Question

You are required to develop a petty cash system to ensure daily activities are carried out according to legislative requirements.

i) Develop the policy

ii) Develop a guideline for work procedures for:

• carrying out a petty cash claim (for employees) and

• advancing and accepting a petty cash claim (for the petty cash officer).

The documents must be appropriately formatted and presented. Note: Providing any supporting forms is optional on this occasion.

Answer 1

	Petty Cash policy :
1.	A petty cash fund must be established at an appropriate level subject to proper justification and approval by the Chief Executive Officer.
2.	A petty cash custodian in the Finance Directorate should be responsible for petty cash funds.
3.	Petty cash funds are based on the imprest system and must be reported on as and when the imprest amount is to be reimbursed, with the associated detailed expenditures being recorded in the cash book at that time.
4.	Periodic petty cash counts and reviews are undertaken by appropriate staff independent of the petty cash function to ensure that the custodian is adhering to the policy and procedures.
5.	Petty cash should only be utilized in the event of general overhead expenditure and emergencies in order to ensure the time value of money by investing those funds in the deposit.
	Claims by employees :
6.	A petty cash claim by the employee should be pre-approved by the reporting manager and approval of next level of authority in case the claim requires as per policy.
7.	The custodian has to verify the evidence of approval for such claims and process such claim for further approval by the Finance Manager and Finance controller ( if exceeds the daily limit) of the entity.
8.	And finally, a voucher should get signed from the employee and the finance manager for making the payment against such claims.
	Claims for petty cash officer :
9.	The claims need to be verified by Finance manager, as like the work was done by the custodian for employee claims, and the same needs to be approved by Finance controller even if the amount is within the daily limits.