PROCEDURES / INSTRUCTIONS. Petty Cash Imprest

Transcription

1 PROCEDURES / INSTRUCTIONS Petty Cash Imprest Updated for admin info only Date: 10/8/2011

2 Contents 1. Financial Regulation 1 2. Opening an Imprest Account 2 3. Using Imprest Account Cheques 3 4. Handing Out Cash What constitutes a Receipt? 5 5. Key-holder Responsibility 7 6. Monthly Return - Instructions for use of Spreadsheet 8 7. Key Points to Remember 15

3 Financial Regulation The complete Financial Regulations and Current Corporate Financial Process Rules and Standards (CFPRS) are available on the intranet at Printed copies should also be available at all sites for inspection if required. The rules and guidance governing Petty Cash are CFPRS 15 beginning on Page 61. The CFPRS covers the responsibilities of named Imprest holder and the named substitute holder when the main holder is absent; these are summarised below. To obtain and retain vouchers to substantiate each payment from the Imprest (wherever appropriate an official receipted VAT invoice must be obtained). To make adequate arrangements in his/her office for the safe custody of the float (petty cash should not be removed from the office). To produce on demand, to the City Treasurer cash and /or vouchers to the total of the Imprest. To reconcile and balance the Imprest once a month (a copy of the reconciliation sheets to be signed and retained by the Imprest holder). To ensure that the Imprest is not used to cash personal cheques or for the making of loans to staff. To ensure that the cash in hand is counted by 2 members and signed for on the monthly cash sheet The Petty Cash Imprest is only to be used for the purchase of small items and not for single purchases over 50. It is not acceptable to write several cheques for the same thing so that no one cheque breaches the 50 limit (unless previously approved by finance or falls within the audit list of exemptions). Any breach of the limit should be approved by finance BEFORE the purchase is made

4 Opening an Imprest Account 1. If a genuine business case for having a petty cash can be substantiated, a request is made to the appropriate Finance team for a Petty Cash Imprest Account to be opened. 2. If the request is approved a Standard Business Current Account Application Form needs to be completed. This form contains specimen signatures of staff who can sign the cheques. 2 signatures are required on each cheque but I would suggest that your signatory list contains at least 3 to cover for staff absences etc. The form also contains the requested Imprest level and the Post Office that is to be used to cash the cheques at. This form needs to be completed and returned to the appropriate Finance team. 3. A bank account will then be opened at the Co-Op in Exchange Walk, which will be credited with the initial value of the Imprest. A cheque book will be supplied to the Imprest Holder and Bank Statements will be sent to them by the bank on a monthly basis. 4. The Imprest Account is then ready to be used. 5. If any of the signatories change due to staff leaving/moving etc then a Change of Signatories on non Personal Accounts Form needs to be completed and returned to the Finance team. This form can be obtained from the banking team. PLEASE DO NOT SIGN THE AUTHORISED BY SECTION AT THE BOTTOM OF THE FORM, this needs to be signed by an approved member of staff in Finance. 6. Once in use the monthly Petty Cash sheets need to be sent to Finance. This will enable the bank account to be reimbursed by the value of the payments made out of the Imprest. The monthly Petty Cash sheets must to be returned on a strict Monthly basis as soon as possible after the end of the month. They should be signed by one of the authorised signatories to the account. Failure to comply with this request on a regular basis will be viewed as a breach of Financial Regulations and could lead to the closure of the Imprest Account. 7. If the amount of the Imprest is insufficient for continuing needs; after a change in circumstances for instance when new teams join an established site, please contact the Finance Analyst, by , stating reasons for the increase request and the amount required. This additional amount if approved will be added to your bank account. This should only be done for permanent changes in Imprest not short term measures. For any changes to your bank account as stated above please contact Gemma Smith (64183) or Lesley Knott (64190) in the banking team who will be able to send you the relevant forms

5 Using Imprest Account Cheques The system is to be used for purchases of a minor or emergency nature and the limit in normal circumstances is 50 per individual transaction. Payments above this limit should, be made using a purchase order number using the usual purchasing methods. 1. Cash is obtained from your nominated Post Office by writing a cheque out payable to CASH. The cheque should not be for more than 500 as this is the agreement with the Post Office. More than one cheque can be cashed at one time if necessary but should not take your safe over its insured level. 2. In some cases a cheque can be used to pay the supplier but again the 50 limit applies. You cannot write several 50 cheques to cover one invoice. 3. Whenever a cheque is used it is imperative to write the following details on the cheque stub as they will be required for the monthly reconciliation. Date Amount Payee (Who the cheque is to or CASH) Initials of employee who signed the cheque 4. When a cheque is paid direct to a supplier the details should be entered onto the Petty Cash Expenditure Sheet immediately. 5. When a cheque is used to obtain cash you should record it as follows: Description Paymt Vat Cost Account Gross Type (Cheque Number) Q NX XXXX Amount of chq Cash from bank C NX XXXX Amount of chq Only enter the Cheque Number on the Q line and narrative Cash from Bank on the C line. 6. Cash in hand should be kept to a minimum working level and must not exceed your approved safe limit or 250 where no safe is available. 7. Certain exceptions to the 50 limit have been agreed with Internal Audit. Any additions to the list of exceptions below will need to be approved by Audit. Please bear in mind that petty cash is for emergency money and for items that can not be paid in any other way. For things that can be planned in advance please use a more appropriate method as payment such as a purchase card or through the procurement team. This would include things like, non emergency furniture and clothing, planned days out, large shopping trips, things bought online amongst many other items. Any requests for further exceptions to the list below which cannot be paid any other way should be made with reasons to the Director of Finance. Exceptions are:- TV licences Holidays and outings Clothing Practical social training Independent living - 3 -

6 Boarding out payments Personal allowances Section 17 payments Religious Festivities costs Personal needs 8. In exceptional circumstances the only option may be to use petty cash for items above 50 that have not been exempted. Please contact Finance if you need to exceed the limit, if agreement is given please mark the petty cash return as appropriate. Permission will not be given to pay invoices this is to be done using the accounts payable procedure. Please bear in mind that having a Petty Cash Imprest does not give you access to additional funds, it is simply a different means of paying for items that are a charge to your existing budget

7 Handing Out Cash What constitutes a Receipt? Each employee is accountable for the proper use of Public Money and to demonstrate this accountability it is essential that receipts are obtained for all Petty Cash payments. So when ANY cash is issued from Petty Cash a receipt MUST be obtained. In the case of purchases from shops, receipts are obviously important if the goods prove to be defective in any way. They are also critical for the recovery of VAT see below. Each receipt should have a Petty Cash Disbursement slip attached detailing the Business Unit and Object Account the Amount should be coded to and the signature of the Budget-holder that this is genuine and approved expenditure. If there is no code or the Budget-holder has not signed or a proper receipt has not been provided then the cash MUST NOT be handed over. Check that the correct manager signature is on the form, it is not acceptable to be told the Manager agreement will be obtained at a later date. When the cash is handed over to the recipient they should sign the slip to confirm receipt. If a customer signature is also needed do not allow the form to be taken without taking a copy for your records. This can be replaced at a later date when the customer signed form is returned to you. The types of receipts that are acceptable would include : o Till receipts from shops ones which show VAT numbers and amounts of VAT separately. o Parking Tickets o Bus/Train/Tram tickets o Approved sheets for clothing allowances, bus fares, School meals, pocket money o Practical social training sheets o Section 17 receipts o Boarding out receipts NOTE: A Credit or Debit Card slip is never acceptable. Most types of retail outlets will issue receipts as a matter of course. If a receipt is not offered then one should be requested on official forms if possible. This will also apply to things such as taxi fares. If you ask when paying for the goods many major outlets will provide a VAT receipt. In the case of special types of receipts such as those listed above i.e. Section 17, Practical Social Training, it is imperative that these are completed fully and correctly and are also legible. This applies to amounts; signature of person receiving the cash; signature of ultimate recipient of the cash; and signature of the person authorising the payment.the correct completion of these forms of receipt is a cause for concern as there are still a number of forms that are not completed either fully or correctly at present. Public money is at risk if proper procedure is not complied with. If you obtain a receipt that you may need for a guarantee please keep the original receipt on site and send a photocopy in with your return. Value Added Tax (VAT) Certain items of expenditure claimed through Petty Cash include VAT in the purchase price, for accounting purposes it is necessary to show the VAT element on the Petty Cash return. It is obviously in all our interests to reclaim as much input VAT back as possible as it maximises the Council s spending power and the use of your Budgets. Some companies/shops give receipts that show the cost of goods plus VAT so all you need to do is to enter the gross cost of the goods in the appropriate column on the monthly return. The VAT should then be automatically recorded in the VAT column on the return. If a purchase is being made after the money - 5 -

8 is handed out the VAT code NX should be used and then updated when the receipt is handed to you if appropriate. If a VAT number is not shown on the receipt from the supplier you will need to ask for the Supplier s VAT number and then write it on the receipt. The inclusive VAT will be calculated automatically once the total amount and the VAT code is entered. As a General Rule VAT cannot be reclaimed unless receipt identifies the seller, their VAT number and the goods purchased. For items less than 10 in value VAT can be assumed even if a VAT receipt is not available but only for the following- Telephone calls from public or private telephones Purchases made from coin-operated machines Off street car parking charges Below is a summary of the VAT treatment of common small purchases, but remember the general rule above. Standard Rated Food Items Any heated food and drinks (eg McDonald s, Sausage rolls etc) Confectionery, not cakes Biscuits wholly or partly covered in chocolate Ice cream, ice-lollies, frozen yogurt, water ices and similar Cold beverages Alcohol although this should NEVER be purchased with Council money unless as a cooking ingredient for Adult Meals. Potato crisps, sticks, puffs and similar Salted or roasted peanuts Food delivered by an external catering organisation Stationary Off street parking Admission costs for leisure activities Sale of clothing designed for ages 14 years and over Restaurant meals Greetings cards Zero Rated Food Items Cold/raw food is generally zero rated with noted exceptions above Biscuits with no chocolate Cakes (including Jaffa Cakes) Sandwiches and other cold take away food Tea bags, coffee powder and milk Cold meat including cooked meat Other Purchases that DO NOT have VAT Bus, tram and train fares Clothing designed for children up to 13 years old On-street parking cards Postage stamps Printed books, newspapers and maps TV Licence Purchases from a seller who is not registered for VAT (E.g. Part time Taxi drivers) - 6 -

9 Key-holder Responsibility At each site/office ONE PERSON accepts responsibility for the safeguarding of the Petty Cash. Although In some offices it is more practical for this to be a shared responsibility. This responsibility includes: the safe keeping safeguarding cash and cheque books ensuring that the keys to the safe/tin are kept safely issuing of cash and cheques collection of valid receipts for all cash/cheques issued reconciliation of the Bank Statement completion of monthly spreadsheet timely submission of the monthly return to Finance at Sandfield Centre. How this responsibility is exercised will vary between sites and in some cases it will obviously be impossible for the responsible member of staff to deal with everything personally. Where this is the case the person responsible must ensure that they are satisfied with the arrangements that are in place for the issuing of cheques etc in their absence. In some establishments the cash/keys will need to be handed over when staff go off duty etc. Where situations such as this exist proper arrangements must be in place to ensure that the cash is balanced and signed for by the officer taking over responsibility

10 Monthly Return Instructions for use of Spreadsheet The spreadsheet should be completed on a timely basis. This should be done at least at month-end when the reconciliation is done or more often if there are high volumes of transactions. It does help to keep a daily written rough book of the numbered transactions for quick reference and to check on remaining cash levels. In order to complete and reconcile the spreadsheet and balance it you must ensure that you have the following:- 1. All valid receipts for items paid out. To include a Petty Cash Disbursement slip correctly completed. 2. The completed cheque book stubs. 3. The months Bank Statement. 4. The actual cash. 5. Records of any advances or sub-floats. The spreadsheet is one report, you must not copy out sheets from it to use on a stand-alone basis, do not rename sheets or change the page set-ups or columns or rows. The only areas you can complete or amend on the spreadsheet are the YELLOW sections. All pages must be completed every month. For ease you can keep a template with some of the recurring data as detailed below, but you must use a blank template each month and input all of the non-recurring data. INPUT TO THE SPREADSHEET 1. Open the template save it with an appropriate name e.g. PCJan Start by ensuring all of the opening/standing data is correct; Summary - Bank Account Number - Select service ASH (for Adults) or ChS (for Childrens) - Contact Name and Telephone Number Detailed Expenditure Analysis - Official Title of Account e.g. Hounds Gate - Imprest Amount (for your team/site these differ) - Floats Start balance if you have any (Closing from prior month) - Bank Start Balance (Closing Balance plus reimbursement from prior month) - Cash Start Balance (Closing Cash from prior month) This is the figure used for the Cash Start Balance for the following month These 2 figures added together are the Bank Start Balance for the following month You may want to put some of this information (excluding balances as they will change) onto your blank template to save re-inputting it each month. You will be prompted on the various sheets any if omissions are made

11 The Front Sheet information will automatically be carried over from information entered on the other sheets. DO NOT COMPLETE OR SIGN THIS FORM, IT IS FOR THE PAYMENTS TEAM TO SIGN 3. Collate all receipts issued up to the month end and number them consecutively. Enter each on onto a new line in the yellow shaded section on the Detailed Expenditure Analysis sheet. Date - use a recognised MS Office format i.e. dd/mm/yy or dd-mm-yy DO NOT use full stops Detail give a brief description of the expenditure ie S.17 & child s name S17 B/O & child s name Boarding out FIN 1 form (presently yellow) LCA & child s name for Leaving Care Allowance B/O B DAY & child s name for Child in Care birthday money B/O XMAS & child s name P/C Gilead St postage - plus cheque number if paid that way. for Child in Care Christmas money For Petty Cash with whatever the item for the miscellaneous purchase is Voucher Number as numbered by you Payment Type C=Cash Q=Cheque VAT The current standard rate of VAT is 20% so use code HX and use NX if no VAT;. This is liable to change from time to time so the others if needed are CX if 15%; FX if 5%; SX if 17.5%: (please note that as a new spread sheet came out recently the VAT rating used on the example is different) BU The business unit code to which it is to be coded. This identifies the site or team budget the payment is made from. Special Note Do not try to input both an Order No and BU. See error messages below Object Code where it is to be coded. This identifies the breakdown of the type of expenditure. Gross Total paid out 4. Check the error column O at the end of the Expenditure Analysis sheet. You may get the following error message. Enter on Summary Sheet meaning that the BU & Object combination have not been entered onto the summary sheet yet when you have done this the error will disappear

12 Note: On the summary sheet the first two sets of columns are for BU & Object Account codes, and the third column is for Order No & Object Codes. Once the summary has the BU and Object Codes entered for the first time you can copy this data onto your blank template and save it for future use remembering only to paste data into the yellow shaded cells, always using Special Paste or the formula will not be carried over. Then you should only get the error message when there is a new combination of Business Unit and Object Account that you have not used before. If you find that you cannot enter an Order No, Business Unit or Object Code which you feel is valid please contact finance to check it s validity and if necessary have the list of valid codes amended. It may need to be added onto the Code Validation tab for you to be able to use it. 5. Go through all of the cheque book stubs and check that all items entered above that were paid by cheque have Q in the Payment Type column and the Cheque Number is referred to in the description. 6. For each cheque written in the month check that it has cleared the bank, if it has tick the stub to indicate you have checked this if not then you will need to enter these onto the bank reconciliation sheet later. All cheques written in the month must be entered onto the sheet regardless of whether they have gone through the bank, if they have not then they need to go on the Bank Reconciliation sheet too not instead

13 7. Enter cheques used to obtain cash into the same yellow section of the Detailed Expenditure Analysis as follows: Description Paymt Vat BU Object Gross Q NX XXXX Amount of chq Cash from bank C NX XXXX Amount of chq Enter ONLY the Cheque Number on the Q line and narrative Cash from Bank on the C line. These cheque numbers should then be entered onto the Summary Sheet in the section titled CHQS CASHED TO REPLENISH FLOAT 8. On the Bank Reconciliation sheet enter the month end bank balance in the yellow box indicated. Then enter any reconciling items, firstly any cheques that have not appeared as cleared at identified in 6 above. Then any prior month s imprest that has not yet been reimbursed. Print off this sheet and reserve. Overdrawn balances only are shown in brackets. 9. Count the actual cash (this should be the same as any rough book amount you may have and the amount in the Cash Balance column of the Detailed Expenditure Analysis sheet), input the amount and the amount of any floats into the appropriate boxes on the Cash Statement sheet. Print the sheet, write your name clearly in the box and sign it where indicated to verify you have counted it. Get someone else to count the cash again, write their name in the appropriate box and sign that they have checked it. Put the sheet with the Bank Reconciliation

14 10. Return to the Detailed Expenditure Analysis sheet and check for error messages in K509-K511. If any error messages appear rectify the problem and re-check. If the bank or cash balances do not balance before contacting Finance who will assist please ensure that: All expenditure has been recorded all receipts have been entered All advances and changes to floats have been recorded All unpresented cheques and replenishments outstanding have been recorded on the Bank Reconciliation That the opening balances are correct from last months sheets That the cash, advances and bank balance have been entered correctly Check that all Business Units and Object Accounts are selected from the list and contain no spaces. 11. Once this is balanced go to Detail Print Version and select P from the drop-down box in cell A5 then press print or go to file print. Put this sheet(s) with the others

15 When balanced, these two figures should be the same 12. Go to the Summary sheet check rows 58 and 60 for INCORRECTs, if everything else above has balanced correctly and all error messages mitigated there should not be any items INCORRECT in these rows. If there are items that exceed the 50 limit it will say so in row 59, please ensure that these items are either specifically exempt or have been approved by Finance. 13. Print the Summary Sheet. Sign this and have it checked and signed by another team member. 14. Print the Front Sheet do not write anything on or sign it as this sheet is for Finance use only. 15. Bundle all paperwork in the following order and staple. 1. Front Sheet (Do not sign or write on this sheet in any way) 2. Summary 3. Detailed Expenditure Analysis 4. Bank Reconciliation 5. Photocopy of the month s Bank Statement 6. Cash Statement 16. Place the bundle and all of the receipts in a large envelope and put an orange Petty Cash Returns Do Not Open sticker on. Send it to: Childrens and families fianance 1 st Floor Loxley house Station Street Nottingham NG2 3NG FAO Kylie Richardson/ Maria Rufayi 17. Save the return and it as an attachment to the appropriate payments team at the address on the Front Sheet either adults.pettycash@nottinghamcity.gov.uk or childrens.pettycash@nottinghamcity.gov.uk. You may want to retain a paper copy too but this is up to you

16 Dealing with outdated cheques Cheques are only valid for six months, after this time they are no longer useable and need to be removed from the Imprest and the unpresented cheques section of the Bank Reconciliation. An entry should be raised for each cheque in the Detailed Expenditure Analysis List as the last entry/ies at the end of a month. A Money Returned slip can be used for the full detail of who the cheque was payable to etc if you wish, but not essential. It does not need entering in you written Cash Book. The Imprest entry should read outdated chq no.dated This should have the Q reference, relevant VAT code, original number, and the Budget Code details from the original entry. The amount should be bracketed to reduce the Imprest, as the money will have been re-imbursed at the time of the cheque and should now be refunded. Example:- 30-Jun Jun- 08 Hudson outdated chq Q HX EDKB (7.00) Simms outdated chq Q NX EDKB (70.00) The entry can then be left off/deleted from the Unpresented Cheques section of the Bank Reconciliation

17 General Points to Remember 1. No income should be paid into a Petty Cash Imprest Bank Account, if it is then contact finance ASAP. 2. Never mix Petty Cash money with either your personal money or that from Client Accounts or that from Social Funds. 3. Under no circumstances should money be borrowed or personal cheques cashed from money held in Petty Cash. Failure to observe this will be viewed very seriously. 4. All entries on documents (Disbursement slips, forms etc) should be in ink, not pencil. 5. The key(s) to safe(s) must be kept on the person of the member of staff on duty who has authorised access to the safe/cash tin. Keys to the Petty Cash tin must not be left on keyboards or in drawers, they should be kept as securely as possible. 6. Wherever practical the petty cash spreadsheet should be used rather than manual recording, though a rough book is useful for instant reference. 7. Personal Store Loyalty Cards are not to be used for purchases on behalf of the City Council.(See memo dated 25/11/1998). Likewise with personal Credit Cards. 8. Staff bus passes should not be paid through Petty Cash. A form is available from Finance. The completed form should be sent to Finance who will arrange payment through Payroll to avoid any tax complications. 9. Subsistence claims for staff should not be paid through petty cash but should be submitted to Finance on properly authorised and completed subsistence claim forms. 10. All transactions should clearly state whether the items are purchased for staff or clients or service users. 11. Items over the 50 unless specifically excluded should be notified and approved by Finance BEFORE purchase, again refer to new purchasing system. 12. The use of Corporate Contracts is not optional, it is mandatory as stated in City Council Financial Regulations. 13. All receipts should be returned (in full, without parts cut off) at the month end along with a bank statement. Do not send in your return without these or it will cause a delay in your reimbursement. 14. Children in care gift receipts should always be returned along with the front sheet correctly filled in. 15. If an original receipt is needed for warranty purposes then please keep this on site and send a photocopy in with your return. 16. If you have a nil return one month please Kylie Richardson or Maria Rufayi with your centres name and bank number stating that you have no return. 17. If you only have a few returns please still send them to finance at month end so entries into your ledger are made on a timely basis and to help prevent receipts getting lost or forgotten about