TE_CA_03-02 _IMCOM_PR_G9_Internal_Controls_-_Petty_Cash_Funds_Updated_09.11.15.docx

Chapter 2

Petty Cash

PETTY CASH

REFERENCES:

a. AR 215-1, Military Morale, Welfare, and Recreation Programs and Nonappropriated Fund Instrumentalities, Appendix G, Cash Inventory and Retail Sales Accountability (Controls and Procedures)

b. DFAS Regulation 37-1 Regulation, Finance and Accounting Policy Implementation

1. Petty cash funds are used to pay for items, services, or incidental expenses where payment by check or credit card is not feasible. This fund is not to be used to circumvent normal procurement procedures.

2. The Director of Family and Morale, Welfare, and Recreation (DFMWR) will establish petty cash funds, appoint Petty Cash Change Fund Administrators, and determine the amount designated for each activity in writing (Encl 2-1).

3. The amount of the petty cash fund will not exceed one month’s requirements.

4. Individual transactions will not exceed $500. Petty cash transactions will not be split up to avoid the limitation set on the fund.

5. If cash is given as bingo prizes a separate petty cash fund is to be used to cover payouts.

6. Petty cash will not be used to cash checks, pay salaries or wages, travel payments, or travel advances.

7. Petty cash funds will be secured in an approved safe in a locked container (such as a money box). The petty cash funds will not be commingled with any other funds maintained in the activity’s safe.

8. Each petty cash fund may be reimbursed as necessary, but at least at the end of each month.

9. DA Form 1994 (Petty Cash Voucher) will be used to validate each petty cash transaction (Encl 2-2). The vouchers will be numbered sequentially, issued, and controlled by maintaining a record showing when it was used by the Financial Management Office.

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10. Disbursing Petty Cash Funds:

a. The Petty Cash Fund Custodian is responsible for the disbursement of funds from the petty cash fund. The Petty Cash Fund Custodian may designate a representative to act in his/her place to approve purchases and disburse petty cash funds, however this does not alleviate the Petty Cash Fund Custodian’s responsibility for ensuring accountability of funds is maintained and all procedures are followed.

b. The person receiving monies from the petty cash fund to make a purchase must sign a temporary receipt, DA Form 1992, for the cash.

(1) When the transaction is complete, the receipt of purchase and remaining cash is reconciled with the activity’s copy of DA Form 1992.

(2) If there are no discrepancies, the original DA Form 1992 may be destroyed. DO NOT use the DA Form 1994 (Petty Cash Voucher) to temporarily sign out funds

c. Use a pre-numbered DA Form 1994 (Petty Cash Voucher) for disbursements from petty cash funds when the transaction is completed.

d. Use a separate voucher for each disbursement from the fund.

e. Fill out the DA Form 1994 in ink.

f. The following blocks should be filled out accordingly (Encl 2-2):

(1) The “Activity” is the location submitting the petty cash voucher.

(2) The “Pay To” line is for the activity to which the payment was made (i.e., Home Depot, AAFES PX, Commissary, etc.).

(3) The “Purpose” is what was purchased in detail, how many, and price of each.

(4) The “Account Number” is the department code and general ledger account code (GLAC) which the purchase is charged.

(5) The “Activity” is the activity code to which the purchase is charged.

(6) The “Amount” is the total purchase amount for the line item.

(7) The “Receipt of Above Amount is Acknowledged” is signed by the individual making the purchase. This is necessary to determine who actually bought the items listed on the receipt in case there are questions pertaining to the purchase.

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(8) The “Approved By” signature block is completed by the Petty Cash Change Fund Administrator.

g. Paid vouchers and supporting documents must be clearly marked “PAID”, dated and initialed by the person making the distribution.

h. Attach supporting documents (invoices, register receipts, etc.) to the DA Form 1994 when vouchers are turned in for reimbursement.

i. Account for all voucher serial numbers when replenishing petty cash.

11. DA Form 1993 (Nonappropriated Fund Petty Cash Summary Voucher) (Encl 2-3) will be used to summarize the DA Forms 1994 and serve as a cover voucher when seeking reimbursement from NFS/CAO.

a. At a minimum, a request to reimburse petty cash must be submitted as of the last day of each month or by the second workday of the following month.

b. The DA Form 1993 is an envelope form. The original DA Forms 1994 (Petty Cash Voucher) and supporting documents will be enclosed in the DA Form 1993 including all voided forms.

c. All document submitted – DA Forms 1994 and supporting documentation must be copied and kept on file for audit purposes.

d. The Financial Management (FM) Office must review DA Forms 1994 and reconcile use of the forms with the numbers that have been issued.

e. The DFMWR or designated representative will approve the replenishment of petty cash funds prior to NFS/CAO preparing a check for replenishment.

f. NFS/CAO will issue a check payable to the Petty Cash Change Fund Administrator, by name, to reimburse the petty cash fund and the vouchers are charged to the appropriate expense accounts.

12. Managers or their representatives will make unannounced counts of petty cash funds at least quarterly.

13. A complete analysis of all petty cash funds will be conducted by NFS/CAO or FM office at least on an annual basis. Recommendations for increasing, decreasing, dissolving, or continuing each fund authorized will be provided. Things to be considered include use or non-use, number of times per month reimbursed and questionable practices of the agent.

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14. It is highly recommended that petty cash funds are limited to one per garrison.

15. Unannounced Cash Counts:

a. The Financial Management Division will conduct and document quarterly unannounced cash counts of all petty cash funds. This does not prevent Division Chiefs or Activity Managers from conducting periodic cash counts.

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MEMORANDUM FOR Jane Smith, ABC Activity, XX

SUBJECT: Appointment of Primary Change Fund Administrator

1. Appointment. Effective this date, you are hereby appointed as Primary Change Fund Administrator for the purpose set forth below.

a. Your fund amount is:

Total Fund(s) $ 4,500.00

b. Your appointment shall remain in effect until you are requested by the Director of Family and Morale, Welfare, and Recreation (DFMWR) to return the fund or when relieved of duty.

2. Responsibilities. As Primary Administrator of this/these fund(s) you are responsible for the following:

a. Security and financial accounting of all transactions involved in the control of such funds. Cash handling procedures shall comply with local standard operating procedures and updates as well as with paragraph 32040111 of DFAS IN Regulation 37-1, Accounting Procedures for Army Nonappropriated Fund Instrumentalities.

b. Accounting, safeguarding, and internal controls shall be in compliance with:

(1) Appendix G, AR 215-1, Military Morale, Welfare, and Recreation Programs and Nonappropriated Fund Instrumentalities.

(2) Paragraph 32040111 of DFAS IN Regulation 37-1, Accounting Procedures for Army Nonappropriated Fund Instrumentalities.

c. Petty Cash purchases shall comply with Chapters 1, 3, and 4 of AR 215-4, NAF Contracting.

d. Conformance with other applicable command regulations and directives.

Encl 2-1 2-5 (Office Symbol) SUBJECT: Appointment of Primary Change Fund Administrator

3. Limitations.

a. As Primary Administrator, the fund will be used solely in connection with duly authorized business.

b. Should irregular procurement or other unauthorized procurement action occur, the responsibility of such action shall fall upon the Alternate Administrator.

4. Standards of Conduct. You will comply with the standards of conduct prescribed by DOD 5500.7-R, Joint Ethics Regulation (JER).

5. Authority. Your appointment as Primary Administrator is made under the authority of AR 215-1, Appendix G.

6. This memorandum supersedes all others dated before (date of appointment) for location XX primary change fund administrator.

Morale, Welfare, and Recreation Operating Entity (Garrison)

CF:

NAF Financial Services/Central Accounting Office

Encl 2-1 2-6

ACKNOWLEDGMENT

I acknowledge the appointment by the Director of Family and Morale, Welfare, and Recreation and accept the responsibilities and limitations set forth in this memorandum dated ____________, and will keep a copy of this memorandum on file.

(Signature) (Date)

Jane Smith (Printed Name)

Encl 2-1 2-5

Encl 2-2 2-7

Encl 2-3

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