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Travel Advance Account and Petty Cash Account (APS 010)

FPP A.044

Background

Definition/Introduction

A petty cash account is a set amount of money held outside the state treasury to be used for the purposes specified in Government Code, Sections 403.241-403.252. The account can be funded from any method of finance used by an agency. Each state agency that establishes a petty cash account must follow internal agency guidelines and procedures for state officers and employees regarding travel advances and/or petty cash accounts. The following guidelines, requirements and procedures must be followed in creating and accounting for travel advances and petty cash accounts.

Bond Coverage

Bond coverage may be purchased to ensure adequate protection for all agency assets, including travel advances and petty cash accounts, according to Government Code, Sections 653.001-653.012.

Purpose of Petty Cash Account

A petty cash account may be established and used for:

  • Making change of currency.
  • Advancing travel expense money to state officers and employees.
  • Making small disbursements where formal expenditure procedures are not cost-effective.
  • Any similar purpose or combination of purposes a state agency considers prudent for conducting state business.

Accounting for Petty Cash Account

Government Code, Section 403.245 states:

  • The creation of a petty cash account is not an expenditure of state money or a reduction of appropriation.
  • The replenishment of a petty cash account is an expenditure from the corresponding fund and will be drawn from the appropriation the expenditure would otherwise have been made from.

Monetary Limits for Petty Cash Accounts

Per Government Code, Section 403.246, the monetary limits for each type of petty cash account are:

  • A petty cash account established for changing currency may not exceed $500.
  • A petty cash account established for making minor disbursements by the central office of a state agency may not exceed $1,000.
  • A petty cash account established for making minor disbursements by offices other than the central office of a state agency may not exceed $500.
  • A petty cash account established for advancing travel expense money to state officers and employees may not exceed one-twelfth of a state agency’s travel expenditures in the immediately preceding fiscal year.
  • A petty cash account established for a purpose or a combination of purposes the agency considers prudent for conducting state business may not exceed the amounts determined by the Comptroller’s office as necessary for the efficient operation of the agency.

Exceptions to Petty Cash Monetary Limits

The monetary limits in Government Code, Section 403.246, apply to all state agencies and petty cash accounts except as noted in Section 403.252:

  • State agency funds located outside the state treasury.
  • The petty cash accounts maintained by the Department of Mental Health and Mental Retardation or its successor agency under Health and Safety Code, Section 533.037(d)(4).
  • Imprest funds kept by enforcement agencies for the purchase of evidence or other enforcement purposes.