Petty Cash Guidelines
If your department incurs minor purchases under $100 which are infrequent and nonrepetitive, it may be worth exploring with Treasury & Investing Services if a petty cash fund is right for you.
For employees who make frequent low-dollar value purchases for goods, services and travel-related expenses, TMU’s Purchasing Card (P-Card) is the recommended means of payment. Learn more about P-Cards by visiting the Purchasing Card page.
For faculty and staff reimbursements, iExpense is typically the recommended means of reimbursement. Learn more on the Faculty and Staff Reimbursement page.
Petty cash responsibilities
If you are in charge of managing your departmental petty cash fund, you hold complete responsibility for the fund, including any audit requirements that may arise.
Custodian: An individual responsible for the daily operation, management and security of the unit or department petty cash fund. This should be an employee with a long-term contract, and not someone in a short-term role.
Department head: An individual responsible for the unit or department and authorizes the:
- establishment of a departmental/cost centre petty cash fund
- reimbursement of claims from the petty cash fund
- closure of a departmental/cost centre petty cash fund
Authority: An individual authorized by the department head to approve petty cash expenditures.
- Securing cash
- Tracking and reconciling transactions
- Retaining supporting documentation for use of funds
- Coordinating replenishment of the fund
- Advising Treasury & Investing Services of updates to the custodian and authorities
- Requesting closure of a petty cash fund
- Preparing a quarterly summary of the petty cash balance
Financial Services responsibilities
- Reviewing, approving, setup and closure of petty cash funds
- Maintaining a list of custodians
- Answering related questions
Transferring petty cash fund responsibilities
To transfer responsibility for the petty cash fund’s day-to-day administration, your department head must verify that the fund is balanced prior to the transfer. Clear evidence, such as receipts, should also support this verification. All changes to the custodian and authority must be sent to Treasury & Investing Services as soon as possible, prior to the changes taking place, including approval by the department head.
Petty cash must be kept in a locked, secure place under the control of the custodian of the fund. Only the custodian should have access to the fund.
In case of loss, you must immediately notify TMU’s Community Safety and Security department at firstname.lastname@example.org or 416-979-5040. Details of the loss must be reported to Treasury & Investing Services.
Setting up a petty cash fund
All requests to open, close or increase/decrease a petty cash fund should be directed to Treasury & Investing Services, which will provide a Petty Cash Fund and Change Float Establishment Form. You are required to provide the following information via the form:
- Department name
- Cost centre
- Address and phone number where your petty cash fund will be held
- Information about the nature and frequency of the items to be purchased or used
- Amount requested (up to $200)
- Description of where and how funds will be secured
- Custodian information (name, position, contact)
- Information about individuals authorized to approve petty cash reimbursements and replenish the float on behalf of the department head (name, position, contact, specimen signature)
- Department head approval (name, position, signature)
To establish a float for your petty cash fund, you will be required to complete a Cheque Requisition Form.
All requests for petty cash funds must be approved by the Chief Financial Officer (CFO) or their designate.
Operating a petty cash fund
Petty cash may only be used for university business expenses and must meet every test applied to purchases made through the more formal process. It cannot be used for purposes such as personal loans or expenses, cashing cheques, salaries, wages, honoraria or business/entertainment meals.
When reimbursing expenses with petty cash, purchases must be supported by original receipts, showing the signature of the authority. For minor purchases that have no supporting documentation such as TTC fares or calling cards, department heads can authorize payment with a written statement to that effect. The fund must be reconciled on a monthly basis.
Petty cash is subject to audit. Internal Audit Services may do checks throughout the year to confirm that proper controls and procedures are being followed. In addition, on a quarterly basis, Treasury & Investing Services will reach out to confirm the balance of the fund.
Replenishing petty cash
Replenishing petty cash funds should be done before the funds have been used completely. Funds derived from other sources should not be added to the petty cash fund.
Replenishment requests must be submitted by the custodian via the financial information system (iExpense). The custodian of the petty cash fund must have access to the financial information system iExpense module. A new expense report must be processed for each replenishment. A payment will be issued to the custodian of the fund, who is responsible for transferring the funds to the petty cash fund.
Closing a petty cash fund
All requests to close a petty cash fund must be coordinated with Treasury & Investing Services via email and include approval by the department head.
Cash will need to be returned and deposited to the university bank account using the details provided by Treasury & Investing Services. The fund will need to be fully reconciled before your petty cash fund is officially closed.
Note: Please do not send cash through internal mail.
If you have any questions about petty cash setup and operations, please contact James Talbot, treasury specialist, at email@example.com or 416-979-5000 ext. 556992, or Anna Zsamboki, director treasury & investing services, at firstname.lastname@example.org or 416-979-5000 ext. 552344.