Control of petty cash

Due to the low value nature of petty cash it's an area which can be very susceptible to fraud - a single £5 payment could easily fly under the radar but multiple of these over the course of a number of years will soon add up so it's important that there are controls in place to monitor petty cash.

These are normally written down in a formal procedure so everyone involved is clear about their responsibilities.

A potential procedure could be:

1. On taking over the petty cashier should ensure the petty cash book balances, any discrepancy should be referred to the accounts supervisor immediately.
2. At the beginning of each period the petty cashier should ensure petty cash has the correct imprest amount.
3. Petty cash is to be kept secure under lock and key
4. Petty cash vouchers (in number order) should be providable on request
5. Petty cash should be paid out correctly:
   1. Vouchers should be signed by the person receiving the money
   2. Voucher signed by person authorising the payment
   3. Receipts must be provided
   4. Amount being claimed is within the authorised limits
6. Petty cash book is prepared (including VAT if appropriate) - it is important that this is accurate
7. Petty cash vouchers need to be stored safely, these will need to be retained for any audits
8. Unannounced checks of petty cash can happen at any time - this is checking the amounts of vouchers plus cash held equals imprest amount
9. At the end of each period petty cash should be balanced
10. The person who looks after the double entry system needs to be given the expenses totals so these can be entered into the double entry system
11. An amount withdrawn from the bank should be equal to the payments made to restore the imprest
12. The petty cash book needs to be presented to the accounts supervisor for checking
13. Discrepancies are to be dealt with promptly