Cash on Hand Accounting Guide

This guide explains how the entries for human subject cash advances, petty cash, and change funds are recorded in the financial statements.

• Human subject cash advances – cash advances that are utilized to make payments in cash to the human subjects participating in research projects to compensate them for their time and commitment.
• Petty cash - limited dollar cash on hand used to purchase goods when the dollar amount is low and preferred standard university procurement system methods (e.g., internal supplier purchase, requisition, or PCard) are not accepted.
• Change funds - limited dollar cash or coin used by a unit to make change for customers paying by cash.

What Triggers the Accounting Entries:

Cash on Hand accounts are opened and the amounts can be formally increased using the Workday Miscellaneous Payment Process.

Upon approval of the operational transaction, Workday records the cash asset, either 10020: Petty Cash or 10030: Change Funds and offsets it to 20000: Accounts Payable. No expense or revenue is recorded.

After the cash on hand amount is established, the Unit Fiscal Team records monthly journal entries, as needed, to recognize expenses, shortages, or overages based on reconciliation results.

UNIV Opening or Increasing Cash on Hand:

Upon approval, Workday records the cash on hand as either: 

• 10020: Petty Cash or 10030: Change Funds, with an offset to 20000: Accounts Payable depending on which Miscellaneous Payment category was used on the request.

Petty Cash / Non-ERIK Human Subject Miscellaneous Payment Request on the Actuals Ledger: 

Change Fund Miscellaneous Payment Request on the Actuals Ledger: 

• These same entries are used when a unit formally increases the approved petty cash balance. Expenses are recorded later, as petty cash is used and documented.

ERIK Opening or Increasing Human Subject Cash Advance:

• For ERIK (Enterprise for Research, Innovation, and Knowledge) human subject cash advances, the Miscellaneous payment records an entry to the Petty Cash account and books it to a central worktag string designated by ERIK.  At the time the Miscellaneous payment is approved, the Grants Accounting records pre-encumbrances to earmark funds on the department cost center and grant. These pre-encumbrances are adjusted each time there is a corresponding entry to 10020: Petty Cash. All pre-encumbrance entries and adjustments are completed by the Grants Accounting team. When submitting a Miscellaneous Payment Request for ERIK, the custodian must enter ERIK worktags as it is not allowable to advance sponsored funds.

ERIK Human Subject Miscellaneous Payment Request on the Actuals Ledger:

ERIK Human Subject Cost Center Journal (recorded by ERIK Staff) on the Pre-Encumbrance Ledger:

• These same entries are used when a unit formally increases the approved petty cash balance. Expenses are recorded later, as the advance is used and documented.

Examples: Opening the Funds

What Triggers the Accounting Entries:

Replenishment is used when cash from a petty cash or human subject cash advance has been spent and additional cash is needed, up to the approved balance. The entries are system generated the same as opening or increasing the account. Petty Cash and non-ERIK Cash Advance replenishment requests are submitted using the Workday Miscellaneous Payment process. 

For Petty Cash, Workday records an increase to 10020: Petty Cash with an offset to 20000: Accounts Payable.

For ERIK human subject cash advances, replenishment entries are recorded directly as an expense on the grant rather than to 10020: Petty Cash. This allows the documented payments to post to the grant for sponsor billing while replacing the cash already spent. The Grants Accounting team reviews replenishment activity to confirm the requested amount does not exceed the documented cash spent or the approved cash advance balance. Because replenishment does not change the approved cash advance amount in account 10020: Petty Cash, the related pre-encumbrance is not adjusted.

Replenishment Accounting

Upon approval, Workday records the cash on hand as either: 

• 10020: Petty Cash or 66050: Other Expense (ERIK Human Subject Cash Advances Only), with an offset to 20000: Accounts Payable.

Petty Cash / Non ERIK Human Subject Miscellaneous Payment Request in the Actuals Ledger:

ERIK Human Subject Miscellaneous Payment Request in the Actuals Ledger:

If additional funding is needed beyond the approved balance, submit a new miscellaneous payment request for the amount above the original approved balance.

Examples: Replenishment for Petty Cash & ERIK Human Subject Cash Advances

What Triggers the Accounting Entries

Each month, the Unit Fiscal Team counts the cash on hand and compares it to the custodian’s activity log and support.

They should also compare the cash on hand balance to the related financial statement account balance. Expenses, overages, shortages, or other differences are recorded with a monthly journal entry.

Petty cash and Human Subject Cash Advance activities are recorded using manual cost center journal entries based on reconciliation results.

UNIV Monthly Expense Entry:

• Expenditures are recorded when the activity log and support show cash was spent. These are done as manual cost center journals to decrease the Petty Cash account balance and record an offsetting expense. 

Petty Cash / Non-ERIK Human Subject Expenditures Cost Center Journal on the Actuals Ledger:

ERIK Monthly Expense Entry:

• If a department does not wish to replenish its Human Subject Cash Advance account, it is still required to submit activity logs and supporting documentation to Grants Accounting monthly. Grants Accounting will record the expenditures to the grant in the appropriate accounting period based on the supporting documentation provided. These entries are recorded as manual cost center journals that reduce the Petty Cash account balance and record the corresponding expense.
  • The Grants Accounting team also adjusts the pre-encumbrance to reflect the reduced balance in 10020: Petty Cash.

ERIK Human Subject Expenditures Cost Center Journal on the Actuals Ledger:

ERIK Human Subject Expenditures Cost Center Journal on the Pre-Encumbrance Ledger:

UNIV Shortages and Overages (Report ERIK Differences to Grants Accounting):

• Shortages are recorded when the cash count is less than the activity log and expected financial statement account balance. These are done as manual cost center journals to decrease the Petty Cash account balance and record an offsetting expense. 
  • For ERIK Shortages, send the information and logs to the Grants Accounting team.

Petty Cash / Non-ERIK Human Subject Shortage Cost Center Journal on the Actuals Ledger: 

• Overages are recorded when the cash count is more than the activity log and expected financial statement account balance. These are done as a cash sale to deposit the excess funds as revenue and do not increase the Petty Cash account balance.
  • For ERIK Overages, send the information and logs to the Grants Accounting team.

Petty Cash / Non-ERIK Human Subject Overage Cash Sale on the Actuals Ledger:

These entries ensure the financial statement account balance matches actual cash on hand and must be recorded at least monthly, when necessary. 

Examples: Recording Petty Cash Activity

Entries to close or formally decrease the amount of the cash on hand accounts return the cash to central university accounts and zero out the cash on hand asset account. After closure, the cash on hand balance is zeroed out, no further activity may occur, and required documentation is retained in accordance with university record‑retention requirements.

Petty Cash / Non-ERIK Human Subject Closure / Decrease Cash Sale on the Actuals Ledger: 

Change Fund Closure / Decrease Cash Sale on the Actuals Ledger: 

For ERIK human subject cash advances, the department submits any remaining expenses from the replenishment log to Grants Accounting for posting. Any remaining cash is returned to Grants Accounting by check or money order so Grants Accounting can post the return and reduce or close the human subject cash advance. Grants Accounting also adjusts the related pre-encumbrance so it reflects the outstanding human subject cash advance activity after the closure or decrease is recorded.

ERIK Human Subject Closure / Decrease Cash Sale on the Actuals Ledger: 

ERIK Human Subject Closure / Decrease Cost Center Journal on the Pre-Encumbrance Ledger: