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Policies and Guidelines on Handling Petty Cash Fund




The Petty Cash Fund (PCF) is used to cover small expenses i.e., purchases that involves petty amount of money for the day to day operation of an office. While the total amount of the PCF is considerably small, compared to the total amount of funds being held by an office, the Commission on Audit (COA) has prescribed a significant number of policies for the proper utilization of the fund.

What is petty cash fund?

Petty Cash Fund refers to the amount granted to duly designated Petty Cash Fund Custodian (ADAS II) for payment of authorized petty or miscellaneous expenses which cannot be conveniently paid through MDS checks or List of Due and Demandable Accounts Payable – Authority to Debit Account (LDDAP-ADA).

The reimbursable amount which shall be made through a petty cash voucher shall be allowed only for amounts less than 1,000.00 for each transaction except when a higher amount is allowed by law and/or specific authority by the COA. Splitting of transactions to avoid exceeding the ceiling shall not be allowed.




The PCF shall be kept separately from the regular cash advances/collections and shall not be used for payment of regular expenses such as rentals, subscriptions, light and water bills, purchase of supplies and materials for stock purposes, and the like.

The Petty Cash Fund (PCF) to be set up shall be sufficient for the recurring petty operating expenses of the agency for one month. It shall be maintained using the Imprest System. The base characteristic of an Imprest system is that a fixed amount is reserved, which after a certain period of time or when circumstances require because money was spent, it will be replenished.




All replenishments shall be directly charged to the expense account and at all times. The PCF shall be equal to the total cash on hand and the unreplenished expenses. The PCF shall be replenished as soon as disbursements reach at least 75% or as needed.

All disbursements out of PCF shall be supported by cash invoices, Official Receipts (OR), or other evidence of disbursements. For purchases where an official receipts cannot be issued, the Reimbursement Expenses Request (RER) form should be utilized. Reimbursement of incurred expenses is allowed within 1 month of purchase.

Sample Petty Cash Transactions

Generally, petty cash transactions consist of emergency purchases:




PurchasesDocumentary Requirements
1. Supplies (not available at the
Supply Office)
2. Office Load (those only with
approval of PSDS)
3. Gallon/s of Mineral Water
4. Food (for meetings)
Petty Cash Voucher + Official Receipt/ Sales Invoice or RER

+Attendance Sheet+Meal Attendance+Office Memo
Printing of Tarpaulin of activities without project proposal. (Tarpaulin for major events/activities should be included in the proposed budget)Petty Cash Voucher + Official Receipt/ Sales Invoice or RER
Fare for urgent transactions and/or short distances.Petty Cash Voucher + RER + Itinerary + Certificate of Appearance / Authority to Travel
Urgent/emergency of minor repairs of equipment / materials and office facilities as recommended by the General Services Staff of the IT personnel for computer-related repairs.Petty Cash Voucher + Accomplished Repair Request Form and Official Receipt AND
Approved purchase request with certificate of emergency purchase, if necessary, Pre Inspection and PostInspection Report on waste materials in case of replacement or repair.
Payment for labor / services rendered for a short project (1-2 days) (eg. Cleaning of aircon, Plumbing, Electrical)
Others, subject for assessment of the petty cash fund custodian (It is the duty of the custodian to insure that the disbursement is appropriate and is an allowable expense.)Other supporting documents that may be required depending on the nature of expenses such as but not limited to:
Certificate of Inspection and Acceptance
Report on Waste Materials in case
of replacement/repair

The unused balance of the PCF shall not be closed/refunded at the end of the year. The fund shall be closed only upon termination, separation, retirement, or dismissal of the Petty Cash Fund Custodian (PCFC), who in turn shall refund any balance to close his/her cash accountability.

At the end of the year, the PCFC shall submit to the Schools Division Office -Finance Section all unreplenished Petty Cash Vouchers (PCVs) for recording in the books of accounts. The unreplenished PCVs shall be replenished in the succeeding year.

The documentary requirements to support the utilization of the Petty Cash Fund is set forth under COA Circular No. 2012-001 dated June 14, 2012, amended by COA Circular No. 2013-001 dated January 10, 2013.

Reference:

COA Circular No. 2012-001 dated June 14, 2012

COA Circular No. 2013-001 dated January 10, 2013

Cherry Lou D. Repia
Schools Division Superintendent

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