The treasurer must take custody of all monies belonging to the city or town and must scrupulously account for those monies (41:35.) In this accounting, the treasurer must utilize and maintain a cash book, containing a breakdown of all receipts, disbursements, and cash balances. The treasurer must determine the cash needs of a municipality and ensure that sufficient liquid assets are available to pay current obligations. All money not required to be kept liquid for purposes of distribution must be invested by the treasurer in such a manner as to require the payment of interest on the money at the highest possible rate reasonably available, taking account of safety, liquidity and yield. (44:55B)
- Proof of Cash 2016 (Excel file)
The treasurer’s responsibilities also include a major role in the issuance of municipal debt. Issuing debt requires, initially, an affirmative vote by the municipality’s legislative authority, the city council or town meeting. Temporary loans require a majority vote and longer-term borrowing, a two-thirds vote. (44:4, 6, 6A, 7)
Debt instruments must be signed by the treasurer and countersigned by the mayor, in a city, unless the charter otherwise provides; in a town, the bonds must be countersigned by a majority of the selectmen. Upon the authorization of long-term debt, the treasurer should prepare for the sale by working with the community’s financial advisor, bond counsel and other local officials. The treasurer should negotiate borrowings, prepare the necessary documents and notes, and report to the Director of Accounts on all debt issued. (44:16, 23, 24, 28)Town treasurers must report to the town accountant, or to the finance committee, in the absence of a town accountant, the amount of debt and interest due in the next fiscal year at the time they submit their budget estimates. (41:59)
Cash Disbursement: Payroll and Account Payable
Only the treasurer may pay out public money. Even then, the treasurer may only make payments upon the signature of the board or officer duly authorized to approve the payment of bills. In cities, it is the auditor, or officer invested with similar duties, who must approve all bills and payrolls before the treasurer may pay them. In towns, it is the town accountant and a majority of the board of Selectmen who must give the approval. In some towns, approval responsibility has been given to the town manager, instead of to the selectmen. (41:52, 56) In the case of payrolls, the department head, or designee, must attest to their accuracy before the treasurer may make payment. (41:41)
The treasurer possesses a number of specific responsibilities relating to payment of and accounting for salaries and wages.
- Receiving, accounting for, and disbursing all payroll and personnel deduction amounts (taxes, retirement, insurance, annuities, etc.).
- Maintaining all payroll and personnel records and acting as liaison between employees and the retirement board, insurance vendors, etc. (149:178B;175:138A)
- Acting as custodian and administrator, if so appointed, of the unemployment compensation program. (40:5E)
- Assuring compliance with the General Laws and with state and federal regulations pertaining to labor and industry standards and to retirement and insurance benefits.
- Monitoring conformity with local personnel bylaws, union contracts, and civil service regulations.
In cities and towns, which maintain a separate retirement system, the treasurer must also serve as the treasurer of that retirement system. [32:23(2)]
Managing Different Types of Municipal Funds
The treasurer must maintain custody of stabilization funds, pension reserve funds, trust funds, enterprise funds, investments, and all other funds of the town not specifically allocated to other agencies by general law or special act. (40:5B,5D; 41:46; 44:53; 44:53F½)
Generally, the treasurer serves as custodian of various financial documents, such as insurance policies, fidelity bonds of other town officials, and deeds to all municipal property acquired by deed. (The town accountant serves as the custody of contracts in towns and must also maintain a register of sureties on bonds. )
Financial Management and Monitoring
The treasurer should regularly advise administrative officers, finance committees, and others concerning the financial condition of the city or town, providing factual information upon which appropriating and budgeting decisions may be made.
The treasurer should diligently maintain tax title accounts, conduct sales of land of low value, in proper circumstances, and prepare documents required to petition for foreclosure, when appropriate. (60:50, 61, 62, 63, 76, 77, 79, 80)
Ultimately, the treasurer bears responsibility for the closing and reconciliation of all books and accounts in the treasurer’s office, including the cash book, warrants (including vendor, payroll, and special warrants), bank accounts (checking accounts, trust funds, and bond and coupon accounts), insurance programs, retirement funds, debt records, and tax title accounts.
The treasurer should regularly and carefully prepare all obligatory reports, including (a) cash reconciliations (b) reports to the accountant of all receipts and balances; reports of payroll deductions (i.e., federal withholding, state withholding, retirement funds, group insurance, credit union, union dues, etc.) (c) An annual report, which includes a statement of receipts and disbursements, a statement of debt, and, in the absence of trust commissioners, a report of trust funds, and (d) reports required to be submitted to the Bureau of Accounts, including an annual filing on or before June 30th of the quarterly report of reconciliation of treasurer’s cash. See Division of Local Services website.
A treasurer who also serves as the accounting officer for a community must submit the prescribed statement of financial position, or “balance sheet,” dated as of the close of business on June 30th. The Bureau of Accounts will not certify a community’s free cash until after this report has been submitted. (See IGR 86-104, titled Free Cash in the Addendum of this manual for more information on free cash.)
Other responsibilities of the treasurer include the general care of equipment and internal systems, the general management of department personnel, communication with rating services, and acting as remitting agent (for federal and state withholding taxes, retirement programs, hospitalization plans, teachers’ annuities, insurance plans, credit unions, United Way, savings banks, labor unions, deferred compensation, and IRAs). See the “Treasurer Records Retention Schedule” for information on disposition of public records. It is located on the website mass.gov, under Secretary of Commonwealth.
It is the responsibility of the Accountant and Treasurer, concurrently, to insure that they are not aware of any fraud involving town funds and/or personnel. They are also responsible for enforcing all general accounting and finance rules, including GASB, of the town and must sign a multi-page sworn document each year as part of the annual cash audit pertaining to proper accounting, security, and procedural transactions of all departments of the town.