Finance Procedure 4.22 PETTY CASH PROCEDURE - SERVICES

Finance Procedure 4.22 PETTY CASH PROCEDURE - SERVICES FP4.22 Version 003 Mar 15 1.0 INTRODUCTION Nugent Care wishes to minimise the amount of monies spent via Petty Cash and ensure that a robust and secure system exists for administering petty cash throughout the business. It is recognised however, that it is not always possible, or indeed practical for all items of expenditure to be invoiced and paid directly via the internal purchase ledger system (POP). This procedure, as detailed below, will provide stakeholders and service user s guidance on the situations where it is deemed appropriate to pay for goods or services via petty cash, and the underlying procedures to be followed when operating the petty cash system. It should therefore be stated that the practicalities of using a petty cash system should only exist when there is no alternative means of making purchases through POP. 1.1 USE OF PETTY CASH The circumstances and rules surrounding the use of petty cash will vary depending on the nature of the expenditure required. The aim of minimising the amount spent via petty cash should be kept in mind at all times when seeking to purchase goods or services and value for money should be sought in all opportunities when committing to purchase. In general terms, the use of petty cash is the most practical payment method in situations where the amount is small and either: the supplier is not used on a regular basis the supplier deals in cash only transactions emergency/exceptional situations It has been agreed that Nugent Care will adopt an imprest petty cash system whereby periodic top-ups will be used to replenish any float back to its original authorised value once funds are low and operationally inadequate. FP4.22 Page 1 of 9 Mar15/ver03

2.0 RESPONSIBILITIES Nugent Care s Financial Controller has overall responsibility for ensuring that petty cash is properly managed and administered in all establishments and that this procedure is strictly being followed. The Home/Project Manager at each service is responsible for ensuring that all monthly financial reconciliations and checks are carried out by the local Finance Administrator or in the absence of, the appointed custodian and that all petty cash top-up requests have been completed and authorised correctly, and in accordance with Nugent Care s cash handling procedures. The service Finance Administrator is responsible for ensuring that petty cash is fully managed and administered in line with this procedure, and that any discrepancies or deviations are brought to the attention of the Home/Project Manager and the Assistant Financial Controller in the first instance. Staff members responsible for the day to day administration of petty cash are required to ensure that this procedure is followed and any discrepancies or deviations are brought to the attention of the Finance Administrator and the Home/Project Manager locally in the first instance, who will then be responsible for forwarding this information onto the Assistant Financial Controller. 3.0 REFERENCES The following forms referred to in this procedure are available in the Forms & Guidance section of the website: Petty Cash Float Request Form Petty Cash Delegated Authority/Key Holder Form Petty Cash Expenditure Summary Sheet Petty Cash Weekly Reconciliation Sheet (Electronic) 4.0 PROCEDURE 4.1 Authority to hold a petty cash float and to change float levels Requests to operate a petty cash float must be made formally in writing to the Financial Controller on a Petty Cash Float Request Form by a manager at the level of Home/Project Manager or higher within the organisational structure. The request must detail the operational need for holding a cash float on site and the level of float required. The Financial Controller will authorise the issuing of a float if the request is deemed operationally justifiable and will also define the cash amount to be provided. FP4.22 Page 2 of 9 Mar15/ver03

Any subsequent request to increase or decrease the size of an existing petty cash float must be made in writing to the Financial Controller by way of a completed and signed Petty Cash Float Request Form by a manager operating at the level of Home/Project Manager or higher in the organisational structure relating to that particular service. Any request must detail the operational rationale for the proposed change irrespective of whether it is an increase or decrease to the original amount granted. The Financial Controller will authorise the increase/decrease in the cash float if the request is deemed operationally justifiable. 4.2 Purchases from petty cash As noted above, the rules surrounding the use of petty cash will vary depending on the circumstances and the nature of the expenditure in question. In general terms, the limits for transactions administered from petty cash should not exceed 50 in total per claim, although this limit can be extended in an emergency or exceptional situation, and only then with the written authority of the Home/Project Manager or Senior Manager within the organisation. All written authorisations in these instances should be retained for audit and management inspection. 4.3 Prohibited expenditure Petty cash must not under any circumstances be used for personal purposes such as the cashing of personal cheques, payment of salaries or wages, personal loans, payment of non-related business expenditure It should not be used to make employed staff reimbursements on which an income tax (benefit in kind) liability may be considered. These may include travel expenses, working lunches, subsistence, phone contracts as examples, although not an exhaustive list. Staff are not permitted to use personal loyalty cards when making purchases for Nugent Care. Reimbursements under these headings should be submitted under the general procedure for reclaiming general expenses as part of the monthly payroll process and fall outside the scope of petty cash. 4.4 Petty cash security All petty cash floats must be kept at all times in a lockable designated cash box and stored in an on-site safe* where available, or alternately should be kept at all times in a locked drawer where no safe exists at the location. FP4.22 Page 3 of 9 Mar15/ver03

Under no circumstances are monies to be left un-attended and readily accessible to others, by means of storing anywhere other than the designated secure locations as listed above or readily leaving keys in the box, for example, which may give rise to unauthorised access. Any removal/addition of cash for the purposes of banking or payments must follow the correct release procedures as outlined below (Sections 4.6, 4.7 & 4.11). The Home/Project Manager will identify who will holds operational responsibility for administering the petty cash system at the location including designated key holders (custodians), and therefore will ultimately hold authorised access. The Home/Project Manager should aim to identify individuals required to be able to fully meet the operational needs around the clock at the location for petty cash requirements. Staff members with the assigned level of authority should be formally identified and must complete a Petty Cash Delegated Authority/Key Holder Form which should be signed off by the Home/Project Manager and a record held centrally within Head Office finance, as well as locally on site, for periodic review and audit purposes. All original signed forms should be returned to the Assistant Financial Controller for secure holding, clearly showing the staff members name, position and signature, as well as the date. Should a designated key-holder misplace or lose their respective keys, then they must make a disclosure to the Home/Project Manager and Assistant Financial Controller immediately so suitable arrangements can be put into place to reduce any potential unauthorised security breach. Where there is more than one member of staff responsible for administering the petty cash system, the Home/Project Manager must ensure that there is a formal, recorded procedure to check the balance and to hand over the petty cash from one authorised member of staff to another as needs arise, particularly during periods considered outside of normal office hours. The room where the petty cash is stored must be kept locked out of hours unless operationally required during unsociable hours, in these instances the petty cash box must still be kept within its agreed secure location and locked at all times. Under no circumstances should there be an attempt to store monies anywhere other than as defined in accordance with this procedure - this also includes any attempt to operate sub-floats at the location that have not been previously agreed in accordance with this procedure. FP4.22 Page 4 of 9 Mar15/ver03

In the event of any additional float being required, this should be treated as a completely new request and the requesting procedure followed accordingly. For the avoidance of doubt, the following scenarios are strictly forbidden as defined in this policy, and any attempt to undertake any one of the below may be deemed a disciplinary issue in accordance with current HR procedures: Accessing petty cash when you have no delegated authority Attempting to borrow or lend monies from petty cash to staff or service users Any payment request/made for personal items (as defined above under prohibited expenditure ) Any attempt to process fraudulent claims for reimbursement Failure to follow the overarching petty cash procedures including providing suitable documentation for reimbursement and auditory purposes. Failure to report the loss or theft of keys to the petty cash float(s) Knowingly and attempting to conceal any variances that may have occurred during the course of using the petty cash Reporting inaccurate reconciliation information to central finance 4.5 Receipts All claims for petty cash must be reimbursed via an original receipt from the supplier in question, giving full details of the goods or services purchased and showing, the following details: Supplier Name/Address Date of purchase Description of goods or services bought Cost of goods or services bought Any claim for reimbursement where no receipt can be provided, will be deemed null, void and un-payable unless the claimant submits a written explanation of the nature of spend and reasons no valid receipt can be produced, this must then be signed off as a valid claim by the Home/Project Manager before any payment is issued. All authorised written explanations must be retained for audit and management inspection as required. Any claim for reimbursement where the receipt provided is illegible, or does not include the aforementioned requirements as above as supporting evidence, will be deemed null, void and un-payable. FP4.22 Page 5 of 9 Mar15/ver03

4.6 Issuing petty cash Each petty cash box held on site will hold the authorised cash float, a set of duplicate carbon voucher books for supporting evidence of payments made and audit purposes, alongside the Petty Cash Expenditure Summary Sheet which should remain securely locked in the box at all times. Each petty cash voucher should be used in sequence, ensuring the carbon print is in place to record payments when processed. Any spoiled vouchers should be retained, and a copy kept for internal records before proceeding onto the next voucher in sequence. All receipts provided in any claim MUST be signed and verified as authorised expenditure by the line manager of the claimant, or an authorised delegate in their absence such as a deputy, before any payment is made. When making reimbursement each voucher MUST evidence the signature of the authorised custodian and that of the claimant, and the top copy voucher removed from the book and provided to the claimant to retain for their records. 4.7 Petty cash advances In some instances it may be necessary to provide an advance of petty cash prior to making a purchase, where it may not be accurately known the exact level of expenditure required, for example food items from a supermarket. In these instances, a reasonable level of money may be advanced to cover the purchase and the process should ensure this is accurately recorded. A voucher should be issued for the level of the advance which must be signed by both the custodian and recipient, and any advance should be formally authorised in writing by the Home/Project Manager prior to any advance being made. Any change provided together with the purchase receipt should total the amount spent and must be returned to the petty cash custodian as soon as is practical, this should be no more than 3 working days after the advance was provided. Upon the point of return, the original voucher should be amended to reflect the return of the monies and the authorised receipts, and again signed by both the payee and claimant to complete the process. 4.8 Recording of petty cash Petty cash custodians should ensure accurate records of all petty cash expenditure/deposits are recorded on the Petty Cash Expenditure Summary Sheet as and when expenditure is incurred. FP4.22 Page 6 of 9 Mar15/ver03

The sheet will provide a running overview of all current items of expenditure incurred since the last reconciliation completed, and will also provide a template for which to support accounting entries into Nugent Care s finance software Open Accounts, and the final month end reconciliations. This most up to date sheet should be retained at all times within the locked petty cash box and any replaced copies retained locally. 4.9 Petty cash reconciliation To ensure accuracy in the recording of all petty cash expenditure and any imprest deposits that have been made, it is good practice to ensure that the petty cash is reconciled each Monday morning, where any discrepancies can be identified quickly and dealt with. The Finance Administrator at each location, or appointed custodian in the absence of, should complete the reconciliation and sign the Petty Cash Expenditure Summary Sheet and also complete the supporting electronic Petty Cash Weekly Reconciliation Sheet as evidence of the reconciliation having been completed. Both sheets should be printed and signed as accurate and correct by the Home/Project Manager, and copies retained for audit and management review as required. A copy of the electronic Petty Cash Weekly Reconciliation Sheet should be sent to the Assistant Financial Controller each week by the local Finance Administrator (or custodian in the absence of) for initial review once any reconciliation has taken place. Any discrepancies should be reported in accordance with the guidelines stated earlier within section 2 of this procedure. 4.10 Petty cash float - Imprest reimbursements On a monthly basis it may be necessary to replenish the float value back to the agreed value if expenditure has been incurred. The Finance Administrator at each location will review the values of payments made out in the month by way of vouchers, and a supporting copy of the monthly reconciliation stating the current balance. Once it has been established what value is required to restore the float back to the agreed limit (which should equal the amount of vouchers paid out), the Finance Administrator should then complete a cheque requisition form for that value in accordance with Nugent Care s normal process for cheque requisitions. The cheque when issued should be signed by two authorised signatories from the location. FP4.22 Page 7 of 9 Mar15/ver03

Once all paperwork is completed and authorised, the cheque can be cashed at the bank and the resulting monies used to replenish the petty cash float back to its pre-agreed value. Any monies used to replenish the value of the float should be signed in by way of a voucher, by both the custodian and the Finance Administrator to ensure the audit trail is complete. It may be necessary to periodically provide replenishment before month end as a result of a high level of in month spending, in these instances the above procedure should still be adhered to. 4.11 Month end procedures In the absence of a local Finance Administrator, the transactional information should be sent to Central Office Finance for completion and adherence to procedure as noted within this section (4.11) It is the responsibility of the Finance Administrator at each location, to ensure that all financial transactions are accurately recorded with the finance software, Open Accounts and month-end procedures followed. Any cheque payments issued in the month should be recorded as a manual cheque. A general ledger journal should be used to code all relevantly incurred expenditure in the period which should be reconciled back to the petty cash expenditure summary sheet, of which a copy should be attached to the relevant journal for audit purposes. The Finance Administrator should review any postings made for accuracy, and ensure that the float holding balance on Open Accounts (balance sheet control account) demonstrates a true reflection of the current position at that location. Any discrepancies within Open Accounts, should be investigated by the Finance Administrator and reported to the Assistant Financial Controller should further assistance be required. 4.12 Audit visits Due to the potential nature of risk that exists when dealing exclusively with cash, Nugent Care will carry out planned, and unplanned, audit checks at each location throughout the year which may be undertaken by anyone, or a combination of, the following roles within the finance department at Head Office: Financial Controller Assistant Financial Controller FP4.22 Page 8 of 9 Mar15/ver03

Internal Auditor The aim of these visits will to ensure adherence to this, and any relevant accompanying financial procedures when dealing with physical cash on site. FP4.22 Page 9 of 9 Mar15/ver03