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Bank Reconciliations
Division of Financial and Business Services

About Petty Cash: Opening and Settling a Petty Cash Account

Petty cash is money advanced to a department from the petty cash account, issued in the name of an employee who is to be the custodian in the form of a university check (there is no direct deposit option when establishing the initial petty cash fund). Petty cash is intended to cover small-dollar university purchases and expenses. The petty cash funds should always be kept in a locked drawer or safe.

Because the university offers several payment options that are more secure and less expensive for all parties to administer, such as the P-Card and TravelPlus Card, petty cash may only be issued with Senior Business Officer approval. Payment Services maintains an SBO Table ( ), which can be referenced for a list of Senior Business Officers authorized to approve cash advances and petty cash.

Opening a Petty Cash Account

To open a Petty Cash account, please login to Kuali and submit a 'DV' Disbursement Voucher with the payment code 'establish petty cash' selected.

Replenishing Petty Cash

To replenish a petty cash fund, itemize petty cash expenses using the Disbursement Voucher Quick Expense (DVQE) process. Applicable receipts must be attached to the DVQE to substantiate the business expense(s). The amount itemized will be reissued to the department’s petty cash fund custodian to replenish the fund.

More than one department account may be charged to replenish petty cash, including accounts different from the one initially established. Replenishment can be made via direct deposit.

More information about replenishing petty cash may be found on the Payment Services website ( ).

Settling Petty Cash

Upon termination of employment, changing departments within the university, or closing the petty cash account, the employee must either close or settle all petty cash accounts. If the petty cash account is not closed, the account must be transferred to another university custodian approved by the Senior Business Officer. In either case, Bank Reconciliation must be notified of all changes to the petty cash account.

To close or settle a Petty Cash account, the total amount of cash must be deposited with the University Cashier Merchant Window (located in the Credit Union) to account 19-1506-0000, object code 71000. Attach all supporting documents related to petty cash to the Cash Receipt under the "Notes & Attachments" tab and note the following information:

  • Custodian name
  • Departmental account number
  • Original opening amount
  • Original check number
  • Date petty cash account was established
  • Kuali DV eDoc#

If the petty cash fund has a mix of cash and receipts, the receipts must be treated as a reimbursement and converted to cash. Closure of a Petty Cash account is done via cash receipt only. Receipts or checks will not be accepted or processed by Bank Reconciliations.

Petty Cash Requests
  • Petty Cash may only be issued to an employee.
  • Petty Cash may not be established in the name of a student employee or non-employee.
  • A sponsored project account may not be used to establish a petty cash fund.
  • The maximum petty cash amount per custodian is $500.
  • Petty Cash may not be used to pay for 'Human Subject Fees'.
Petty Cash Restrictions:

Please check the Expenditure Manual for the most current list of restrictions
(go to: USC Policies Website , look under "Administrative and Business Practices", under "Expenditures". ):

  • PERSONAL USE RESTRICTIONS - Under no circumstances may petty cash or cash advance funds be used to pay for personal expenses, including expenses that are part business and part personal.
  • LOST OR STOLEN FUNDS - Replenishment of a petty cash fund or settlement of a cash advance due to theft must be accompanied by a copy of the police report and approved by the applicable Senior Vice President.
  • EQUIPMENT RESTRICTIONS - Neither petty cash nor cash advance funds may be used to purchase Equipment. Reference Purchasing Services Policies and Procedures (pdf) for Equipment definition and purchasing requirements.
  • HUMAN SUBJECT FEES - Funds required for human subject fees should be requested in the form of a cash advance request. Petty cash may not be used to pay for human subject fees.
  • AIRFARE RESTRICTIONS - Neither petty cash nor cash advance funds may be used to purchase airline tickets. This practice is not allowed, principally for insurance reasons. Travelers who need the university to direct-pay airline tickets should use an Internal Requisition through a Contract Travel Agency.
  • THIRD PARTY PAYMENT RESTRICTIONS - Neither petty cash nor cash advance funds may be used to pay a third party for services rendered (e.g. independent contractor, caterer, photographer, etc.). This practice is not allowed, principally for tax reporting and insurance reasons (Purchasing Services Policies and Procedures (pdf)).
  • PROMOTIONAL AND PRINT RESTRICTIONS - When petty cash or money from an advance is used to purchase promotional items or printed material that bear the university's name, logo or seal, the purchase must be made in compliance with policies governing proper use of the university's trademarks (Purchasing Services Policies and Procedures (pdf)).
  • AGREEMENT SIGNING RESTRICTIONS - When petty cash or money from an advance is used to purchase items or services subject to a written procurement agreement, the agreement must be executed by an approved procurement agreement signer (Purchasing Services Policies and Procedures (pdf)).
  • TAX REQUIREMENTS - Transactions subject to California sales tax that were not charged tax using the petty cash or cash advance funds will assessed the tax using the USC account number associated with the expense report. The tax will post on journal entry (XX-025R).
  • INSURANCE AND LICENSE REQUIREMENTS - Certain suppliers, such as caterers, equipment repairers, etc. are required to have specific types of insurances and industry licenses, given the high-risk nature of their services. Individuals using petty cash or cash advance funds are responsible for ensuring that suppliers performing work for the university have the required licenses and insurances (Purchasing Services Policies and Procedures (pdf)).