HomeDepartmentsAccounts PayableProceduresChange Fund

Change Fund Procedures

PURPOSE

This section prescribes the policies and procedures relating to the establishment, administration, and discontinuance of change funds.


General Definitions

Change funds are used for the operation of cash registers and drawers throughout campus, and to provide change for these drawers when needed.

CHANGE FUND CUSTODIAN: The employee who has been authorized to increase/decrease the change fund and who is directly responsible for the administration of the change fund.


Security of Change Funds

POLICY
Deans/Directors/Chairs are responsible for the proper safeguarding of change fund monies entrusted to their departments. Cash must be kept in a locked container such as a fire-proof file cabinet, safe, or other suitable device to which unauthorized access is difficult.

The change fund custodian is personally responsible for the cash which was specifically entrusted to him/her. Therefore, access to the fund must be limited to the custodian.


Establishing a Change Fund

POLICY
The custodian is responsible for ensuring the cash on hand and receipts equal the authorized amount of the fund at all times. To balance the fund, use the Petty Cash/Change Fund Reconciliation form. Change funds must be kept separate from all other funds, such as petty cash, personal funds. These funds are subject to periodic audits.

PROCEDURE
The Department Chair/Director submits the following items to the Manager of Banking Operations and Auxiliary Accounting for approval:  

  1. A memorandum justifying the need for a change fund and designating the fund custodian. This should include the identification number and an original signature of the custodian.  
  2. A check request payable to the designated fund custodian in the amount requested. The check request should include the department name and must be approved by the Department Chair/Director.  
  3. The department custodian will receive a check payable to him/herself and the current procedures. The check may be cashed at the Cashiers' Office or, for larger amounts, at a local bank.  

Transferring Change Fund Custodianship

 POLICY
The Department Chair/Director for which a change fund has been authorized is responsible for ensuring Accounting Services is informated of changes in change fund custodians.

PROCEDURE

  1. When a new custodian is to take charge of the change fund, the former custodian must count and verify the fund is equal to the amount authorized, by filling out the Petty Cash/Change Fund Reconciliation form. Likewise, the new custodian must also count and veify the fund before he/she conducts any new transactions from these funds. 
  2. The Department Chair/Director sends a memo to the Manager of Banking Operations and Auxiliary Accounting which indicates:
    • removal of the former custodian from the fund  
    • the new fund custodian's name and identification number  
    • signature of the new custodian

Increasing/Decreasing/Closing Change Funds

PROCEDURE
Increasing a change fund: When additional change funds are needed, the Department Chair/Director sends a memorandum to the Manager of Banking Operations and Auxiliary Accounting justifying the increase. A check request must be submitted payable to the fund custodian in the amount of the requested increase.

Decreasing a change fund: A change fund should be reduced if the amount of the fund exceeds the actual needs of the department. The amount which is no longer needed should be deposited at the Cashiers' Office, crediting the original index with an account code of A001, along with a memo indicating the fund is being decreased.  

Closing a change fund: When a change fund is no longer needed, the fund custodian should count and verify the amount equalis the authorized amount. This amount must be deposited at the Cashiers' Office, crediting the original index with an account code of A001, indicating the fund is being closed.  

Change funds must NEVER be deposited into a revenue account code.  



Horizontal Rule
MTU
- Accounting Services
Copyright 2005, Michigan Technological University.  All Rights Reserved.
Michigan Technological University is an Equal Opportunity Employer/Educational Institution
This page created by Bryon Freeman.