Special Examination of
Petty Cash Management
April 1999
Executive Summary
The Director of Services and Systems of the Corporate Comptroller's Branch requested a review of the current processes and accountability of petty cash management of the Department mainly in the National Capital Region. The purpose of the examination was to review current practices and processes in the handling of petty cash and to assess the accountability of the staff in relation to the petty cash handling processes and ensure that proper controls are in place. Furthermore, the review team was to determine the type of service being provided and evaluate the need for such a service.
Summary of Findings
- While petty cash custodians are generally following policies defined in Chapter 2-11 of the Treasury Board manual, specific policies, procedures and guidelines have not been formally communicated to them.
- From the listing of the 163 petty cash funds administered by the department, we noticed that one petty cash fund was in excess of the maximum limit of $2,000.
- There was no activity in 29 of the 78 petty cash funds maintained in the National Capital Region. The number of replenishments requested by custodians varies greatly from one fund to another, as does the annual turnover of the various funds.
- Our review of the two petty cash funds maintained in headquarters in the Financial Services Division demonstrated that payments from petty cash are kept below the maximum permitted under Treasury Board Policy and are made for small miscellaneous payments when immediate settlement is required.
- There is no written documentation to identify eligible or ineligible expenses.
- The use of acquisition cards has significantly reduced the type and volume of expenses processed through petty cash. The expenses that are processed are for the most part for expenses that could not be incurred through the use of acquisition cards. Since acquisition cards cannot be used to obtain cash advances there will exist a continuing need for the use of petty cash funds.
- The petty cash funds that were reviewed in detail are kept in a locked box, which is in turn protected in either a combination safe or locked filing cabinet.
- The Manager, Physical Security and Emergency Planning recently prepared a report concerning the theft of funds in Headquarters Financial Services Division. One of the recommendations contained in that report was adopted. The remaining two recommendations should be given serious consideration by management.
Management Action Taken
The department has substantially implemented the recommendations of the audit. Periodic reviews and checks are being conducted on a systematic basis and follow-up reports will be provided to Senior Management. Security has been strengthened considerably with the adoption of the electronic access to special purpose areas. Further security enhancements are included as part of our plan to renovate the Comptroller's Branch accommodation.
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Date Created: 1999-04-30
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