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IS-1806 Petty Cash Purchases (Policy)

Administration 

Release Date:  12/24/97 
Revision 1:  8/17/06
Revision 2:  7/30/07
Revision 3:  5/13/11

Policy

Governing Board Handbook Section VIII, Fiscal Management

Administrative Directive

Introduction

Petty Cash Funds are formally established through the Business Office to enable purchase of incidental goods and services by authorized personnel.

1. Petty Cash Accounts

1.1 Petty cash funds are established or revised by completing a Petty Cash/Change Fund Authorization Form requesting funds through the Business Office. Once the fund is established, the authorized person is referred to as the Petty Cash Custodian.

The petty cash funds are audited periodically to ensure appropriate use of funds and to verify balances.

1.2 Petty cash advances are requested through the custodian using a Petty Cash Voucher. If an emergency situation arises and an item must be purchased without a petty cash advance, it is up to the discretion of the control agent to approve reimbursement of the cash spent and is subject to all reimbursement requirements. Proof of purchase must be provided in the form of such things as the original cash receipt, paid receipt or invoice marked paid.

1.3 All reimbursements of Petty Cash Funds are requested through the petty cash custodian using a Petty Cash Voucher. Contact the accounting manager for additional information.

1.4 All petty cash funds must be kept in a secured place with access to the funds restricted.

1.5 Departments are encouraged to purchase from central stores, however, there are occasional situations when small items must be purchased locally using petty cash funds.

2. Replenish Petty Cash

2.1 All petty cash replenishment of Petty Cash Funds is requested through the Business Office and includes the completed petty cash voucher, documentation (receipts, invoice) and completed Purchase Requisition. Contact the accounting manager for additional information.

2.2 Complete the Purchase Requisition by entering the Petty Cash Custodian name, vendor number and telephone extension in the company name and address box. Check the campus box and enter the department. Enter the reimbursement commodity code S0300.

2.3 Sort and compute the sum of completed Petty Cash Advance/Release forms by cost account. List cost accounts and their related sums, enter the total reimbursement amount below the sums and obtain the control agent signature.

2.4 Send the completed Petty Cash forms and documentation to the Business Office for preaudit approval. Preaudit forwards the approved requisition to Accounts Payable and a check is cut and sent to the Petty Cash Custodian.

3. Limits on Spending

3.1 No one single item purchased with petty cash may exceed twenty-five dollars ($25.00).

3.2 The total purchase limit for petty cash may not exceed fifty dollars ($50.00).

3.3 Incremental purchasing (splitting one large purchase into several small purchases) is not allowed.

3.4 Reimbursement to the petty cash fund may be made for any type of allowable expenditure.

4Tax Liability

4.1 CNM is exempt from paying New Mexico Gross Receipts on purchases of items of personal property.

4.1.1 Employees using petty cash funds are responsible for providing tax exempt certificates to vendors who do not already have them.

4.1.2 These tax exempt certificates may be obtained from the Purchasing Department.

4.2 If an employee pays New Mexico Gross Receipts Tax on purchases for which CNM is exempt, the employee is responsible for the tax.

5. Unallowable Expenses

5.1 Unallowable expenses as listed in the Governing Board Handbook and include: alcoholic beverages, political contributions, contributions to not-for-profit organizations, personal expenses of any kind, personal gifts (except recognition activities, including purchase of awards to recognize retirement, service or meritorious performance by employees and students using GAA funds), activities whose primary purpose is entertainment, activities which have been or may be reimbursed under another College policy or from an external source, flowers for employees, students, board members or their families on such occasions as birth, death or serious illness and requests inadequately documented or not approved.

5.2 Purchases which have been artificially divided to qualify as small purchase are not allowable.

5.3 Networking hardware/software cannot be purchased with petty cash.

5.4 Promotional advertising cannot be paid out of the petty cash fund.

5.5 Rental or leases of equipment or buildings cannot be purchased.

5.6 Purchases not allowed under Petty Cash Purchases will be requisitioned in accordance with standard CNM purchasing Policies and Procedures.

5.7 All travel reimbursements must be submitted on a Travel Voucher.

6. Closing a Petty Cash Fund

6.1 Replenish the Petty Cash Fund, if necessary, to return the cash in the fund to the authorized fund amount.

6.2 The cash in the fund is then turned in, in person, to the CNM Cashier's Office for deposit, accompanied by a completed Termination of Petty Cash/Change Fund  Form.

 



Forms:

Support Materials:

IS-1808, Purchase Requisition

Reference Materials: