Penny Shortage

In the absence of authoritative guidance (state or federal), the Office of Statewide Reporting and Accounting Policy (OSRAP) acknowledged the need for state agencies to adjust cash handling procedures in the new penny-free environment.  If an LSU merchant is unable to distribute correct change in a cash transaction, please follow the below rounding procedures distributed by OSRAP. 

 

Cash-Handling Requirements

---

State agencies are not required to accept or distribute pennies in cash transactions. It is recommended that agencies use standardized rounding to the nearest five cents for all cash-only transactions – applied to the total transaction amount (after adding any applicable state or local sales taxes) – using the rules below:

Amount Ending In	Round To
$0.01 or $0.02	Down to $0.00
$0.03 or $0.04	Up to $0.05
$0.06 or $0.07	Down to $0.05
$0.08 or $0.09	Up to $0.10

 

It is also recommended that signage be displayed at cash collection points to notify customers of rounding policy.

 

Non-Cash transactions

---

No rounding should be applied to non-cash transactions, including checks, Automated Clearing House (ACH) payments, debit cards, credit cards, or online payments, which should continue to be processed to the exact cent.

 

LSU Merchant Accounting Treatment

---

Revenues should be recorded based on the transaction total regardless of payment tender.  If a merchant’s cash amount is out of balance at close due to the above rounding, the debit or credit difference should be recorded on an additional line on the CARD entry to Ledger 6300:Other Charges using Spend Category Cash Over/Short (SC0098).