Petty Cash Policy Statement

Scope

Petty cash funds are to be used to pay for miscellaneous and incidental items of small value. Expenditure may only be incurred for FXAV business purposes. This Policy will meet the requirements of probity and accountability

Monetary Limit

There is a $30 limit inclusive of Goods and Services Tax (GST) for individual amounts reimbursed by petty cash. Payment for items of a higher value should be made through the issue of a FXAV cheque duly authorized by the FXAV Treasurer and President.

Inappropriate Use of Petty Cash

Within the monetary limit for petty cash transactions, petty cash funds cannot be used as a means of circumventing normal control procedures. It is inappropriate for petty cash to be used in any of the following circumstances unless specifically authorized by the FXAV committee.:

  • to make payments to staff for personal items or services,
  • to make payments for travel and conference expenses unless specifically authorized by the FXAV committee,
  • for cashing personal chequerequests,
  • to advance loans to staff,
  • to make cash advances for travel, unless specifically authorized by the FXAV committee.

Petty cash funds may only be used for necessary and appropriate FXAV expenditure. In cases of non-compliance to the Expenditure Policy, Members who incurred the expenditure may be required to repay the FXAV.

Petty Cash Management Procedures

The objectives of the Procedures are to ensure adequate control is maintained over Petty Cash expenditure and that petty cash payments are supported by proper documentation.

Reimbursement from Petty Cash Funds

Disbursements from petty cash funds are made to reimburse a FXAV member (“the claimant”) for actual expenses incurred for FXAV business-related expenditure. A claim for reimbursement must be supported by an original tax invoice and receipt. Where invoices or receipts are lost or where invoices or receipts were impossible to obtain, the claimant must complete a declaration of missing receipts. In this declaration the claimant must itemize the missing receipts, include the reasons for unavailability of receipts and declare that the expenditure is incurred in accordance with FXAV Policy. The purpose of the expenditure should be noted in a Petty Cash Journal and the receipts dated and filed for future reference..

Original receipts, dockets and tax invoices must be marked “PAID” by the Petty Cash Advance Holder, so as to avoid duplicate reimbursement.

The Petty Cash Journal entries must include:

  • the date of disbursement
  • a full description of the expenditure
  • the signature of the claimant

The Petty Cash Advance Holder must:

  • verify the signature of the Incurring Officer against the Authorized Signatory List before handing over cash to the claimant
  • complete an entry to the Petty Cash Journal .

The claimant must then sign the Petty Cash Journal to acknowledge receipt of the cash. Cash reimbursements cannot be made to a third party except where the claimant expressly authorizes this in writing.

Procedures for Petty Cash Advance Holders

NewPetty Cash floats and Increases in floats;

The FXAV Committee must formally approve the establishment of any new petty cash float and/or increases in the amount of any existing petty cash float. All records of establishment of new petty cash float must be retained by FXAV Treasurer for review.

Replenishment of the Petty Cash Float;

When the cash on hand (in the Float) has been reduced to approximately one third of the authorized total, the Petty Cash Advance Holder may request additional funds through the FXAV Treasurer supplying a statement showing all completed Petty Cash Journals and stating the balance of the float. The total amount stated on the statement should equate to the amount of the original approved float. All supporting receiptsmust be supplied with the request statement. Once certified by the Treasurer, this statement is to be retained as part of the FXAV financial records.

The petty cash float cannot be reimbursed from:

  • other moneys that come into the FXAV’s possession without the direct consent of the Committee.
  • personal funds of the Petty Cash Advance Holder orother members.

Safeguarding Petty Cash floats

Where possible, disbursements of petty cash should not occur in an area open to the public. Petty cash funds should be held in alockable cash tin and stored in a locked safe (preferably) or a locked cabinet during all absences of the Petty Cash Advance Holder. The cash tin and storage area should be away from large traffic flows and from areas open to public viewing.

Keys to the cash tin should be stored securely and access to safe/ cabinet keys and combinations should be similarly restricted.

Changing Custody of Petty Cash floats

From time to time, because of leave, illness, cessation of membership or changed responsibilities, the Petty Cash Advance Holder of a petty cash float changes. Whether the new Petty Cash Advance Holder has temporary or permanent responsibility for the float, the procedure for handover of the float is the same.

The handover should take place in the presence of both the outgoing and new Petty Cash Advance Holder, with the cash and value of vouchers being recorded on a PettyCash Handover statement. The statement is to be signed by both parties and forwarded to the Treasurer or President. The statement provides a record of the float balance at handover and of the name and signature of the new Petty Cash Advance Holder.

Reconciling and Balancing Petty Cash floats

The Petty Cash Advance Holder must ensure that the petty cash float is reconciled at all times using the Petty Cash journal. The reconciliation confirms that the cash funds on hand, plus petty cash vouchers equal the float total.

Where the Petty Cash Advance Holder discovers a discrepancy, or suspects the misuse of petty cash funds, it must be reported to the President. The TreasurerandPresident or their appointed delegates, will then discuss what corrective action needs to be taken.

The Treasurer will reconcile the total of the petty cash advances to the FXAV Financial statement and report to the committee on a monthly basis. The Committee will review the reconciliations.

Spot Checks

The Committee will nominate a Petty Cash Verifier for conducting random petty cash counts. Periodically, and at least every six months on average, the petty cash float will be counted by the Petty Cash Verifier. Spot checks must be unannounced and are intended to provide confirmation of the Petty Cash Advance Holder’s reconciliations.

The count must be conducted in the presence of the Petty Cash Advance Holder and the Petty Cash Verifier will complete a written recordof the verification, which will be signed by both the Petty Cash Verifier and the Petty Cash Advance Holder.

Cash count records must be retained on file by the Petty Cash Verifier and made available for the Treasurer and Committee audit review.

Authorityto Change PettyCash Advance Holders or WithdrawPetty Cash floats

The Treasurer and the President are authorized to change the Petty Cash Advance Holders or withdraw petty cash floats. In such cases any handover must take place in the presence of both parties and the Treasurer.

Where the mismanagement of the petty cash float is considered to be serious, the Committee may refer the matter to independent audit for further action.

Maintenance

The Committee Treasurer, will maintain and keep current the following:

  • Authorized Signatories List
  • Petty Cash float Account List
  • List of Petty Cash Verifiers