Associate Vice President, Business and Finance

I. Purpose

This policy establishes procedures for justification and authorization of the advancement of petty cash funds to Middle Tennessee State University (MTSU or University) department or budgetary heads. The policy further establishes procedures for the proper use and care of those funds.

When the nature of certain departmental operations requires a change fund or a disbursement fund for purchases of minor, low cost items, the Vice President for Business and Finance will, upon proper justification and completion of the Petty Cash Authorization Form, authorize the Office of Business and Finance to advance the department or budgetary head a petty cash fund, which will be maintained on a custodial basis. Such advances are not chargeable to the department’s operating account when issued but are reflected on MTSU's accounting records as an advance to the Department Chair/Director or budgetary head who is accountable for proper fiscal and physical control of the fund.

II. Proper Custody and Control of Petty Cash Funds

The custody and control of petty cash funds may be delegated to appropriate personnel; however, accountability and responsibility for proper use and care of the funds remain with the designated Department Chair/Director or budgetary head.

A.  Facilities for safekeeping, commensurate with the size of the fund, must be available.

B.  Petty cash funds, other than advances used in making change, must be kept separated from all other funds, including personal funds, and not co-mingled therewith. Separate funds should be requested if a change fund and disbursement fund are warranted.

C.  Petty cash funds are subject to audit and should be frequently balanced to ensure that the cash plus paid receipts on hand equal the established amount of the fund. A Petty Cash Fund Reconciliation must be submitted by the Department Chair/Director or budgetary head when a request for reimbursement is submitted.

D.  A Petty Cash Fund Reconciliation form should be prepared periodically and each time a Petty Cash Reimbursement Request is made. This form should be reviewed and signed by the Department Chair or budgetary head.

E.  Bank accounts cannot be opened for petty cash funds without prior approval of the President and the Board of Trustees (Board).

F.  Petty cash funds will be verified in writing by both parties, custodian and Department Chair/Director, when responsibility and custody of the fund are changed.

III. Limitations on Use of Petty Cash Funds

A.  Supplies and materials which are available from the Bookstore may not be purchased through the petty cash account except in emergency situations. If such purchases are necessary, an explanation must be attached to the voucher.

B.  Petty cash can be used only when the purchase from one (1) vendor is less than