PETTY CASH PROCEDURE. January 2016

Transcription

1 PETTY CASH PROCEDURE January 2016 SEDA 2015

2 TABLE OF CONTENTS Section 1:... 2 A Procedure Control Framework... 2 A1. Procedure Owners... 2 A2. Roles and Responsibilities.2 B Relevant Legislation... 2 C Related Policies and Strategies... 2 D Glossary of Terms... 3 Section 2: Petty Cash Procedure Introduction Procedure Objectives Procedure Scope Key Procedure Principles Establishment of Petty Cash Facility Duties and Responsibilities General Petty Cash Management Non-Compliance to Procedure... 7 i

3 SECTION 1: A1. PROCEDURE OWNERS A1.1 The custodian of this procedure is the Chief Financial Officer. A2. ROLES AND RESPONSIBILITIES Roles and responsibilities are as follows: Chief Financial Officer is accountable for the effective implementation of this procedure; Senior Manager: Finance is responsible for maintaining and monitoring of this procedure; Seda Executive Management Committee (EXCO) to approve the procedure; and All Seda employees to execute the procedure. B RELEVANT LEGISLATION The following regulations and legislation as amended from time to time have reference: Public Finance Management Act, 1999 Treasury Regulations, 2001 as amended C RELATED POLICIES AND STRATEGIES The procedure should not be read in isolation. It is supported by a number of policies, frameworks and strategies that play an important role in the effective application of this procedure. It is supported by a number of policies, frameworks and strategies that play an important role in this procedure. Examples of these are listed below: Seda Supply Chain Management procedure Subsistence, Travel and Entertainment Policy Any other related legislation applicable 2

4 D GLOSSARY OF TERMS Phrase Advance Personal advance Private expense Meaning Receiving of cash from Seda upfront to be used for business purposes. The advance payment of petty cash for private or personal purposes. The payment of private or personal expenses. SECTION 2: PETTY CASH PROCEDURE 1. INTRODUCTION Petty Cash procedure is created to provide an efficient means of making payments where the normal financial systems cannot meet specific requirements for such expenditures. National Treasury guidelines prescribes that goods and services that are not repetitive and are below the specific amount may be procured by means of petty cash. Petty cash should not be used to bypass the normal procurement of goods and services. Purchases should not be split in order to procure for values within the petty cash threshold. 2. PROCEDURE OBJECTIVES The purpose of this procedure is to ensure that the petty cash funds of the Small Enterprise Development Agency (Seda) are safeguarded, managed and controlled effectively, efficiently and transparently in accordance with this procedure, other Seda policies, guidelines and other applicable legislations. 3. PROCEDURE SCOPE This procedure applies to all Seda s officials (employees), and contraventions of this procedure will lead to disciplinary action taken by Seda. The procedure sets out the principles, terms and conditions and the procedures governing the issue, use, administration and retention of Seda petty cash facilities. 4. KEY PROCEDURE PRINCIPLES The following fundamental principles form the basis for the understanding and successful implementation and management of the procedure: 3

5 4.1 Transparency. 4.2 Fairness. 4.3 Effectiveness and efficiency. 4.4 Economical. 5. ESTABLISHMENT OF PETTY CASH FACILITY Any Seda office that requires the establishment or increase of a Petty Cash facility must forward a submission to the Chief Financial Officer or a delegated official for approval. All petty cash facilities must be reviewed and confirmed on an annual basis by the CFO or a delegated official. 6. DUTIES AND RESPONSIBILITIES 6.1 Chief Executive Officer The Chief Executive Officer of Seda is accountable for the management of effective, efficient and transparent systems of financial, risk management and internal control. The Chief Executive Officer may delegate these responsibilities to a responsible official. 6.2 Supply Chain Management Supply chain management is responsible for updating the petty cash limit from time to time on the Supply Chain Management procedure whenever the National Treasury adjust the amount. 6.3 Financial Accounting The Financial Accounting unit together with Provincial Managers are responsible for the safeguarding of petty cash, replenishing, issuing of advances and processing of claims and monthly reconciliations. 6.4 Provincial and Branch Managers The Provincial and Branch Managers respectively are responsible for the safeguarding of petty cash, conducting spot checks cash counting and review monthly reconciliations. 7. GENERAL PETTY CASH MANAGEMENT 7.1 ADVANCES Personal advances shall not be granted from petty cash. 4

6 7.1.2 The maximum pay-out per transactions is R The purpose of the advance should be documented on the petty cash requisition Petty cash advances must be returned within seven (7) days from date received while used in the office, and when travelling, before expiry of seven (7) days from the return of the business trip Advances not cleared after ten (10) days will be deducted from the salary with an administration fee of R50 per advance, and this constitute a financial misconduct that warrant steps to be taken against the respective employee by the line manager CLAIMS AND PROCESSES The petty cash process must adhere to the following: All goods and services that should be procured through normal procurement process should not be paid for or procured through petty cash Petty cash should be used to pay for small emergency/urgent items, thus not to purchase items that could be inventory or assets The following goods and services even though repetitive may be acquired through the use of petty cash: Catering for small meeting Petrol for hired vehicles Toll gate slips and parking costs Flowers for the hospitalized employee Cleaning agents Lunches served in meetings like interviews, committees (the allocated amount is limited to R100 per person (breakfast and/or lunch), refer to the S&T policy for more details) No payment with regards to remuneration of employees may be paid from petty cash The acquisition of goods and services which are repetitive in nature and from the same supplier shall not be purchased through petty cash even if below R2 000 in value as a contract should be considered for such goods or services All petty cash payments must be within the threshold unless approved by a delegated official Petty cash may be replenished at any time during the month if 50% or more of the facility is used up Each replenishment must be supported by a proper reconciliation. 5

7 7.2.9 A claim for the meeting/interviews as well as invitation/itinerary for business related expenses should be accompanied by the names of the people attendees. The supporting document must be approved by the line manager before a claim is submitted Petty cash should not be paid out without a properly approved petty cash requisition, clearly indicating the purpose of the request Petty cash reconciliation must be supported by receipts or any proof of payments for all the money used All petty cash claims (with no advances) must be reconciled and submitted within two (2) months from date of purchase, after which will result in a no claim or refund The petty cash times for issues and request is between 9h00-10h00 and 14h00-15h All petty cash requisitions should be approved by a responsible official with the necessary delegation of authority All processed receipts should be stamped PAID CONTROLS AND SAFEGUARDING Branch Manager/ Provincial Manager/ Financial Manager to assess the risk of transporting cash from the bank to the office, and where riskier, a suitable service provider must be appointed. Petty cash must be kept in a lockable safe at all times Spare keys for the safe and storeroom should be kept separately by two independent employees, who will only in the absence of the petty cash custodian access the safe. Prior proper authorization should be obtained and the two independent employees must count cash immediately and document the results and signoff These two independent employees should not be able to access the petty cash amounts individually without the assistance of the other. The petty cash custodian should be the only person that is able to access the petty cash amount individually at a point in time for internal control purposes If the person handling petty cash will be absent, the petty cash must be counted and reconciled by the person handling petty cash and the person relieving the person who handles petty cash. Both parties must sign for the count to acknowledge and confirm the amount of cash and invoices handed over. 6

8 7.3.5 Only one person (custodian) must be responsible for the petty cash at any given time Petty Cash money must be kept separate from other monies e.g. cash receipts from the debtors At each month end and other irregular intervals, the petty cash must be counted by an independent person from the person handling the petty cash Results of all schedules and random cash counts should be documented and filed Petty cash losses should be investigated, corrective action be taken by the relevant line manager. The CFO will authorize those losses after receipt of the investigation report. 8. NON-COMPLIANCE TO PROCEDURE 8.1 Transgression of this procedure constitutes financial misconduct and the Seda Disciplinary Code will apply. 8.2 Disciplinary action can be taken against any employee who transgresses this procedure (in terms of regulation 33.1 of the Treasury Regulations). 8.3 Treasury Regulation section If an employee is alleged to have committed financial misconduct, the Chief Executive Officer of the public entity or line manager must ensure that an investigation is conducted into the matter and if confirmed, must ensure that a disciplinary hearing is held in accordance with the relevant prescripts The Chief Executive Officer or line manager must ensure that the investigation is instituted within 30 days from the date of discovery of the alleged financial misconduct. 7