It is in the State’s best interest to use cost effective payment methods and to avoid the expenses associated with the State’s traditional voucher payment process. State agency managers are required to develop and implement small dollar payment procedures using one of the following preferred payment methods for small dollar purchases:

• Purchasing cards (P-cards)
• Travel cards (T-cards)
• Petty cash or travel advance accounts for items that cannot be paid with a credit card.

This section describes the guidelines concerning the use of a cash advance and the required documentation.

Petty Cash (Advance Account Code 59001)

The petty cash advance account can be used for the following purposes:

1. Provide change when a Business Unit collects fees, charges for services or provides change for clients' and inmates' cash accounts.
2. Provide cash to outgoing inmates and clients.
3. Provide cash for subpoena fees.
4. Purchase materials, supplies or services where the amount of a single purchase does not exceed $250. Separate invoices under $250 from one vendor may be combined with one petty cash check being issued in an amount over $250.
5. Pay for invoices that exceed $250 if the merchandise received is less than $250 but the amount of freight charged makes the total payment over $250.
6. Pay for small claims up to a maximum of $75 for non-tort claims pursuant to Section 8 (12), (12e) and (12f), and up to a maximum of $250 for tort claims pursuant to Section 8 (12a) of the State Finance Law.
7. Provide payroll corrections to employees in an amount not to exceed the full amount of their net salary due. Corrections may not be used for individuals hired under contract, temporary service or for lost payroll checks. All advances should be repaid within 14 days or upon receipt of the employee’s salary check. Please see ‘Personal Service (Payroll) Corrections’ within this section for additional information.
8. Make partial payments against purchase orders as long as they do not exceed $250.
9. Pay for out of pocket purchases of necessary supplies, materials or services.
10. Pay for food and refreshments. In addition to the documentation the OSC requires Business Units to maintain for all advance account transactions (outlined below), OSC also requires Business Units to maintain the names and titles of participants, and the business purpose of the event.
11. Pay for meetings, conferences, etc. OSC requires Business Units to maintain the same documentation as outlined above for food and refreshments.
12. Pay for Notary Public fees.
13. Pay for tuition. Business Units must maintain a copy of the governing policy document(s) (e.g., agency policy, union agreement) that promulgate the portion of the tuition reimbursed along with other sufficient, appropriate documentation described below.
14. Pay for certain expenditures unique to a particular State agency. Agencies must follow OSC guidelines and obtain OSC approval where required.

For allowable expenses, OSC requires Business Units to maintain sufficient, appropriate evidence to support the expense. This includes, but is not limited to, a justification of the need for the expense, documentation supporting the expense is reasonable, receipts or invoices, and the cancelled check issued from the advance account or a copy of the cash receipt.

A petty cash advance cannot be used for the following purposes:

1. Payments for meals and mileage in excess of the allowable federal rates.
2. Payments to non-employees for personal service.
3. Any contract payment.
4. Payments covered by medical fee schedules or hospital rate schedules.
5. Payments for family care or personal care.

Personal Service (Payroll) Correction

The payment to an employee for personal services is not intended to supersede normal State payroll procedures. However, if an agency determines that a payroll correction is necessary, OSC recommends the agency refer to Payroll Bulletin No. 2205, Updated Guidance for Issuing Payroll Corrections.

Travel (Advance Account Code 59002)

The travel advance account is used to provide employees with enough funds to cover their immediate travel costs which they would not otherwise be able to charge to their travel card.

Confidential (Advance Account Code 59003)

The confidential advance account is issued by agencies to provide funds to investigators working on confidential assignments, (e.g. narcotics investigations).

Other (Advance Account Code 59004)

An advance account can be established for a special purpose when in the judgment of the State Comptroller – BSAO an advance account is necessary and proper to achieve the purpose of the appropriation from which the advance will be issued. When a Special Cash Advance is authorized for a specific purpose the moneys advanced should never be commingled with other advance accounts authorized for other operating expenses (e.g. petty cash purchase, travel expenses). If the reconciled balance including work-in-process activity and deposits in transit, exceeds the balance, authorized by the State Comptroller the excess must be turned over to the State Treasury pursuant to Section 121 of the State Finance Law.

Examples and descriptions of Special Cash Advance accounts authorized for special purposes are:

• Work Release Advances issued to provide moneys to inmates released under a work release program of the Department of Correctional Services.
• Family Care Advances issued to Mental Hygiene facilities to reimburse family caretakers for expenditures made for clients' clothing, recreation and personal requirements.

Professional Services (Advance Account Code 59005)

The professional services advance account is used for certain State Fair contractual expenses and should not be used by any other agency without BSAO approval.

Documents Required for Post Audit

All original receipts and supporting documentation must be retained at the agency for audit review.

Purchases made from the petty cash account should be supported by a receipt from the vendor, listing the articles or services purchased and the total amount paid.

The person making the purchase or the vendor should describe the articles or services purchased, indicating the date and the total amount disbursed.

Control of Change Funds or Cash Boxes

The business office should keep a record of the amount in each change fund and its location. Signed receipt forms should be on file from the fund custodians. Periodic physical counts should be made of the change funds by business office personnel. Cashing of personal checks from change funds are not permitted. The amount of each change fund should remain constant and be withheld at the close of each day from the total cash in the register or cash drawer and used as the fund with which to begin the following day. The remaining cash is turned in as representing the current day's receipts. Cash receipts should not be retained with the change fund after the close of the business day.

Control of Petty Cash

Ordinarily, petty cash is maintained on an imprest basis; i.e., the cash is replenished for the exact amount of the expenditures reported. Caution should be exercised to ensure that the amount of cash on hand is consistent with the needs for which it was created. Periodically, the necessity for the cash and the amount thereof should be reevaluated by someone other than the custodian.

State agencies may have petty cash in checking accounts through local banks and/or actual cash in the possession of their employees (e.g. cash box). Controls to be exercised for funds retained in bank accounts are discussed in other sections of this Chapter.

All disbursements from non-bank petty cash should be supported by invoices that are properly approved and dated. These should be examined and cancelled when the cash is reimbursed. This reimbursement should be frequent and the distribution of the charges clearly shown on the voucher submitted for reimbursement.

Periodic physical counts should be made of the cash by someone other than the custodian of the fund. The cashing of personal checks from non-bank petty cash is not permitted.

Guide to Financial Operations

REV. 11/05/2024