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I. OBJECTIVES
a) The Internal Auditor shall conduct monthly surprise cash counts in the presence of
the Cash Custodian, Accounting Assistant, the Finance Manager, and a witness who
is a member of said audit team.
b) The surprise cash count shall be documented, and in case of an adverse finding, the
Management, shall be furnished a copy within five (5) days from date of cash count.
In case there are no adverse findings, Cash Count Reports shall be furnished
quarterly.
If upon conduct of surprise cash count by the Internal Audit, and Cash Overage is
discovered, the following shall be done:
a) The Accounting Assistant shall locate the difference between the Cashbook and the
cash count. Meantime, said overage shall be booked as ACCOUNTS PAYABLE. Entry
would be: Debit CASH ON HAND and Credit ACCOUNTS PAYABLE.
b) If after a month, such discrepancy cannot be traced, the amount of overage shall be
booked by the Accounting Assistant as OTHER INCOME. Entry would be: Debit
ACCOUNTS PAYABLE and Credit OTHER INCOME.
IV. CASH SHORTAGES
Shortages discovered during SURPRISE cash counts being conducted shall be treated as
follows:
b) If the involved amount is more than P100 but less thanP500, said shortage shall
be booked as Accounts Receivable against erring officer/staff and MUST be paid
in the next payday nearest to the discovery of the Shortage.
c) When the shortage is more than P500, said shortage shall be booked as Accounts
Receivable against erring officer/staff and MUST be settled in equal semi
monthly deduction from the payroll for a reasonable period, but not to exceed
12 months.
d) If upon investigation, shortages are being incurred due to willful act of the
person in charge, that is, due to dishonesty, such shall be a ground for
administrative sanction for first offense, as follows:
I. OBJECTIVES
II. CUSTODIANSHIP
A Petty Cash Fund (PCF) amounting to FIVE THOUSAND PESOS (P10, 000) is hereby set up to
enable departments to make emergency purchase and take care of minor disbursements
where a purchase order is not cost effective or impractical, consisting of day-to-day
expenses amounting to not more than ONE THOUSAND PESOS (P1, 000).
A Revolving Fund (RF) amounting to FIFTY THOUSAND PESOS (P50, 000) is hereby set up for
payment of operational expenses not exceeding P10, 000. The RF may also be used for other
minor disbursements exceeding the PCF limit of P1,000 but not more than P10,000 provided
however that the disbursement is limited to the following:
c) For payment of food, drinks and other incidental expenses during meetings,
production & delivery activities, after-office-hours staff work, and other similar
group activities
d) For disbursement of cash advances for travel and other minor expenses
e) For other transactions where cash is the mode of payment that is most practical,
convenient and beneficial to the Company.
The funds are established at the time of approval and shall be maintained on imprest
system. At any given time, the total cash on hand and the un-replenished disbursements
should be equal to the amount of the fund. Expenditures must be within the policy and it
may not be used to circumvent current and existing purchasing procedures.
The RF shall be in the custody of the Cashier or, in the absence of the cashier, the
designated custodian; while the PCF shall be in the custody of the Administrative Officer or
the designated custodian. Access to and responsibility for each of the funds is limited to the
respective custodian who shall be under the supervision of the Finance Manager only in as
far as their custody of funds is concerned.
III. REPLENISHMENT
The Treasurer shall release the replenishment funds based on the Disbursement Voucher
duly approved by the Finance Manager and supported by duly audited Replenishment
Summary for PCF or RF, as the case may be, together with the duly approved PCF/RF
Vouchers. Check Disbursement Vouchers for the replenishment must be approved
accordingly based on the amount.
The RF and the PCF may be replenished by the Treasurer every end of the month regardless
of the amount disbursed for purposes of matching income and expenses monthly through
preparation of the income statement.
a) The custodian is responsible at all times for the appropriation and safekeeping. Fund
shall be secured in a locked device or vault, and should not be commingled with
personal and any other funds.
b) He shall keep accurate records of the fund. PCV/ RV shall be properly monitored and
accounted.
c) He shall be personally accountable for the fund until all the funds/ or valid receipts
have been audited by Internal Audit and account closed by Accounting Department.
V. REGULAR CASH COUNT OF THE FUNDS
The Cashier/ Custodian daily ensures the cash per count sheet tally with the cashbook,
witnessed and verified by his superior/ Manager.
VI. ACCOUNTING PROCEDURES FOR PETTY CASH FUND AND REVOLVING FUND
The imprest fund system is the one usually followed in handling petty cash and revolving
fund transactions. The pertinent accounting procedures are:
a) A check is drawn to establish the fund. The check is given to the petty cashier or any
responsible officer.
b) Payment of expenses out of the fund- No formal journal entries are made. The petty
cashier generally requires a signed petty cash voucher for such payments and simply
prepares memorandum entries in the petty cash journal.
c) Replenishment of petty cash payments- whenever the petty cash fund runs low, a
check is drawn to replenish the same. The replenishment check is usually equal to
the petty cash disbursements. It is at this time that the petty cash disbursements are
recorded as follows:
It is to be pointed out that the petty cash and revolving fund disbursements should
be replenished only by means of check and not from undeposited collections.
Cash in Bank XX
Petty cash fund/ Revolving Fund XX
a) A Petty Cash Voucher (PCV) is required for disbursement from the Petty Cash Fund
(Refer to ANNEX A)
b) Revolving Fund Voucher (RFV) is required for disbursement from the Revolving Fund
(Refer to ANNEX B).