Departmental Financial Management Guide
A change fund is an amount of money advanced to departments that accept cash from customers and, therefore, must have cash available to make change. Change funds may be issued on either a temporary basis (for a specific activity or event) or on a permanent basis (for ongoing departmental business).
Change funds are established in dollar amounts appropriate to business needs not to exceed $100,000. High dollar amounts may be appropriate for large operations such as the Bookstore, but most change funds are a few hundred dollars or less.
Change funds must always equal the total authorized amount, which is the amount approved by CCO. All change funds are subject to unannounced audits at any time by CCO staff, internal auditors, and external auditors.
Change funds are used exclusively to make change when receiving cash, for example, from fees, fines or sales. No expenses of any kind may be authorized from a change fund.
The change fund must be requested by an individual, known as a custodian. The custodian is the individual designated by the campus controller as responsible for safeguarding and disbursing from the change fund. The custodian must be a university employee with a 50% or greater appointment or affiliate fiscal staff and must be authorized by the department head and CCO.
To establish a change fund, complete a Petty Cash/Change Fund Request (PCCF) form found on the PSC website. In addition, the Payment Authorization (PA) form is completed for the initial amount requested for the change fund.
On the Payment Authorization form:
Both the PCCF and PA forms are forwarded to CCO, as noted on the bottom of the PCCF form. CCO will return an approved copy of the PCCF form to the custodian, and submit the original PCCF and PA forms to the PSC for processing. The PSC will send a check to the custodian at the departmental address listed on the PA form. The custodian may cash the check at the cashier’s window in Regent Administrative Center. Note: The custodian must transport the check in a secure manner (ex. locked bag or armored car) and show picture identification at the cashier’s window. Refer to the university’s Cash Control section of the Accounting Handbook for more information.
- The custodian must take appropriate measures to ensure the security of the change fund at all times. Examples include, but are not limited to:
- At the end of the day, or at the end of the employee’s shift when the change fund has been used, verify that the fund equals the total authorized amount. Note: Any overage or shortage due to errors must be recorded to account 552630 – Cash Over/Short when the fund is replenished or closed.
- If a theft occurs, notify the University of Colorado Police Department (UCPD) and CCO as soon as the theft is discovered. UCPD will investigate and complete a report. Prepare a Payment Authorization (PA) for the amount of the theft. The PA should be drawn against the change fund FOPPS, account 552630 – Cash Over/Short. Attach a copy of the police report to the PA and submit these materials to the PSC. A check to reimburse the change fund will be issued to the custodian. Note: If the theft or loss is determined to be due to the negligence of the custodian, the custodian may be required to replace the funds.
- A new PCCF must be submitted for any of the following occurrences:
- Consider designating a “back-up” to manage the change fund in the event of an absence in order to be able to continue using the change fund when the custodian is away. Prepare a memo that delegates this authority from the custodian to the back-up, signed by both parties. It should include a cash count.
- Increases to existing change funds must be requested and processed in the same manner as for establishing a change fund, utilizing the PCCF and PA forms.
- Partial returns (reductions) of the authorized amount must be made by deposits into the FOPPS from which the cash was advanced using account 000300. After depositing the cash, the custodian must provide CCO with a validated copy of the Cash Receipt from the Cashier and a new PCCF. CCO will sign the PCCF, provide a copy to the custodian and send copies to the PSC, thus officially releasing the custodian of the responsibility for the amount of the partial return. Until this is done, the custodian remains responsible for the original total authorized amount.
When the change fund is no longer needed, it should be closed.