3. *
*The three primary objectives of effective
internal control:
* Reliability of financial reporting
* Efficiency and effectiveness of operations
* Compliance with laws and regulations
6. 1. Introduction
Petty Cash Policy and Procedures document:
is issued on 1st August 2009
supersedes all other policies and procedures
relating to petty cash currently in issue
is applicable to all employees of the
company
Petty cash claims will not be reimbursed to
self-employed persons
7. 2. Policy
Petty Cash may be used to reimburse for small
items of incidental expenditure only
The maximum amount that may be claimed is
$500
8. 2. Policy
The following items cannot be reimbursed via
petty cash:
• Travel and subsistence
• Hospitality or entertaining
• Uniforms
• Telephone costs
• Equipment
9. 3. Procedure
The working flow in the company is listed
below:
Petty cash fund
• The Manager should often review
the amount in the fund to ensure that
the amount is adequate
• The money should be kept in a
locked petty cash box under the
control of the Petty Cashier
10. 3. Procedure
Petty cash expenses
• Petty cash expenses must be related to
legitimate company activities
• The maximum limit for petty cash
expenses is $500. Expenses over this
amount must be paid by cheque
• Casual wages are not paid out of the
petty cash fund
11. 3. Procedure
Documentation required
Employees:
• Keep all dockets and/or receipts for petty
cash expenses as proof of payment
• Attach dockets and/or receipts to the back
of the Petty Cash Voucher
• Check at the point of purchase that
dockets/receipts are clear and correct
12. 3. Procedure
Claims process
Employees:
• Complete a Petty Cash Voucher
• Attach relevant dockets/receipts to the
back of the Petty Cash Voucher
• Obtain the supervisor’s authorization for
amounts over $350
13. 3. Procedure
Claims process
• Submit all claims to the Petty Cashier
within seven (7) working days
Petty Cashier:
• Check the claim and reimburse the
employee from the petty cash fund for
the amount spent within two (2) days of
the claim
14. 3. Procedure
Petty cash advances
Employees:
• Complete a Petty Cash Voucher if money is
needed, in advance, to pay a company-related
expense
• Get the Manager’s approval for the advance
• Give the Petty Cashier a docket/receipt for the
money spent, as well as any change from the
advance, within five (5) working days of receiving
the money
15. 3. Procedure
Security
Petty Cashier:
o Keep the petty cash fund secure by:
• not allowing other persons access to the petty
cash box
• locking the petty cash box when it is not being
used
• putting the petty cash box in a locked desk
drawer during working hours
16. 3. Procedure
Security
Petty Cashier:
• putting the petty cash box in a safe place
overnight
o Do not issue funds from the petty cash fund
unless a Petty Cash Voucher has been
processed, in accordance with the above
guidelines
17. 3. Procedure
Petty cash expenses
Petty Cashier:
• Check all Petty Cash Vouchers against
dockets/receipts for accuracy
• Check that all claims are related to the
company’s business
18. 3. Procedure
Petty cash expenses
Petty Cashier:
• Check that all claims over $350 have been
authorised by the employee’s supervisor
• Pay approved petty cash claims promptly and
accurately
19. 3. Procedure
Petty cash expenses
Petty Cashier:
• Keep all Petty Cash Vouchers in the petty
cash box until recorded
20. 3. Procedure
Petty cash advances
Petty Cashier:
• Check that all petty cash advances are
authorized
• Pay out petty cash advances
• Follow up petty cash advances if the
docket/receipt for the expense is not
submitted within five (5) working days
21. 3. Procedure
Petty Cash Book
Petty Cashier:
• Record all Petty Cash Vouchers in the Petty
Cash Book at least weekly
• Balance the Petty Cash Book fortnightly or when
funds are running low
• Check the balance in the Petty Cash Book
against the amount remaining in the petty cash
box
22. 3. Procedure
Petty Cash Book
Petty Cashier:
• Submit the Petty Cash Book and Petty
Cash Vouchers to the Authorised Officer
fortnightly and advise of any problems
• Advise the Authorised Officer of how much
money is required to reimburse the fund
23. 3. Procedure
Petty Cash Book
Petty Cashier:
• Advise the Authorised Officer when the amount
in the petty cash fund needs to be increased
24. *
Deficiency and type of control activities
Effective internal control = Design and operate the policies and the procedures effectively
25. Deficiency Type of control activities
should be strengthen
On last day of January, a copy Adequate documents and
purchase office supply receipt records
was use to reimburse petty
cash from petty cashier.
Accountant, did the petty cash Proper authorization of
fund requesting instead of transaction and activities.
petty cashier who are
responsible in preparing this
requesting to petty cash
coordinator.
On the surprise cash control of Physical control over assets
petty cash fund, the financial and record
manager find the wrong
amount between the
remaining cash and the
record-balanced because the
petty cashier recorded the
wrong number of one receipt
payment.
26. A Voucher that reimbursed to Proper authorization of transaction
employee on the last day of February and activities.
was signed by financial officer.
Petty cashier confused to reimburse Physical control over assets and
twice to one receipt in March 23rd. record
Due to the short of petty cash, Physical control over assets and
financial officer agree to the record
requesting $400 from petty cashier. Independent checks on
But the remaining of petty cash at performance
that time was $168. So, the petty
cash will be up to $568.
One receipt was found that an Independent checks on
expense item was English Grammar performance
Book, not involve with the company Adequate documents & records
operation. As a result, one staff used
petty cash for his personal expense.
27. *IV. Comments
*Require original receipts in order to disburse
petty cash. Maintain the receipts in the petty
cash fund box for reconciling.
*The person to be reimbursed should indicate on
the original receipt what was purchased, the
business purpose, and account and fund to be
charged.
28. *IV. Comments (con’t)
*The original receipts should be approved and signed
by an appropriate authorized individual.
*The petty cash fund should not be used for personal
benefit.
*The Manager is responsible for regularly reconciling
the petty cash fund
29. *IV. Comments (con’t)
*A petty cash fund remains open on the records
of the Accounting Services Department until you
request it be closed. The Accounting Services
Department performs an annual written
confirmation of the petty cash account balances.
30. *IV. Comments (con’t)
*Decide if you really need a petty cash fund. If
not, contact the Accounting Services Department
to close the fund.
*Provide the enough documents and reasons for
the shortage of petty cash fund.
31. *IV. Comments (con’t)
*Return the petty cash fund to the financial
official in case that the reimbursement amount is
over the petty cash set ($500).
*The petty cashier should be more independent
on his or her obligation.
32. V. References
*Ms. Chea Yana, Manager of Lux Fashion
Company
Email: yana_luxfashion@yahoo.com
Tel: 012 348 999
* Auditing and Assurance Services, Prof. Elder/
Beasley/ Arens, 12th Edition, Publish in 2008