PETTY CASH AND CHANGE ACCOUNTS
Administrative Rule Adopted by Council
The purpose of this administrative rule is to establish minimum standards for petty cash and change accounts.
Authority for this administrative rule is established in the City Charter and City Code. This administrative rule has been approved by the City Council.
The Accounting Division of the Bureau of Finacial Services of the Office of Management and Finance (Accounting Division) will periodically monitor bureaus to assess compliance with the minimum standards of this rule. As instances of non-compliance are identified, bureaus will be required to develop and implement a corrective action plan. The Accounting Division will provide assistance to bureaus, if requested, to develop this plan. The Controller will report all instances of non-compliance annually to the Chief Financial Officer (CFO) and City Council.
"Petty Cash Account" means a cash fund or checking account set aside for the purpose of making incidental expenditures for which the issuance of a City of Portland check would be too expensive and time consuming.
"Change Account" means cash set aside for the purpose of making change in across-the-counter cash transactions at authorized locations and activities. The total amount in a change account is the authorized amount; any increase or decrease to this amount must be made by using the "Petty Cash and Change Accounts Request Form".
"Custodian" means the individual responsible for the safekeeping, disbursement and replenishment of petty cash accounts.
Establishing Petty Cash and Change Accounts
- The Chief Administrative Officer shall approve the creation of new petty cash and change accounts.
- For petty cash accounts of $1,000 or more, an imprest checking account may be allowed. The establishment of checking accounts must be done through the City Treasurer’s Office, with the account name: City of Portland, Bureau of (bureau name plus division or department name if appropriate).
- Requests for new accounts, changes to existing accounts, or account closures are to be made using the "Petty Cash and Change Accounts Request Form" and are required to be approved by the Chief Administrative Officer or authorized designee.
- Bureau staff should periodically re-evaluate the need for and size of each petty cash and change account with the goal of reducing the size of petty cash accounts and eliminating unnecessary accounts.
Petty Cash and Change Account Responsibilities
The bureau director or authorized designee should maintain on file a copy of the form designating the individual assigned as custodian of each petty cash or change account. A copy of this form should also be on file in the Accounting Division.
The petty cash custodian shall not be authorized to approve cash payments from the account or requests to replenish the account.
In instances where such segregation of duties is not possible, alternate compensating controls shall be arranged through the Accounting Division. Alternate compensating controls could include such procedures as review by supervisors, managers or other independent parties, verification by other staff, or reconciliation of the account by a person other than the custodian.
Unscheduled and intermittent spot checks of petty cash funds shall be made by the supervisor.
If there is a change in the custodian’s supervisor, prompt notice shall be given to the Accounting Division.
Security of Funds
Petty cash funds and checks shall be stored in a secure location.
Change accounts shall be secured. Receipts are to be deposited intact on a daily basis.
The custodian’s supervisor, bureau director and Accounting Division shall be notified within 24 hours if any of the following occurs: (1) material shortage; (2) theft is suspected; or (3) checks are missing.
Petty cash funds may be used for incidental items. The following items are examples of allowable expenditures. This list is not intended to be all-inclusive.
•Postage stamps and postage due expenses
•Hardware and repair supplies
•Copies and printing
•Film and film developing
•Notary commission fee
•Reimbursement of travel expenses less than $100, including local mileage and minor travel expenses, with receipts and an approved Training/Travel Authorization/Reimbursement form
•Other allowable City business expenses
Change funds are to be kept at the minimum level necessary to handle normal customer service needs. The amount of each change fund should be withheld at the close of each day from the total cash in the register or cash drawer for use the following day. The remaining cash is recorded as the current day’s receipts and is reconciled to the receipt documents.
The use of petty cash accounts is prohibited for the following types of payments:
•Payments to employees for salary or wages
•Payments to individuals that could be subject to IRS 1099 reporting requirements
•Personal use of any type
•Cashing of personal checks for employees or others
Individual purchases from petty cash accounts shall not exceed $100 unless approved in writing by the bureau director. Purchases shall not be divided in order to circumvent the $100 limit.
Petty cash checking accounts require two signatures on each check. Bureaus should authorize a minimum of three check signers to insure at least two signers will be available when needed.
All disbursements from petty cash accounts must be authorized and supported by receipts or other documentation.
Account Replenishment and Reconciliation
Periodically, petty cash accounts shall be replenished to bring the balance up to the authorized amount. The amount replenished shall be the sum of all petty cash disbursements since the previous reimbursement; any differences shall be reconciled.
All replenishments shall be made through Accounts Payable.
Petty cash accounts shall be counted and reconciled to the authorized amount at least once each accounting period, and when there is a change in custodian.
Checking accounts shall be reconciled to each monthly bank statement.
Upon reconciling, if the account shows minor overages or shortages, it shall be noted on the reconciliation, and it shall be reported to the supervisor immediately.
Petty cash and change accounts shall be reconciled as of June 30 each year to facilitate accurate year-end reporting. Reconciliation reports shall be forwarded to the Accounting Division for processing.
Account Reduction or Abolishment
When a petty cash account is reduced or abolished, funds shall be deposited and notice given to the City Treasurer’s Office. When checking accounts are closed, unused checks and deposit slips shall be sent to the City Treasurer’s office.
Resolution No. 36248, originally adopted by Council September 1, 2004.
Revised by Resolution No. 36435, adopted by Council September 6, 2006.