Have Accounts Payable, Accounting, Finance or Personnel handle the petty cash box.
Keep the key in a location known only to you and perhaps one other employee. Put it where it will not be found unless someone is specifically looking for it—i.e., behind a book in a manager’s office rather than in your upper righthand desk drawer.
Keep the box in a safe used only by one or two individuals in the company.
Set up a system where every transaction, no matter how small, is recorded in a book with the amount, date and purpose of all withdrawals.
Require any employee who receives cash to sign the book.
Have whomever makes audits include petty cash each time to make sure that there is a correct balance and that all entries have been made.
Make it a strict rule that no employee can obtain a loan from petty cash, even if they sign for it or leave an IOU.
Do not accept an employee’s personal checks in return for cash.
Make sure that the person handling petty cash is completely disciplined about recording a journal entry for each replenishment, debiting Petty Cash (or Office Supplies, or Miscellaneous, etc.) and crediting Cash every time.