While modern societies collect dues digitally, physical cash is still spent daily on diesel drums, plumbing washers, gardener tools, and emergency watchman wages. Unaudited petty cash boxes remain the number one source of treasurer friction and embezzlement allegations.
Statutory Cash-in-Hand Limits
Most state cooperative society bye-laws explicitly cap the maximum physical cash an office manager or treasurer can hold at any given time (typically between ₹5,000 and ₹10,000).
Keeping ₹50,000 or ₹1,00,000 in cash inside the society clubhouse safe violates statutory risk rules and invites severe auditor objections during the annual review.
The Imprest Petty Cash System
Professional societies use the imprest system: the manager is issued a fixed float (e.g., ₹5,000). Every time an expense is incurred, a numbered debit voucher is filled out with supporting vendor receipts attached.
When the cash float drops to ₹1,000, the manager submits the signed voucher bundle to the treasurer, who reviews each bill and issues a reimbursement check/transfer to restore the float to ₹5,000.
- Every voucher must state date, exact description, recipient signature, and approval initials.
- Self-certified chits without vendor cash memos should not be reimbursed except for verified auto/rickshaw fares.
- Conduct unannounced monthly physical cash drawer reconciliations.
Common questions
Can an RWA accept maintenance payments in cash from residents?
Under Income Tax Section 269ST, accepting cash of ₹2,00,000 or more is illegal. Even for small payments, societies should mandate digital UPI/NEFT to maintain an unalterable audit trail.
Related DGate resources for society management
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- RWA management software for managing committees
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