Sec.
3-112. Powers and duties. (a) The Comptroller shall: (1) Establish and
maintain the accounts of the state government and perform such other duties
as are prescribed by the Constitution of the state; ... (4) prescribe the
mode of keeping and rendering all public accounts of departments or agencies
of the state and of institutions supported by the state or receiving state
aid by appropriation from the General Assembly; (5) prepare and issue
effective accounting and payroll manuals for use by the various agencies of
the state; (6) from time to time, examine and state the amount of all debts
and credits of the state;
Sec
3-117. Claims against the state. (a)... Each claim against the state
shall be supported by vouchers or receipts for the payment of any money
exceeding twenty-five dollars at any one time, and an accurate account,
showing the items of such claim, and a detailed account of expenses, when
expenses constitute a portion of it, specifying the day when and purpose for
which they were incurred."
1.2 Definitions
1. Petty Cash Funds - 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 section 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. 2. Trustee Accounts - Trustee
accounts and Activity/Welfare funds are different from Petty Cash accounts
and can be operated by state agencies or by a trustee organization that
falls under state agency administrative custody. For more information on
Trustee Accounts and Activity/Welfare funds, see the
State of
Connecticut Accounting Procedures Manual for Trustee Accounts. 3.
Authorized Balance - The amount that an agency has been approved to have in
their petty cash account. At any time, the current cash on hand, bank
balance, and outstanding vouchers should equate to the Authorized Balance
approved by OSC CAP. 4. Chief Fiscal Officer
-
The highest employee in an agency's fiscal services that reports directly to
the Agency Head/Commissioner. For the purposes of this manual, if that
employee is not managerial/executive level, then the Agency
Head/Commissioner shall be responsible. 5.
OSC
CAP -The Office of the State Comptroller, Central Accounts Payable
Division, performs review of internal controls and annual review of petty
cash accounts. 6. OSC BFA - The Office of the
State Comptroller, Budget and Financial Analysis Division, performs
accounting entries during the replenishment and redepositing of petty cash
funds. They also perform functions during the creation and dissolution
of petty cash accounts to adjust budget limits. 7.
OTT - The Office of the Treasurer, works with agencies and contracted
banking entities to create, close, and manage physical bank accounts and
investment funds for the state. 8. CO-928
-The
CO-928 (Annual Petty Cash Report) is filed with OSC CAP each year along with
necessary backup documents to show that the agency is still operating their
petty cash account within the approved Authorized Balance. 9.
CO-929 - The CO-929 (Bank Account Establishment Request) is submitted when
an agency needs to open a new physical bank account as authorized by OTT.
10. CO-1052 - The CO-1052 (Request to Open/Close/Transfer) should be
filled out when an agency needs to open or permanently close a petty cash
account, or when they need to transfer funds from one petty cash account to
another. 11. CO-1053 - The CO-1053 (Request for Amount
Adjustment/Expenditures) should be used by agencies to request adjustments
to a petty cash authorized balance, or when they need to make a single
expenditure which is in excess of the approved amount specified in section
3.2 Acceptable Uses of Petty Cash Funds. 12. TR-01
- The TR-01
(Cash Management Signature Card) is submitted to the Treasurer's Office when
a new physical bank account is opened to have the signatures of the
authorized users on file with the bank. This form should be typed and
then printed for final signature. The original form bearing the wet
signatures of authorized staff should be submitted by mail to the
Treasurer's Office as described on the form.
2.1 Establishing/Opening Petty Cash Account To
establish a new petty cash fund, the agency must fill out a CO-1052, CO-929,
TR-01, and produce an agency policy document for the fund. The agency policy
document should explain the proper use of the new account, give guidelines
on internal controls, and provide instruction for the eventual dissolution
of the fund should it become obsolete in the future.
These forms
should be emailed to the Office of the State Comptroller (OSC) at
osc.pettycash@ct.gov. Once OSC has
approved the CO-1052 they will inform the agency that the application has
been forwarded to OTT for approval and establishment of the physical bank
account per the CO-929. OTT may require agencies to submit a TR-01 form to
establish agency authority to transact in the new account.
2.2 Increase Petty Cash Authorized Balance To increase the
maximum amount of funds in the agencies petty cash account (general or
non-general), the agency must fill out a CO-1053 (Petty Cash/Trustee Account
Request For Amount Adjustment/Expenditures) and email the request to OSC at
osc.pettycash@ct.gov.
2.3 Replenishment of Petty Cash Funds To replenish
the Petty Cash fund, agency should complete a non-po voucher to send funds
to Petty Cash account. The replenishment should be done at least quarterly.
However, replenishment can happen more often depending on the dollar volume
of expenditures in relation to the size of the fund authorized balance.
A copy of the CO-17RPC should be attached to the non-po voucher as backup
documentation.
2.4 Redepositing of Excess Funds or Reducing Petty Cash Funds
If at
any time it is determined that the funds in the Petty Cash Account exceed
the authorized balance or the authorized balance should be reduced, a
re-deposit of the funds should be completed.
A.
Make check payable to "Treasurer, State of Connecticut."
B.
Agency should "re-deposit" into state account.
a. Agencies who have access to deposit directly into the state account should
deposit into the account. b. An agency that does
not have the access to deposit into the state account should email OTT at
OTT.AR@ct.gov to receive further
instruction about sending the check to the Treasurer's office for
re-deposit.
C. The re-deposit must include the
following information: a. Revenue account
"44378". b. Title of Standard Account - "Petty
Cash Returned". i. Reimbursed cancellation
- "Petty Cash Returned -
Cancellation". c. Fund number to which
deposit is made. d. Agency business unit
Copies of the above documentation and deposits must be sent to the OSC
Central Accounts Payable (CAP) Division at
osc.pettycash@ct.gov and the
Budget and Financial Analysis (BFA) Division's
Rebecca.Salerni@ct.gov and
Lauren.Baah@ct.gov. BFA will ensure
that the transaction has been processed correctly for reducing an authorized
petty cash balance.
If the agency is reducing its Authorized Balance
for the Petty Cash account, then they should also fill out a CO-1053 and
email it to OSC at
osc.pettycash@ct.gov.
2.5 Transfer of Funds Between Petty Cash
Accounts If a transfer of funds from one account to another is required a
CO-1052 must be filled out and sent to the OSC at
osc.pettycash@ct.gov. The request
should come from or be approved by the issuing agency's head or their
manager level designee. 2.6 Closing a Petty Cash Account Agencies
wishing to close a petty cash account must submit a CO-1052 to OSC
osc.pettycash@ct.gov for approval.
After receiving OSC approval and redepositing the funds to the General Fund
(or other source fund if applicable) according to section 2.4 above. To
physically close the account, agencies should send a memo to OTT requesting
to close the account and attach the last bank statement for the month prior
showing the balance.
Petty cash funds are used to pay for small expenditure items in
which payment cannot be issued out of Core-CT or purchased using a
purchasing card. There are acceptable and unacceptable uses of petty cash
funds, see 3.2 and 3.3 below.
3.1 Agency Records
Records for all transactions, including daily cash drawer
reconciliations, must be kept at the agency in accordance with auditing and
records retention guidelines. Agencies must maintain proper records related
to their petty cash fund approvals, receipts and disbursements.
Accounting software such as QuickBooks, or an electronic journal kept in
Excel or Access can sometimes meet the needs of the agency in recording all
fund receipts and expenditures. Agencies using accounting software for
this purpose must have the system approved by OSC prior to use. In the
absence of accounting software, the journal/register must be maintained
manually, and the physical security of the journals and registers must be
maintained. All internal records must be available for review by OSC
or the state auditors upon request.
Other records that need to be
maintained by the agency include, but are not limited to:
Receipts to document all disbursements of funds, i.e. for purchases from
vendors, post office mailings, or advances for travel or other expenses.
Reconciled checking account statements.
Periodic reconciliations of the fund that include:
i. Detailed counts of cash on hand; and
ii. Cash in bank; and
iii. Advances; and
iv. Receipts for disbursements not yet submitted for
reimbursement; and
v. Outstanding vouchers submitted for reimbursement,
but not yet received.
3.2 Acceptable Uses of Petty Cash Funds
Agencies do not need approval for single expenditures of $100.00 or less
that comply with their agency policy for acceptable uses of petty cash
funds. If the payment amount is between $100.01 - $500.00, the agency's
Chief Fiscal Officer should approve the request. If the payment amount is
greater than $500.00, a CO-1053 must be filled out requesting approval for a
single expenditure. Completed forms should be sent to OSC at
osc.pettycash@ct.gov for approval
along with any documentation to support the request.
A. Funds for small
incidental purchases and reimbursements - Small payments which aren't
feasible to be made through CORE-CT (or the agency's approved financial
system of record) or with the state purchasing card.
B. Funds for Travel
Expenses and Workshops/Conferences - Authorized cash advances for employee
travel expenses for whom such provision has been made in a collective
bargaining or other agreement. To account for the cash advances, the petty
cash custodian must obtain a CO-17XP-PR
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 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 petty cash.
C. Payments to outside contractors - Generally, outside contractors
should not be paid through petty cash and payment should be processed on a voucher
in Core-CT (or the agency's approved financial system of record). 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 payment from
petty cash to outside contractors.
1. Agencies
must obtain a completed IRS W-9 from the payee prior to issuing payment. 2. All reportable payments from the agency's petty
cash account must be summarized and forwarded promptly to the Comptroller's
Central Accounts Payable Division, Special Processing at
osc.1099@ct.gov.
a.
All payments made during the previous calendar year must be submitted to OSC
no later than January 10th. b. Please include the
payee's name, FEIN/SSN, complete mailing address and amount paid to each
vendor during the calendar year.
c.
Forward copies of all IRS W-9 forms. d. It is
each state agency's responsibility to comply with this requirement. Failure
to properly report this information can subject the Agency to IRS penalties
and fines. e. See Section 6.0 Federal
Income Tax Reporting, Form 1099 of the Expenditure Section of this manual
for further details.
3. Checks issued in person
to the payee shall be signed for in a check issued ledger. The
identity of the person receiving the check will be verified by the state
employee issuing the check when the ledger is filled out.
D. 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. If
it is determined that an overpayment has been made by the third-party
Administrator, then a third check would be issued and sent to Department of
Administrative Services.
Please direct questions and inquiries to:
Compensation Issues - DAS/Personnel, Workers' Compensation Unit,
860-713-5002.
3.3 Unacceptable Uses of Petty Cash Funds
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 payments of an allowance
nature (ex. safety shoe, uniforms, etc.) 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 cash.
D. Check cashing
E.
Payroll transactions
should not be processed in petty cash. Contact the Comptroller's Payroll
Division at 860-702-3464 or email to osc.payroll@ct.gov for the proper payroll transaction procedure.
4.1 Reporting of Petty Cash Loss In the event a 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 immediately
notify the local police department or if applicable, local security
division, i.e. campus police, capital police, etc.
B. Upon discovery
immediately complete and electronically submit Form CO-853 Report of Loss or
Damage to Real and Personal Property to: osc.CO-853@ct.gov and
to the Auditors of Public Accounts at CO-853@ctauditors.gov.
If you have any questions regarding the
reporting of losses, you should contact the Office of the State Comptroller
at osc.CO-853@ct.gov.
C. For
replenishment after loss, refer to 2.3 Replenishment of Petty Cash Funds. A
copy of the loss report - 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.
4.2 Recovery of Petty Cash Loss If funds are recovered
directly by the agency, they must be deposited into the state account using
the coding provided below. To deposit these funds, use the
instructions provided in 2.4 Redepositing of Excess Funds or Reducing Petty
Cash Funds.
A. The deposit must include the following accounts
receivable information:
a. Account code 54762 - Petty Cash Losses (crediting the custodial
agency's appropriation for current year recoveries). b. Account code
44410 - Prior Year recoveries. c. Title of Standard Account - "Petty Cash
Loss Recovery". d. Fund number to which deposit is made. e. Agency
business unit
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.
If a petty cash fund disbursement check 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.
5.1 Check Cancellation - Expenditure has NOT been submitted to
Comptroller for reimbursement
A. Void the check and attach it to the stub
in the checkbook.
B. In the agency's petty cash journal, reverse the
original disbursement entry and increase the balance in the account. Explain
the entry in the description column making reference to the cancelled item.
5.2 Check Cancellation - Expenditure has been submitted to Comptroller
for reimbursement and is either 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 check book; 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.
B. When the replenishment is received, you will have excess cash. Follow
the instructions provided in 2.4 Redepositing of Excess Funds or Reducing
Petty Cash Funds.
Internal controls may vary according to the size of the fund, the size of
the agency and varying agency needs. Internal controls should be
memorialized in an agency's petty cash policy or procedures. 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
responsibilities.
B. Petty cash funds should be kept separate from all other funds received
by an agency, except as authorized in writing by the Office of the State
Comptroller. Requests for authorization can be sent to
osc.pettycash@ct.gov.
C. While the authorized balance of the petty cash fund should be
sufficient to adequately meet the needs of the agency, the authorized
balance of the fund should be kept to the lowest amount possible. It is
highly recommended that agencies use a state purchasing card instead of
petty cash where possible.
D. Expenditures should be kept within the restrictions set in section
3.0.
E. Every transaction must be tangibly documented, in accordance
with CGS 3-117(a), 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. Alterations or additions are
unacceptable. Individuals responsible for producing transaction
documentation should not be the same as those verifying it or recording it
in petty cash journals.
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 when required.
G. Petty cash fund custodians must submit to the agency's Chief Fiscal
Officer a monthly status report on the activities of the fund. The report
should include:
Cash on hand
Advances
Date advanced.
To whom.
Reason.
Outstanding vouchers
Not yet submitted for reimbursement.
Submitted for reimbursement.
Total amount authorized
H. A periodic detailed examination of the petty cash fund
should be made by the Chief Fiscal Officer to verify the following:
a. Perform a cash count in the presence of the custodian, to verify that the
cash on hand, cash in bank, advances and unreplenished vouchers reconcile to
the current authorized balance.
b. In addition to the cash, verify
all other items included in the balance such as checks, vouchers, etc.
c. All checks included in the balance are being cashed or deposited
promptly.
d. That checking account bank statements are being
reconciled monthly by a person other than the custodian and/or someone who
has the authority to sign checks.
I. The Chief Fiscal Officer should also examine, at random, checking
account reconciliations for: a) Assessment of
adherence to proper procedures including segregation of duties protocols.
b) Math verification. c)
Receipts compared with deposits. d) Timely
deposits.
J. The Chief Fiscal Officer should also obtain the checking account
statement from the bank and perform a verification of all checks for proper
endorsements and to see that those written during a prior statement period
were listed as outstanding. They should question items that have been
outstanding for more than one month.
All expenditures should be recorded in the fiscal year
in which they occur. A final reconciliation of the account should be
performed prior to June 30 each year. This should be done far enough
in advance to allow for transactions to be processed in Core-CT, before FYE
shutdown, to replenish necessary funds or correct errors found in the
account.
7.2
Annual Reporting A petty cash fund report, CO-928, is required for each
petty cash account, 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 CO-928 Annual Petty Cash report
will be as of June 30th and due in the Office of the State Comptroller,
Central Accounts Payable division no later than August 1st of each year.
A
copy of the June bank statement for the Petty Cash Account must be attached
to the CO-928 Annual Petty Cash Report. The CO-928 form needs to be signed
by the Agency Head or their designated manager level employee. The Prepared
By signature must be different from the authorized signor. If there are any
questions on the preparation of this report, contact the Central Accounts
Payable via email osc.pettycash@ct.gov.
After receiving annual reports from agencies, the Office of the State
Comptroller will select random agencies and conduct full audits of their
Petty Cash Account journals.