Petty Cash Policy

This policy establishes the criteria to request a Petty Cash Fund, its proper use, and administration. The University will establish a Petty Cash Fund only when all other preferred procurement options are not feasible and adequate justification is provided by the school/department.

This policy provides guidance for the authorization, establishment and replenishment of Petty Cash Funds, including appropriate uses, reconciliation and security protocol. Petty Cash Fund requests should be submitted to the Office of the Controller only when other non-cash payment options are not available.

The following criteria is considered when reviewing a request for a Petty Cash Fund:

• The purpose of the Petty Cash Fund
• Whether or not the Petty Cash Fund requirements can be met in another way, such as through use of a Procurement Card (P-Card)/CU Marketplace
• How often will the Petty Cash Fund be replenished
• The department’s ability to properly safeguard the Petty Cash Fund

Departments with Petty Cash Funds are responsible for appointing a Petty Cash Fund Custodian, and for following all use, management and safeguarding requirements.  It is the sole responsibility of the department to ensure that the funds are always secured. 

Roles and Responsibilities

Office of the Controller (Financial Reporting and Operations Department) — Authority to establish a University Petty Cash Fund only after the requesting department has exhausted all other payment method options and sufficiently justified the request.  Based on its discretion, this office can modify (including increases and decreases) and close,and is responsible to execute the recertification process of Petty Cash Funds.

Central Accounts Payable — Responsible for processing appropriate requests for replenishment of all University Petty Cash Funds and for approving the final receipts when the account is ready for closure.  Central Accounts Payable will review disbursements from such Funds to ensure compliance with University policy.

Vendor Management — Responsible for approving the Petty Cash Fund Custodian as a vendor.

DAF Approver — A Columbia University employee who has been assigned DAF authority for the approval of petty cash activities at the department level. This individual is authorized to approve the request for the Office of the Controller to establish a Petty Cash Fund, approve replenishment requests for submission to Central Accounts Payable, and approve requests for modification and closing of a Fund.

Petty Cash Fund Custodian — A Columbia University full-time salaried officer or staff employee. This individual is responsible to safeguard petty cash, manage expense reimbursements, request Fund replenishments, recordkeeping, reconciliation, and general fund administration.

Department Administrator — A Columbia University employee of the department with a Petty Cash Fund responsible for identifying the individuals who are in-scope for tax reporting and ensuring the proper forms are completed and submitted in a timely manner. This includes ensuring that clinical trial participants establish themselves as a vendor in the University vendor management system and communicating any applicable compensation amount to Central Accounts Payable when requested.

Institutional Review Board — Responsible for overseeing the conduct of research that it approves, and in special circumstances, approves the need for establishment of a Petty Cash Fund for the exclusive use for human subject incentives.

CUIMC Controller’s Office — Responsible for approving petty cash activities for the CU Irving Medical Center only.

Office of the Treasurer — Responsible for application of the University Cash Handling Policy in regard to Petty Cash Funds.

Definitions

Petty Cash Fund — A separate departmental cash fund for paying minor business expenses that cannot be paid via other non-cash methods. 

Non-Cash Payment Options –- For all campuses: Procurement Card (P-Card), U.S Bank PayCard, and check.  For Columbia University Irving Medical Center (CUIMC): digital compensation (e.g., Gift Cards, Venmo, PayPal, direct bank account deposit, deposit to debit card) or physical debit card via TruCentive.  Options may be subject to change.  Check with CUIMC Controller or Central Office of the Controller. 

Procurement Card (P-Card) — The P-Card is similar to a credit card used to make purchases of goods and some services (limited by policy).

Human Subject — Voluntary participant in qualified research studies.

Reimbursements — Payments from a Petty Cash Fund to reimburse for incurred expenses and/or for human subject incentives. Petty cash should only be used for reimbursements and not advances.

Reimbursable Expense — An approved University necessary and reasonable business expense that is not subject to IRS reporting or withholding as income (refer to Columbia University's Business Expense Policy for detailed guidance). Custodians should not provide reimbursements for expenses that are older than 120 days; such expenses must be processed using an Expense Report. Receipts that are older than one year will not be accepted in the replenishment process or when closing out a Petty Cash Fund.

Human Subject Reimbursable Expense — An approved University necessary expense to be used for qualifying payments to human subjects engaged in research activities, subject to additional requirements described under ― See Additional Requirements for Human Subjects Research Payments.

Replenishments – Custodian requests replenishment of the Fund through Accounts Payable on a needed and justified basis.

Custodians

Each approved Petty Cash Fund will have a Custodian, a designated full-time salaried officer or staff employee, who is responsible to:

• Adhere to University policy for all reimbursements and payments made from the Petty Cash Fund, as well as safekeeping.
• Reconcile the Petty Cash Fund monthly.
• Maintain required records regarding disbursements that have been made from the Petty Cash Fund.
• Replenish the Petty Cash Fund within the approved level for the Fund with receipts submitted within a reasonable timeframe.
• Note the University’s June 30^th fiscal year end to ensure all expenses are recorded in ARC within the appropriate fiscal year.
• Close the Petty Cash Fund immediately if the purpose for which it was established ends or changes significantly.
• Provide updated and timely Custodian information to the Office of the Controller.

Guidelines

The Office of the Controller authorizes the establishment, modification and closure of Petty Cash Funds. Establishment and increases must have appropriate DAF approval at the department level and, if it is a CUIMC department, the CUIMC Controller’s Office must also approve.

Central Accounts Payable processes replenishments of Petty Cash Funds, which are subject to the University’s policies and procedures regarding expense processing. Supporting documentation reflecting receipts on how the funds were spent is required to satisfy the replenishment amount being requested.

Necessary and reasonable small business transactions not to exceed $80 (Exception: reimbursement of cost of monthly MTA Metrocard). It is not permitted to split the transaction in order to circumvent this limit.

Petty Cash may NOT be used to reimburse purchases made on credit cards or debit cards.

Expenses charged to a Petty Cash Fund must be in compliance with the University’s Travel and Business Expense policy.

All requests from departments for establishing or increasing Petty Cash Funds must meet the appropriate guidelines, receive the appropriate DAF approvals and all new Custodians must meet training requirements.

Petty Cash Funds should not be commingled with any other fund and should never be deposited into a personal banking account.

No expenses that are reportable to the IRS or subject to income tax withholding may be reimbursed through petty cash (for example, consulting services may not be reimbursed through petty cash). Petty cash should be used for reimbursements and not advances.

Under NO circumstance may an individual, including the Custodian, approve his or her own petty cash expense or that of a person to whom he or she reports. It is the responsibility of the Custodian to ensure that each set of Petty Cash Reimbursement records is complete, accurate, and accompanied by original documentation/receipts. The Custodian should keep copies of all reimbursement and replenishment documentation for their own departmental files.

Custodians should not provide reimbursements for expenses that are older than 120 days; such expenses must be processed on an Expense Report. Receipts that are older than one year will not be accepted in the replenishment process or when closing out a Petty Cash Fund.

Original receipts must be provided by those seeking reimbursement from Petty Cash Funds. As an exception, if a receipt is not available or lost, the expense must be fully documented and signed off by the recipient and the Custodian.

Petty Cash Funds must be closed immediately if the purpose for which the Fund was established ends or changes significantly or upon termination of the Custodian's employment by the University (unless a new Custodian is appointed). There will be periodic reviews of account activity, and all inactive accounts will be investigated and closed.

Additional Requirements for Human Subjects Research Payments

There are several non-cash methods to reimburse qualified participants in research studies for approved payments including expenses incurred as a result of participation (i.e., travel related costs) or to compensate subjects for their willingness to participate in the research study.

All plans to compensate participants/subjects in research studies must receive prior approval from the Institutional Review Board (IRB).  Refer to How to Pay for Human Subject Studies - How to Pay for Human Subject Studies. Also included in this link are guidelines regarding additional reporting and vendor setup required if payments to an individual will exceed $600 in a calendar year.

Reconciliation

The Custodian must reconcile the Petty Cash Fund monthly. Reconciliation ensures that the sum of the outstanding reimbursements, cash, and compiled receipts is equal to the original amount of the Fund. For those departments with multiple Petty Cash Funds, an overall department reconciliation should also be performed. Reconciliations must be properly reviewed and approved by a supervisor, with sufficient segregation of duties expected. For auditing purposes, retain complete reconciliation, reimbursement and replenishment records for your departmental files.

Annual Certification Process

The Office of the Controller manages an annual or as determined certification process of all Petty Cash Fund account balances.

Security

It is the Custodian’s responsibility to take adequate precautions for the safekeeping of the Funds under their control. Petty cash must be stored in a secured device such as a safe or cash box in a locked cabinet. Only the Custodian and a senior staff member should have keys to the box and cabinet.

For CUIMC, any Custodian with a Fund or Funds totaling over $1,000 must secure the funds in a safe with access limited to the Custodian.

Under no circumstances should petty cash be removed from University approved premises. If security issues exist, contact the Department of Public Safety or the Office of the Controller for guidance. 

Funds should never be left unattended and unsecured. In the event funds are lost or stolen, the Custodian or a senior staff member must contact the University's Department of Public Safety to submit a Security Report, plus notify the Office of the Controller ([email protected]) by sending a memo outlining pertinent information of loss, including the unrestricted ARC ChartString the loss should be charged to. Any funds missing from a Petty Cash Fund will be charged to an unrestricted ARC ChartString of the responsible department.

Policy Violations

It is the responsibility of the individual to familiarize themselves with this University policy as well as any school specific policies, and to adhere to them at all times.

Columbia University reserves the right to close all Petty Cash Funds that do not meet these University policy guidelines.  Failure to comply with this policy will result in the closing of a Petty Cash Fund and the Custodian may be subject to disciplinary action for any violations of this policy that contributed to the loss of funds.

Business Expense Policy - Business Expense Policy  

Cash and Check Handling Policy - Cash and Check Handling Policy

Departmental Authorization Function (DAF) Policy - DAF Policy

Purchasing Card Policy - Purchasing Card Policy

Columbia Finance – Vendor Management - Columbia Finance Vendor Management

Human Research Policy Guide | Columbia | Research

Human Subjects Research Regulations | Columbia | Research

How to Pay for Human Subject Studies - How to Pay Human Subject Studies

Human Subject Payment Methods Job Aid - Human Subject Payment Methods Job Aid