Petty Cash Procedures

The University of Alabama Petty Cash Program provides a flexible, limited-use payment option for small, immediate purchases when other methods (e.g., check or credit card) are not feasible.

1.0 Becoming a Custodian

To become a Petty Cash Custodian, an employee must:

1. Submit a completed Petty Cash Access Request Form to Accounts Payable.
2. Be a full-time faculty or staff member, approved by their Budgetary Approver.
3. Complete all required Petty Cash training within 90 days of submitting the request form:
   • Includes the online Petty Cash: System Overview and Introduction training.
   • Training notifications are sent upon form processing.
   • If training is not completed within 90 days, access will be revoked, and a new request form must be submitted.
4. Review and understand all relevant University policies, procedures, and guidelines.
5. Electronically sign the Petty Cash Custodian Agreement before receiving funds.
6. Once approved, a Petty Cash address will be assigned in Banner, enabling requests.

2.0 Roles and Responsibilities

Custodian

Custodians must be full-time employees and are responsible for making purchases on behalf of the University. Their responsibilities include:

• Using Petty Cash only for University-related purchases.
• Keeping funds secure at all times.
• Submitting MDVs with itemized receipts promptly to ensure timely review and processing.
• Ensuring all transactions are submitted, approved, and received by Procurement Services by the due date.
• Reporting lost or stolen funds immediately to their Budgetary Approver and Accounts Payable.
• Notifying Accounts Payable upon termination or departmental transfer and returning all outstanding funds and documentation.
• Ensuring compliance with all applicable University, state, and federal policies. Misuse of funds may result in re-training, suspension, termination of employment, or legal action.
• Supporting the department’s internal control environment for Petty Cash, including auditing, reconciliation, recordkeeping, and supervision, in alignment with University policy. Departments must establish an internal policy, if one does not exist. Departmental policies may be more restrictive than University policy, but never less.

Accounts Payable

Accounts Payable is responsible for:

1. Reviewing and processing Petty Cash requests.
2. Interpreting policies and auditing transactions for compliance.
3. Replenishing funds and maintaining internal controls.
4. Providing training materials and updates to Custodians.

For questions, contact Contract and Grant Accounting at cgaccounting@ua.edu.

3.0 Contract and Grant Purchases

Petty Cash may be used for contract or grant purchases, but planning is essential. While the Custodian has purchasing authority, the Principal Investigator (PI) or their designee must approve charges.

Key Guidelines:

• Purchases must be allowable under the specific grant or contract and provide a direct benefit.
• Office supplies (e.g., pens, paper) are generally not allowable direct charges.
• Contact Contract and Grant Accounting with questions about allowability.
• Petty Cash cannot be used to charge departmental costs to a grant.
• C&G Accounting verifies PI approval and retains documentation during expenditure reviews.
• All purchases must comply with grant terms and conditions.
• Grant accounts cannot be used as clearing accounts.
• Use the correct Banner fund and account for each purchase.
• Items must be received within the grant’s period of performance.

4.0 Documentation Requirements

Each transaction must be supported by an itemized receipt or other acceptable form of documentation that shows:

1. Date of purchase
2. Vendor name
3. Items purchased and their prices

Acceptable documentation includes:

1. Sales receipts
2. Priced packing slips
3. Cash register or ATM receipts
4. Emailed receipts

Submission and Retention

1. Receipts must be scanned into a legible format (e.g., PDF, JPG) and emailed to Accounts Payable with the completed MDV.
2. Departments must retain documentation until funds are replenished.