Petty Cash Policies

Boston University highly encourages the use of the Terrier Marketplace to make supply purchases using the Shopping Cart process.  Other alternative methods of payment include the PCard and Travel Card. For more information about PCard and Travel Card uses and procedures, please visit Sourcing & Procurement.

This policy establishes the proper use and administration of petty cash funds.  When other disbursement methods cannot be used, petty cash funds can provide cash to departments to cover minor expenses such as taxi fares, postage and emergency office supplies.  Petty cash may also be used for human subject payments.  Other uses include establishment of a change fund for departments that collect cash receipts on behalf of the University and require change to appropriately complete the cash transactions.  The University requires each petty cash fund to have an approved Custodian, who documents expenditures, keeps receipts, and safeguards the funds.  Wherever possible, departments should use other disbursement methods instead of petty cash.

This policy provides guidance for the authorization, establishment and management of petty cash funds including appropriate uses, safeguards, documentation, replenishments and reviews.  This policy is intended to guide and assist Custodians with daily petty cash operations.

This policy applies to all Boston University schools, departments, administrative offices, petty cash fund Custodians, alternates, authorized signers and anyone within the University who has a responsibility for any part of the petty cash fund.

 Petty Cash Fund:  A supply of cash necessary to make immediate cash payments for the purchase of authorized business expenses.  A balance sheet account is created for the amount of the requested fund.  At least monthly (or more frequently if the petty cash fund is low), a replenishment request is prepared.  The account is then replenished for the exact amount of the receipts, charging the appropriate general ledger accounts.

Change Fund:  A specific amount of money placed in the custody of an individual for the purpose of making change while conducting University business.  The amount on hand should remain the same at all times; therefore, change funds do not require replenishment.

Custodian:  A regular employee of the University responsible for maintaining the security, accountability and replenishment of a petty cash/change fund.

Alternate:  An approved employee designated by the Custodian who is authorized to replenish petty cash reimbursements on behalf of the petty cash custodian.  Any exceptions to this rule must be approved in advance by Cashier Services.  Please contact Cashier Services for questions or guidance on Alternate designation.  The alternate does not have authorization to make any changes to the account.

Petty Cash Authorized Signer:  Must be a Dean, Director or Department Head and cannot be the Custodian of the fund.  An authorized signer may authorize petty cash transactions on behalf of the Custodian.

1. Designate a Petty Cash Fund Custodian.
   • Each fund must have an approved Custodian. New Custodians and changes of Custodians must be documented on a Petty Cash Action Form and approved by an authorized signer.
   • Custodians must be regular Boston University employees.

2. Understand Appropriate Uses of Petty Cash. Petty cash should be the mechanism of last resort to make payments, when other disbursement methods are impractical or cannot be used.  Petty cash should not be used as an operating fund.  Petty cash may be used to make cash payments to human subjects in accordance with the Human Subject Payment Policy.
   • Petty Cash Custodians – Please contact Cashier Services via our new Customer Service Portal.
   • Departments should evaluate their business needs and limit the petty cash account to the lowest amount that will meet those needs in a 30-day period. Boston University recommends that the balance should not exceed $500; petty cash funds used for human subject payments or other unique purposes may be higher depending on a department’s specific needs, subject to Cashier approval.

3. Establish the Petty Cash Fund
   • To establish a Petty Cash Fund, a designated Custodian must submit a Petty Cash Action Form signed by the Dean, Director or Department Head. The completed form may be sent to 25 Buick Street, Suite 130, or via our new Customer Service Portal.
   • Cashier Services will notify the Custodian when a decision is made regarding the establishment of a new fund.

To complete a Petty Cash Action Form, please use the following link: Petty Cash Fund Request

4. Maintain Safeguards
   • Keep petty cash funds and supporting documentation in a secure locked cash box at all times. The cash box must be kept in a locked desk, file cabinet or office for a second level of security.
   • Cashier Services strongly recommends the use of fireproof safes for departments with significant cash on hand.
   • The petty cash Custodian must be the only person with access to the cash box. Alternates can only be used for transporting replenishment’s to/from the bank or Cashier Services and should not have access to the cash box.
   • In the event of theft, BU Police should be notified by calling 617-353-2110.  Within 7 business days of the theft, the Petty Cash Fund Custodian must file a copy of the police report, along with any supporting documentation detailing the theft, to both the Manager of Cashier Services (cashier@bu.edu) and to Audit & Risk Services (intaudit@bu.edu).

5. Document Expenditures and Replenish Funds
   • The Custodian is responsible for maintaining:
     • Receipts for each transaction, which may be subject to review by Internal Audit.
     • A log for subject payments as described in the Human Subject Payment Policy, if subject payments are being paid.
     • Expenses booked on a reimbursement form must use specific GL accounts. Please download a copy of acceptable petty cash GL accounts, here
   • The Custodian is responsible for replenishing the account when a petty cash fund runs low. Replenishment with submission of receipts must be done at least monthly (more frequently if needed) to ensure that the expenses are recorded in the proper accounting period.  In addition, all funds should be replenished at fiscal year end so there are no outstanding receipts as of June 30^th.

6. Use of Petty Cash Funds Whenever possible, a Boston University PCard should be used instead of petty cash. For more information about PCard uses and procedures, please visit PCard Policies and Procedures. Examples of expenses that are reimbursable using petty cash funds:
   • Postage / Stamps
   • Emergency office supplies
   • Local transportation under $25
   • Human Subject Payments (Cash)
   • Tips

   For a complete list of petty cash expenses & appropriate GL Accounts to use, please visit this link, GL-Descriptions for Petty Cash.

   Examples of expenses that are not reimbursable through the petty cash fund:

   • Cashing checks
   • Contributions
   • Entertainment (personal)
   • Fines or penalties
   • Gift cards
   • Loans
   • Personal advances (IOU)
   • Personal items of any nature, including cell phone charges
   • Salaries and wages
   • Supplies or services that are normally secured through Sourcing
   • University Vehicle Maintenance

7. Conduct Regular Reviews. At least once per year, departments must reexamine whether the petty cash account is still required to meet the department’s business needs, or if alternative disbursement methods could be used. If there is a continued business need for petty cash, departments should limit the petty cash account to the lowest amount that will meet those needs in a 30-day period.
   

8. Detailed Operating Procedures – For step-by-step instructions on how to open, replenish, close, change the amount of a petty cash fund or change a Custodian, please select your work location below.
   • Charles River Campus
   • Medical Campus