The Management of Petty Cash in a nursing facility or assisted living residence is often assigned to the front desk receptionist, Activity Department Head or Business Office Manager.  Petty cash is essentially a small amount of money used for expenditures where it is not necessary to utilize a check. Expenditures in a senior living community may be for items such as activity Department supplies (such as the monthly birthday cake for a resident party), a quick trip to the grocery store, gas for the facility bus, maintenance supplies that could not be ordered in advance, etc.

It is important to establish a policy and procedure regarding the management of the Petty Cash funds.

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Managing Petty Cash in Senior Living Communities

•        Determine who will have access to cash such as the front desk receptionist, department staff or business office.
•        Ensure that you have procedures in place to document all disbursements and require backup such as receipts for any expenditures.  If a receipt is not available, create a form that can be used as a cash voucher to document the disbursement.
•        Make sure that the cash is kept in a safe location.  It should be kept in a metal box with a key.  The box should be stored in a locked drawer or cabinet.
•        Establish a beginning amount for the Petty Cash fund.  You can base this on past expenditure history.  Maintain the cash amounts in small bills, primarily $1, $5 and $10 denominations along with a small supply of coins.
•        Consider whether you wish to establish a maximum amount for each transaction.  While most petty cash expenditures should be small, there may be an occasion where a vendor requires cash payment.  An example might be an immediate repair by a plumber, repair of a flat tire for the facility vehicle, etc.  Not all senior living communities have a credit card on hand.  They may not have the ability to provide a check in an emergency situation.
•        Educate staff as to how the Petty Cash Fund works.  Who may obtain cash, what documents must they provide such as a receipt, what are the limits of the amount provided, is there an authorization required by a supervisor, etc.? This information should also be documented in your Policy and Procedures for Petty Cash.
•        Create a transaction log.  It should function in a manner similar to a checkbook ledger.  Start with a beginning balance.  Subtract any disbursements and include notations such as the date, who received the funds, for what purpose, etc.  A simple Excel spreadsheet or form should work well.  This information can be provided to the business office or accountant to complete the reconciliation.
•        Develop a reconciliation process that will be completed on a monthly basis. Money will not be replenished into the Petty Cash box until a reconciliation of the previous month has been completed and all monies are accounted for.
•        If the cash balance ever changes, be sure to notify the accountant. This balance is included on the facilities balance sheet and will need to be adjusted accordingly. If there are multiple petty cash accounts, make sure they are broken out and reconciled separately.

The Petty Cash box may not be as easy to manage without having proper procedures in place  for monthly reconciliations of disbursements and access limitations.   Petty cash is a necessity for most senior living communities, ALs and SNFs.  Establishing a solid process with procedures that help to ensure that the cash is available as needed and accounted for as disbursed is ideal.