5. PETTY CASH
5.1. Definition:
5.1.1. This section describes the general guidelines and control procedures for the management of the petty cash system.
5.1.2. The petty cash system is set up on an imprest system basis.
5.1.3. The key control features of a petty cash imprest system are that:
(a) It involves the establishment of a fixed float or advance amount (imprest amount).
(b) Payments are made from petty cash on the production of duly signed and authorized petty cash voucher with supporting evidence of purchase i.e. cash sale docket/receipts attached to the voucher.
(c) At any time the total value of petty cash vouchers plus the amount of cash left in the cash box should equal the value of the original fixed float or imprest amount.
(d) Periodic reimbursement of the amount expended, as evidenced by the petty cash vouchers, to bring the balance remaining up to the original float or imprest amount.
(e) By adopting this system, the sum of money that must be accounted for is always known.
5.2. Controls & Responsibilities:
5.2.1. The petty cash float is maintained at RM1,000.00. If, any time it is found necessary to increase or reduce the float, a decision has to be taken at a PFC meeting and approved by the Parish Priest. Such decision has to be recorded
5.2.2. It is important that one person i.e. the petty cash custodian, should have ultimate responsibility for petty cash transactions to ensure accountability. The custodian of the petty cash fund shall be the Church Administrator.
5.2.3. The petty cash fund must be kept in a locked petty cash box and securely placed in a locked drawer.
5.2.4. The keys of the petty cash box and the drawer must be kept only by the Administrator who is the custodian.
5.2.5. Petty cash payments must be limited to small expenditures which are regularly incurred in the day to day operations of the Church such as refreshments, cleaning, postage stamps, stationery, etc.
5.2.6. Each petty cash payment is limited to a maximum of RM150.00.
5.2.7. Payments exceeding RM150.00 each can only be paid by cheque. (Please see section on Cheque Payments).
5.2.8. All petty cash transactions are to be recorded in a dedicated petty cash book or spreadsheet.
5.2.9. A weekly check of the petty cash book/spreadsheet against the respective petty cash vouchers must be carried out by a member of the Parish Finance Committee or a volunteer authorized by the Parish Priest.
(a) Where a volunteer is appointed, the Parish Priest will give due notification to the Finance Committee which has responsibility for the administration of all financial administration.
(b) The volunteer has to take instructions from the Finance Committee and be guided on the method and procedure for checking or verifying the petty cash book.
(c) Once verified correct, the respective vouchers must be duly initialled.
(d) Any irregularities or non-compliance by the petty cash custodian must be immediately queried. If unresolved, the matter must be immediately reported to the Parish Priest.
5.2.10. When the petty cash balance depletes to a level of around RM300.00, replenishment should be made to ensure there is a sufficient fund for petty cash payments.
5.2.11. All petty cash vouchers must be serially numbered in ascending sequence.
5.2.12. The petty cash fund must be reconcilable at all times. This means that the balance of petty cash together with receipted petty cash dockets (not yet replenished) must add up to RM1,000.00 at all times.
5.2.13. Authorized members of the Parish Finance Committee or a volunteer authorized by the Parish Priest should conduct regular spontaneous cash counts to prevent the misuse of funds.
5.2.14. Petty cash advance and/or the exchange of personal cheques from the petty cash fund are strictly prohibited. Such incident will constitute an administrative misconduct by the custodian.
5.2.15. When there is a change of custodian, the petty cash box key and the drawer key must be handed over to the replacing custodian only after the new custodian accepts that the petty cash balance plus un-replenished petty cash payment dockets add up to the original float of RM1,000.00. Henceforth the responsibility lies with the new custodian.
5.3. Procedures:
5.3.1. Voucher number (to be Before a petty cash payment is made, the Administrator must check that it is a valid petty cash reimbursement duly supported an invoice or a cash sale chit.
5.3.2. A petty cash voucher must be completed for each petty cash payment.
5.3.3. A petty cash voucher contains the following information:
(a) serially & sequentially numbered)
(b) Date (the date of payment)
(c) GL Account Number (i.e. General Ledger Code – see Schedule I)
(d) GL Account Name (as obtained from General Ledger Code)
(e) Purpose i.e. what is the payment for?
(f) Amount paid
(g) Recipient’s signature (i.e. the person who receives the payment)
(h) Name of the recipient
(i) Authorized signature (i.e. signature of the petty cash custodian)
(j) Checked by (initial of the PFC member carrying out the audit)
5.3.4. For control purposes, serially number petty cash vouchers in sequential order.
5.3.5. Attach all supporting documents to the respective petty cash voucher.
5.3.6. The supporting documents i.e. invoice, cash sale, etc. must be stamped “PAID” to avoid duplicate payment.
5.3.7. Request the payee/recipient to sign in the space provided on the voucher as acknowledgement before releasing the payment.
5.3.8. Record each payment in the petty cash book or spreadsheet.
5.3.9. Write the general ledger account name & account code on the payment docket by referring to the list of General Ledger Account Codes. Where the Administrator is uncertain about the allocation of an account name/account code, reference should be made to a member of the Parish Finance Committee or to any authorized volunteer(s) appointed by the Parish Priest.
5.3.10. Petty Cash Replenishment:
(a) When the petty cash fund depletes to around RM300.00, replenishment of petty cash must be made.
(b) Produce the petty cash book or print out the spreadsheet from the computer file and attach all the respective petty cash vouchers, (the total of which should equal the amount to be claimed) for submission to the Parish Priest or an authorized member of the Parish Finance Committee for verification and approval.
(c) On approval, a cash cheque for the required sum should be issued and drawn at the respective bank. The cash replenishment should be kept by the petty cash custodian in the petty cash box.