1.0 General Information
1.1 Statutory Reference
1.2 Petty Cash Funds Definition
A petty cash fund is a segregation of an advance of money from a fund to be
used for incidental purchases and for explicit purposes explained in paragraph
3.0 below. In Connecticut all petty cash funds are operated as Imprest petty
cash funds, i.e. an amount is advanced from the General Fund (or, if
appropriate, from some other fund) to an agency and the agency must at all times
account for this advance.
Disbursements are made as needed, a receipt or petty cash voucher is
completed at the time of disbursement. At certain intervals, or when the petty
cash is completely expended, a report with substantiating petty cash vouchers is
prepared and the petty cash fund is replenished for the amount of disbursements
by a check drawn on the appropriate fund bank account. The total advanced should
always equal the cash on hand, cash in the bank, plus receipts for expenditures.
2.0 Establishing or Increasing Petty Cash Funds
To establish a new petty cash
fund or increase the amount of funds in an
existing petty cash fund, the agency should send a request to the Office of the
State Comptroller (Attention: Director, Administrative Services Division), in memorandum
form, stating the following:
A. The fund from which the advance is requested (General Fund, Special
Revenue, Internal Service, etc.).
B. Whether the request is for a new fund or an increase in an existing fund.
C. Amount requested (if an existing fund, state the present authorized amount
and the requested new authorization).
D. Justification: be specific, stating the projected uses for the fund,
including the anticipated frequency or replenishment.
E. Whether for a temporary or permanent period of time.
F. The request should come from or be approved by the agency head or his/her
G. Written procedures and process charts must be maintained.
H. The agency written policy on travel and employee advances should also be
3.0 Use of Petty Cash
3.1 Acceptable Uses
3.1.1 General Information
petty cash funds have many proper uses; they are intended to facilitate
departmental or agency purchases of small, but necessary operating items, not to
exceed $50.00, except for emergencies or specific exceptions granted by the
State Comptroller, based upon the peculiar needs of an agency.
3.1.2 Workers' Compensation "First" checks
Petty cash funds should be used for the splitting of "first" checks received
for workers' compensation. A determination must be made as to the portion due
the employee, if applicable, and/or the state's portion. The funds deposited
from the "first" check are restricted funds and are not to be used for any other
purpose. Workers' compensation procedures require an adjustment check to be
issued to the employee within five working days after receipt of the "first"
check from the third party administrator.
Two checks would then be issued if a check is to be split between the
employee and the state. One made payable to the employee for the correct
compensation benefit amount due. The second one made payable to the "State
Treasurer" for the amount due the agency and deposited as a Refund of
Expenditures*. The coding string should be the same coding on the original
payment processed through the payroll system.
If it is determined that the entire check amount is due the State, a check is
to be issued, payable to the "State Treasurer", and deposited as a Refund of
Expenditures*. The coding string should be the same coding on the original
payment processed through the payroll system.
If it is determined that an overpayment has been made by the Third Party
Administrator, three checks would then be issued.
One made payable to the employee for the correct workers' compensation
benefit amount due. The second one made payable to the "State Treasurer" for the
amount due the agency and deposited as a Refund of Expenditures*. The coding
string should be the same coding on the original payment processed through the
payroll system. The third one made payable to the "State Treasurer" in the
amount of the overpayment. The following information must be printed on the
check: employee's name; claim number; department of employment; date of injury;
third party administrator's check number to which the check is being written
Forward this check with a covering memorandum to:
c/o Director of Budget
State Office Building - Room 508
165 Capitol Avenue
Hartford, Connecticut 06106
* For recoveries of prior year expenditures against lapsing appropriations,
deposit as a Refund of Prior Year Expenditures, revenue account 44410.
Please direct questions as follows:
Procedure Interpretation - Administrative Services
Division, 860-702-3440. Workers' Compensation Issues - DAS/Personnel, Workers'
Compensation Unit, 860-713-5002.
3.1.3 Funds for Travel Expenses and Workshops/Conferences
When authorized cash advances for travel expenses are made to employees for
whom such provision has been made in a collective bargaining agreement, or
otherwise, such advance should be made from the petty cash fund. To account for
the cash advances, the petty cash fund custodian must obtain a statement, signed
by the recipient, acknowledging:
A. The amount of the cash advanced.
B. That within 5 working days after return, the employee will submit a
completed Form CO-17XP-PR, Employee Reimbursement Voucher with the required
documentation, to the agency business office.
C. It is suggested that conference fees be prepaid on a state purchasing
card, if available. Where time constraints exist, payment can be prepaid through
184.108.40.206 Exception Process
To obtain an exemption to exceed the $50.00 threshold per incident submit an
email to email@example.com with the dollar amount, the justification,
the agency name and the name, address and telephone number of a contact person.
Requests are reviewed on a daily basis and a response will be sent.
220.127.116.11 Legal Costs
All state agencies are granted an exception to the $50 limit for the use of
petty cash when requested by the Office of the Attorney General to provide
checks for costs associated with legal matters.
3.2 Unacceptable Uses
A. Regular invoices that can be processed in Core-CT.
B. Regular postage needs (except for small postage purchases, postage due,
special delivery, and certified or registered mailings).
C. All sundry payments of an allowance nature paid to state employees will be
treated as compensation and reported on IRS Form W-2. Therefore, such payments
must be processed on payroll Form CO-17XP- PR and are not to be paid from petty
D. Check cashing should be limited to State business with proper
E. Payroll transactions should not be processed in petty cash. Contact the
Comptroller's Payroll Division for the proper payroll transaction procedure.
4.0 Agency Records
The following records for all petty cash fund receipts and disbursements must
be kept in detail in order to provide complete accountability.
A. A journal or register in which all fund receipts and expenditures are
1. Form CO-92, petty cash fund account is available from Vanguard Direct.
2. A journal of specific design may be used to meet the needs peculiar to the
B. Receipts to document all disbursements of funds, i.e. for purchases from
vendors, post office mailing or advances for travel or other expenses.
C. When warranted by the size of the fund, a checking account for which prior
approval has been obtained from the State Treasurer and the State Comptroller.
Complete form CO-929, Bank Account Establishment Request.
D. Reconciled checking account statements.
E. Reconciliations of fund.
1. Detailed count of cash on hand, plus
2. Cash in bank, plus
3. Advances, plus
4. Receipts for disbursements not yet submitted for reimbursement, plus
5. Outstanding vouchers submitted for reimbursement, but not yet received
6. The authorized petty cash fund.
To replenish the fund,
complete a voucher. The replenishment should be done at least quarterly. The
frequency depends on the dollar volume of expenditures in relation to the size
of the fund authorized.
6.0 Re-Deposit of Excess Funds
If at any time it is determined that the amount of the petty cash fund is
excessive, re-deposit of the excess must be made. Make check payable to
"Treasurer, State of Connecticut." The re-deposit, should include the following
A. Revenue account "44378".
B. Title of Standard Account "Petty Cash Returned".
C. Fund number to which deposit is made.
D. Agency business unit
Copies of the above documentation must be sent to the Office of the State
Comptroller, Administrative Services Division to ensure that the transaction has been
processed correctly for reducing an authorized petty cash balance.
7.0 Payments to Outside Contractors
Payments to non-state employees (outside contractors) for honoraria, fees for
sports and other special events, and like items should be processed on a voucher
in Core-CT. However, when circumstances necessitate payment from the agency's
petty cash fund, the responsibility for IRS Form 1099 reporting still exists. To
ensure compliance, the following procedures will apply to all such payments from
petty cash to outside contractors.
A. All reportable payments from the agency's petty cash account must be
summarized annually and forwarded to the Comptroller's Accounts Payable
Division, Special Processing Section. Please include the payee name, FEIN/SSN,
complete mailing address and amount paid to each vendor during the calendar
year. This information must be reported between January 1 through January 10 in
order for the Comptroller to comply with IRS reporting requirements. It is each
state agency's responsibility to comply with this requirement. Failure to
properly report this information can subject the State to IRS penalties and
See Section 6.0 Federal Income Tax Reporting, Form 1099 of the Expenditure
Section of this manual for further details.
B. Optional: You may wish to type in an acknowledgment of receipt of payment
on a standardized form and obtain the payee's signature at the time of payment.
8.0 Internal Reporting
All petty cash fund custodians must submit to the agency's chief fiscal
officer or business manager a monthly status report on the activities of the
fund. The report should include:
A. Cash on hand
1. Date advanced.
2. To whom.
C. Outstanding vouchers
1. Not yet submitted for reimbursement.
2. Submitted for reimbursement.
D. Total amount authorized
9.0 Year End Closing
All expenditures should be recorded in the fiscal year in which they occur. A
yearly replenishment must be made and submitted in accordance with the Fiscal
Year End Instructions issued by the Office of the State Comptroller.
10.0 Internal Control
Procedures for internal control may vary according to the size of the fund,
the size of the agency and varying agency needs. The following general rules are
to be applied to all petty cash funds.
A. The petty cash fund custodian should have no other cash handling
B. Petty cash monies should be kept separate from all other monies received
by an agency, except as authorized in writing by the Comptroller's
C. The authorized fund should be kept to the lowest amount possible, but yet
sufficient to adequately meet the needs of the agency. Wherever possible, a
state purchasing card should be used instead of petty cash.
D. Expenditures should be kept within the restrictions set in paragraph 3.0.
E. Every transaction must be tangibly documented with forms such as, but not
limited to: vendor's invoice, cash register tape, petty cash receipt or post
office receipt. Each such document must be itemized and detailed, to the extent
possible, showing quantity, description, prices and total. When completing the
receipt form, use ink (not pencil). Alterations or additions are unacceptable.
Section 3-117a of the Connecticut General Statutes requires original
documentation for expenditures $25 and greater.
F. Every item listed on the Form CO-17 RPC, Request to Replenish Petty Cash
Fund must have an original supporting document attached to the Form CO-17 RPC
G. A periodic detailed examination of the petty cash fund should be made by
the chief fiscal officer or comparable official to verify the following:
1. That established procedures are being followed.
2. Perform a cash count in the presence of the custodian, to verify that the
cash on hand, cash in bank, advances and unreplenished vouchers are in balance
with the total amount authorized.
3. In addition to the cash, verify all other items included in the balance
such as checks, vouchers, etc.
4. All checks included in the balance should be cashed or deposited promptly.
5. Verify that checking account bank statements are being reconciled monthly
by a person other than the custodian and/or one who has the authority to sign
H. The chief fiscal officer or comparable official should also examine, at
random, checking account reconciliations for:
1. Proper procedures.
2. Math verification.
3. Receipts compared with deposits.
4. Timely deposits.
I. The chief fiscal officer or comparable official should also obtain the
checking account statement direct from the bank and perform a verification of
all checks included:
1. For proper endorsements.
2. That those written during a prior statement period were listed as
3. Question items that have been outstanding for more than one month.
11.0 Petty Cash Loss
In the event a significant unexplainable shortage is discovered in the
petty cash fund, the following steps must be taken:
A. The petty cash fund Custodian must report all losses to the agency head
immediately. If a loss results from an apparent criminal act or under mysterious
circumstances, the agency must:
B. Immediately notify the local police department or if applicable, local
security division, i.e. campus police, capital police, etc.
C. Within forty-eight hours of discovery complete and electronically submit
Form CO-853 Report of Loss or Damage to Real and Personal Property to:
And to the Auditors of Public Accounts at:
The report should include in the "Brief Description of Property" the fund
from which the petty cash fund was created.
If you have any questions regarding the reporting of losses, you should
contact the Office of the State Comptroller, Administrative Services Division, Telephone
11.1 Replenishment for Petty Cash Loss
A separate voucher must be submitted promptly by the agency to replenish the
petty cash fund for the amount of the loss. A copy of the loss report - Form
CO-853 must be attached to the voucher, to substantiate the claim for
replenishment. The loss must be charged to the custodial agency's appropriation,
using Expense Account 54762 - Petty Cash Losses.
11.2 Recovery of Loss
Monies recovered directly by the agency are to be recorded in the Accounts
Receivable module within Core-CT using Account code 54762 - Petty Cash Losses
crediting the custodial agency's appropriation for current year recoveries and
Account code 44410 for Prior Year recoveries.
Petty cash fund losses recovered under fidelity bond coverage will be treated
by the Comptroller in the same manner as recoveries of other types of losses.
For procedures to obtain the use of funds realized from an insurance settlement,
see the Property Control Manual.
12.0 Check Cancellation
If a petty cash fund disbursement checks is returned or lost,
it must be cancelled and the accounting records adjusted. The status of
replenishment of the particular expenditure will dictate the portion of the
cancellation procedure to be followed. Procedures for check cancellation when
the expenditure has not been submitted to the Comptroller for reimbursement:
A. Void the check and attach it to the stub in the checkbook.
B. In the petty cash fund account book, Form CO-92, reverse the original
disbursement entry and increase the balance in the bank account column. Explain
the entry in the description column making reference to the cancelled item.
Procedures for check cancellation when the expenditure has been submitted to
the Comptroller for reimbursement and the replenishment is in transit or has
already been received by the agency.
A. If the check is returned, void the check and attach it to the stub in the
checkbook; or if the check is outstanding for an extended period of time and it
is certain that it cannot be cashed, issue a stop-payment notice to the bank. In
the petty cash fund account book, reverse the original disbursement entry and
increase the balance in the description column making reference to the cancelled
item. When the replenishment is received, you will have excess cash. Therefore:
B. Issue a check, in the amount of the cancelled check, payable to the State
Treasurer and deposit it within the Accounts Receivable module of Core-CT and
the appropriate revenue account for budgeted or non-budgeted accounts, internal
service or enterprise fund account number. Explain the entry in the description
column making reference to the cancellation.
13.0 Annual Report
A petty cash fund report is required for each petty cash advance,
regardless of fund, authorized by the State Comptroller. A statewide
memorandum is issued each fiscal year with the petty cash fund report and the
detailed instructions. The report will be as of April 30 and due in the
Office of the State Comptroller, Administrative Services Division no later than May 31
of each year. Certification by the chief administrative officer, chief fiscal
officer or comparable official is required. If there are any questions on the
preparation of this report contact the Administrative Services Division at 860-702-3440.
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