PETTY CASH POLICY

  1. Introduction

The purpose of this policy is to clarify the arrangements for the holding of, payment from, topping up and accounting for petty cash. It also provides information to keep staff safe when banking cash.

  1. What petty cash CAN be used for

Petty cash is supplied to parts of the organisation for the purchase of small items that cannot await payment by cheque or BACS, but only where they are legitimate charitable expenditure. It may be used for:

  • Supplying coffee, milk, tea and sugar for staff, visitor and client use.
  • Purchasing items for housekeeping, ie. mops and buckets, washing up liquid.
  • Small items for events (although clear budgets will be put in place and income from the event and bingo should cover costs).
  • Stationary items up to £10.
  • Volunteer expenses but only where a form has been completed in line with the company’s expenses policy and these must be supported by mileage claims and/or receipts. The manager of the service must sign the expense claim and the petty cash slip to authorise the expenditure. The volunteer must also sign both the expenses claim and the petty cash slip so that we can evidence that the volunteer has received the money.
  1. What petty cash CANNOT be used for:

Petty Cash cannot be used when another method is more appropriate as follows:

  • Through an equipment request form i.e. Equipment over £100 – such as a computer, furniture or other objects that assist you in your work. You need to make a written request to the Chief Executive via your line manager and, subject to budgets; the item will be ordered and supplied to you. This must be done via the office so that we can maintain an equipment inventory recording what has been bought, why and where it is held.
  • Through your monthly expenses claim i.e. Claimed in accordance with our Expense Policy. To include; travelling expenses, drinks and a meal. Please note this list is not exhaustive.
  • Through payroll i.e. Wages
  • Through the office i.e. Building materials and Contractors. Please ask them to invoice the office. Cash in hand is not acceptable.
  1. Expenditure that cannot be claimed

The following are not legitimate expenses or deductions and cannot be claimed through petty cash:

  • Cigarettes. Under no circumstances should cigarettes be supplied to clients or staff. Headway Devon is here to promote the health and wellbeing of clients.
  • Loans. Under no circumstances should funds be lent to clients, staff or volunteers. There are organisations that can support people in crisis and we are here to support clients in accessing them e.g. instead of giving a client money for food, take them to the food bank.
  1. What to do with income (this must be kept separate from your expenses petty cash)
  • Any income must be recorded on a separate takings sheet and be kept in a separate container and locked away.
  • Once a week a detailed record of takings should be sent to head office, showing what the receipts are for, and, if relevant, who paid it (i.e. if it relates to client payments).
  • Receipts for income must be given and staff should ask the person making the payment to countersign the income sheet or rent book if the payment is for payments other than café purchases.
  • At least once a week, preferably more regularly, income should be banked, with no more than £500 carried at any one time. See section 5 below re security regarding carrying cash.
  • Money from income must not be used for any expenditure and must be kept separate from petty cash.
  1. The procedures to follow
  • Cash must be held securely in a locked cabinet or safe and shall only be accessed by the key holder.
  • Petty cash is to be managed on an impress system. This means that:
  • Cash in the container +vouchers for expenditure = agreed petty cash float
  • Cash will only be topped-up based on cash expenditure incurred to bring the amount up to the agreed float limit.
  • Petty cash expenditure can only be claimed on provision of a valid invoice or receipt but in such cases the appropriate line manager must also counter-sign the claim to evidence validity of spend.
  • Amounts of more than £25.00 must be authorised by an appropriate line manager independent of the staff member making the claim.
  • Generally petty cash should only be issued for expenditure already incurred i.e. you should have a receipt. A petty cash slip must be written out stating in detail what the purchase is for, the receipt must be stapled to this and you must sign the petty cash slip.
  • A member of staff nominated to look after petty cash must sign the petty cash slip and count out the money owed, give it to the person making the claim, ensuring any change and the petty cash voucher is put back in to the petty cash container.
  • Where this is not possible, then a petty cash slip needs to be completed stating how much is being taken and what it is for. Write “Receipts to follow” on the petty cash slip. A member of staff nominated to look after petty cash will then count out the amount required and both members of staff will sign the petty cash slip. The receipt and change should be returned to the petty cash container as soon as possible, normally by the end of the day. The receipt should be attached to the original petty cash slip and the change returned should be recorded on the slip. The nominated staff member must check that:
  • Receipt(s) + the change = the money originally taken from petty cash.
  • Any difference must be investigated immediately. Both staff members should initial the petty cash slip.
  1. Keeping Safe.

The safety and security of staff is of paramount importance. When taking money to or from the bank:

  • Ensure that it is not carried in a way that advertises what you are doing i.e. not in a cash bag
  • Tell another member of staff what you are doing and check in with them once you have returned safely.
  • Try to vary the time of day that you go and the route you take.
  • Try to vary the nominated person going to the bank where possible.
  • If you feel vulnerable ask someone else to go with you.

These procedures are to protect Headway Devon and its employees. They are designed to ensure that you are protected from being accused of theft or fraud. Contravention of these procedures could result in serious disciplinary action. If you do not understand any aspect of the procedures please contact the Executive Assistant or the CEO for clarification.

  1. Handling Clients’ Cash

In exceptional circumstances, we can hold some cash for a client in the office. The money is paid into our bank account and the cash is withdrawn and kept in a tin (each client has their own tin).

Cash can then be issued to the client by completing a cash form and the money will be issued by a member of finance staff. It may also be issued to a carer if they need to pay for something on behalf of the client, by completing the cash form and providing receipts.

All monies going in to or out of Headway’s bank account is recorded in Sage and the tins are reconciled every month. Each client for whom we handle cash has their own code on Sage.

June 2017 AM