Monthly Checklist Series

MONTHLY CHECKLIST SERIES

Petty Cash Counts, Too

Some people may not know what to look for when reconciling petty cash and reviewing its controls. Checks and balances should exist in handling, distributing and keeping records. Here is a simple checklist to verify your client’s or company’s safeguards. Don’t forget to count!

1. Are authorized personnel utilizing official petty cash slips for specified expenses or purchases?

2. Is each slip signed by the recipient?

3. Is each slip approved by the recipient’s supervisor?

4. Are original receipts attached for all purchases?

5. Is the petty cash kept locked in a safe place, such as a special cash drawer, with limited access to the key?

6. Are any of the petty cash slips received and approved by the same person?

7. Is the custodian the same person who signs the check, or are any of the checks signed by and addressed to the same person?

8. Are any of the replenishment checks above the established petty cash balance?

9. Are any travel- and entertainment-related expenses paid through petty cash?

10. Should any purchases have gone through the regular accounts payable process for a more thorough review and stringent approval process?

If you answered Yes to the first 5 questions and No to the last 5 questions, you have adequate petty cash controls in place.

Source: Anita F. Geter, CPA, CIA, lead auditor in the internal audit department of Smurfit-Stone Container Corp., Chicago, and a member of the Chicago Chapter of the National Association of Black Accountants. Her e-mail address is ageter@smurfit.com.