(A) Purpose. This policy details the establishment of petty cash/change funds in various departments of the city and provides for operating rules and procedures for reimbursing petty cash expenses and replenishing the petty cash fund(s).
(B) (1) Petty Cash Funds will be established for the following departments to improve operational efficiency and reduce the level of paperwork and manual effort involved in executing minor expenditures:
(2) Petty Cash Funds:
(a) City Clerk (Mayor’s Office): $100.
(b) Recreation Department: $100.
(c) Police Department: $100.
(C) (1) Change Funds will be established for the following departments to provide for adequate monies to make change for customers making cash purchases:
(2) Change Funds:
(a) Recreation: $600.
(b) Building: $150.
(c) Mayor's Court: $101.
(d) Finance (Utilities): $125.
(D) The following rules apply to operation of the Petty Cash Funds of each department:
(1) Custodians of petty cash funds must be designated by department heads to monitor funds and insure compliance with all procedures. Custodians will be responsible for any losses incurred in petty cash funds due to non-compliance with procedures or improper security.
(2) Petty cash advances or reimbursements shall not exceed $25.00 per transaction. Transactions are not to be artificially split to keep reimbursement requests under the $25.00 limit. The city is tax exempt and every effort should be made to avoid paying sales tax on purchases. The petty cash custodian and/or Finance Director may elect to not reimburse employees who pay sales tax on a continual basis.
(3) Petty cash advances or reimbursements shall be authorized only for transactions having a proper public purpose. Expenses unrelated to city business are not to be processed through petty cash.
(4) Petty cash advances or reimbursements must be supported by a valid receipt submitted to the custodian by the individual requesting the use of petty cash. Receipts must readily identify the nature of the purchase; reimbursements cannot be co-mingled with personal expense items on receipts. Petty cash requests unsupported by appropriate receipts are to be rejected by the petty cash custodian.
(5) Petty cash is not to be used in place of the regular purchasing process. Advances or reimbursements are to be approved only for items that are not recurring in nature. Petty cash reimbursement or advance requests that could be administered through the purchasing process without undue hardship should not be approved by the custodian.
(6) Petty cash funds may be used in one of two ways:
(a) An employee purchases an item for $25.00 or less and submits the appropriate receipt to the petty cash fund custodian for reimbursement; or
(b) A cash advance for a proposed valid petty cash expense of $25.00 or less is given to the employee who then returns with a receipt and any change due (difference between advance and actual price).
(7) Petty cash custodians should document the date of each transaction and the name of the employee who initiated the transaction. In that custodians have responsibility for their respective petty cash funds, any areas of questionable expense should be brought to the attention of the Finance Director before funds are expended.
(E) Replenishing Petty Cash Funds. Custodians should replenish petty cash when the remaining available cash is 50% or less of the initial petty cash fund balance. Custodians should file a requisition with the Finance Department in the amount of any replenishment, and should support the request with all documentation from transactions that have been processed through petty cash. Finance will process a check in the amount of the approved replenishment; have the check cashed at a financial institution, and present the custodian with funds equal to the approved replenishment. The Finance Department will document any inappropriate use to the department head and petty cash custodian. Repeated inappropriate use may result in the petty cash custodian being held responsible. The Finance Director may request reimbursement from any employee who was paid for inappropriate transaction by the petty cash custodian.
(F) The following rules apply to operation of the Change Funds of each department:
(1) Change funds should only be used for providing change to customers making cash purchases. Use of change funds to make petty cash purchases is strictly prohibited.
(2) Change funds should be reconciled at the close of business each day and any shortage or overage should be timely reported to the Finance Department.
(3) Progressive disciplinary action should be taken against any employee who is repeatedly responsible for shortages and/or overages up to and including repayment of shortages and/or termination.
(G) Amendments. If necessary for the operational efficiency of the city, or for the safety of taxpayers, customers, or employees the Finance Director may approve deviations and or amendments to this policy as needed. Any amendments should be presented to Council no less than annually, if needed.
(Res. 2019-77, passed 5-20-2019)