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Uniform Massachusetts Accounting System – July, 2014Massachusetts Department of Revenue Division of Local ServicesAmy A. Pitter, Commissioner Robert G. Nunes, Deputy Commissioner & Director of MunicipalAffairsA Manual for theUniformMassachusettsAccountingSystemfor: CitiesTownsRegional School DistrictsSpecial Purpose DistrictsBureau of AccountsJuly, 20141
Uniform Massachusetts Accounting System – July, 2014Table of ContentsCHAPTER 1 – INTRODUCTION . 7Scope and Purpose . 7UMAS Accounting and Reporting . 7Audited Financial Statement Reporting . 7Revisions. 8Effective Date . 8Additional DLS Publications . 8DLS Web-site . 8CHAPTER 2 – UNIFORM ACCOUNTING CODES . 9Account Classification . 9Uniform Chart of Accounts . 9Account Coding Structure . 9Illustrative Account Codes . 10Fund Codes/Fund and Group of Accounts Descriptions. 10CHAPTER 3 – ASSETS . 13Balance Sheet Accounts . 13Asset Accounts . 13Assets Classification and Account Codes . 13Cash . 14Investments . 15Taxes and Excises Receivable . 15Accounts Receivable . 19Special Assessments Receivable. 20Notes Receivable . 22Due from Other Funds . 22Due from Other Governments . 23Other Assets . 24Restricted Assets . 25Property, Plant and Equipment . 26Amounts to be Provided . 27CHAPTER 4 – LIABILITIES . 30Liability Accounts . 30Liability Classification and Account Codes . 30Warrants and Accounts Payable . 30Accrued Payroll and Amounts Withheld . 31Accrued Liabilities . 33Due to Other Funds . 34Due to Other Governments . 35Other Liabilities . 36Matured Debt and Interest Payable . 37Deferred Revenue . 37Notes Payable . 42Capitalized Lease Obligations. 43Bonds Payable. 43CHAPTER 5 – FUND EQUITY . 452
Uniform Massachusetts Accounting System – July, 2014Fund Equity Accounts . 45Fund Equity Classification and Account Codes . 45Investment in General Fixed Assets . 46Reserved Fund Balance. 46Unreserved Fund Balance – Designated . 51Unreserved Fund Balance – Undesignated . 52Fund Balance Other – Memoranda . 54Fund Balance – Budgetary . 55Fund Balance – Actual . 58CHAPTER 6 – REVENUE ACCOUNTS . 60Subsidiary Revenue Control . 60Taxes and Excises . 61Charges for Services . 62Licenses and Permits . 63Federal Revenue . 63State Revenue . 64Other Intergovernmental Revenue . 65Special Assessments . 66Fines and Forfeits . 66Miscellaneous Revenue . 66Other Financing Sources . 66CHAPTER 7 – EXPENDITURE ACCOUNTS . 68Function Classification . 68Organizational Responsibility Classification . 68Expenditure Object Classification . 68Functions and Organizational Responsibility . 69General Government . 69Public Safety . 71Education . 72Public Works and Facilities . 72Human Services . 74Culture and Recreation . 75Debt Service. 75Intergovernmental Expenditures . 76Unclassified . 76Expenditure Objects. 77Subsidiary Appropriation Control . 78Personal Services . 78Purchase of Services . 79Supplies . 82Intergovernmental . 84Other Charges and Expenses . 85Capital Outlay . 86Debt Service. 88Other Financing Uses . 88CHAPTER 8 – BUDGET ENTRIES . 89The Budgetary Process in Massachusetts . 89Integration of Records . 90Control Account . 903
Uniform Massachusetts Accounting System – July, 2014The Budget Accounts . 91Recording the Budget . 91Illustrative Journal Entries and Supplementry Schedules . 92Tax Rate Recap . 94Other Amounts to be Raised 100Estimated Revenues . 106CHAPTER 9 – GENERAL FUND . 112Budget . 112General Fund Accounting . 112Illustrative Journal Entries . 113UMAS Modified Accrual .113Opening Trial Balance . 114Prior Fiscal Year Matters . 115Expenditures and Other Cash Disbursements . 116Appropriation from Free Cash . 119Inter-fund Transfers . 120Intra-fund Transfers . 123Emergency Spending (G.L. c. 44, § 31) . 125State/County Notice of Estimated Receipts and Charges – The Cherry Sheet . 128Revenues . 131Commitment of Property and Excise Taxes . 131Collection of Property and Excise Taxes . 134Abatement and Exemption of Property and Excise Taxes . 137Refund of Property and Excise Taxes. 138Deferral and Collection of Deferred Real Property Tax (G.L. c. 59, § 5(18A and 41A) . 140Tax Liens . 141Tax Foreclosures . 145Taxes in Litigation . 147Departmental Receivables and Direct Receipts . 148Investment of Cash . 149Borrowing . 150Petty Cash . 153Overlay. 154Tailings (Abandoned Funds) . 155Year End Transactions . 155Closing Entries . 161Closing Trial Balance . 162CHAPTER 10 – SPECIAL REVENUE FUNDS . 163Pension Costs . 163UMAS Modified Accrual . 163Federal and State Grants . 164Revolving Funds . 169Receipts Reserved for Appropriation. 175Gifts and Donations . 179Other . 180CHAPTER 11 – CAPITAL PROJECTS FUND . 183Budget . 183UMAS Modified Accrual . 184Capital Project Accounting . 1844
Uniform Massachusetts Accounting System – July, 2014Short and Long-Term Debt Related Transactions . 185Fixed Asset Related Transactions . 185Illustrative Journal Entries . 185The Project . 186Closing Trial Balance . 192Opening Trial Balance . 192CHAPTER 12 – PROPRIETARY FUND . 196Proprietary Fund Types . 196Debt and Long Term Liability Related Transactions . 196Fixed Asset Related Transactions . 196Electric Light Departments . 197Enterprise Fund Manual . 197UMAS Modified Accrual . 197Illustrative Journal Entries . 198Example for an Enterprise Fund . 198Opening Trial Balance . 199Adjusting Entries . 207Closing Trial Balance . 210Internal Service Funds . 212Self-Insured Health Claims Trust Fund per G.L. c. 32B, § 3A . 212General Principles of a Self-Insured Health Claims Trust Fund . 212Key Provisions of Chapter 32B, § 3A. 213Common Type of Health Claims Trust Plans . 214Incurred But Not Reported (IBNR) Liability . 215Stop Loss Insurance . 215Illustrative Journal Entries for an Internal Service (self insurance) Fund. 216Opening Entries . 216Expenses . 217Revenue . 217Other Transactions . 217Adjusting Entries . 218Closing Entries . 218Closing Trial Balance . 218CHAPTER 13 – FIDUCIARY AND PERMANENT FUNDS . 219Permanent Fund Type . 219Private Purpose Fund Type . 221Other Fiduciary Fund Types . 223Pension Fund . 224Agency Fund . 225CHAPTER 14 – THE CALCULATION OF FREE CASH . 228The Basic Free Cash Calculation . 229Free Cash Calculation in Detail . 229CHAPTER 15 – GENERAL FIXED ASSETS ACCOUNT GROUP AND GENERALLONG TERM OBLIGATIONS ACCOUNT GROUP . 231GFAAG and GLTOAG . 231Amounts to be Provided . 231Change Pre-GASB 34 . 231Illustrative Journal Entries . 232Opening Entry . 2325
Uniform Massachusetts Accounting System – July, 2014Memorandum Entries . 233Bond Issues and Payments . 233Closing Trial Balance . 234Illustrative Journal Entries - GFAAG . 235Opening Entry . 235Closing Trial Balance . 236List of Appendices . 237APPENDIX A . 238Changes to the Uniform Massachusetts Accounting System . 238APPENDIX B . 240ASSET ACCOUNTS – SUMMARY TABLE . 240APPENDIX C . 242LIABILITY ACCOUNTS – SUMMARY TABLE . 242APPENDIX D . 245FUND EQUITY ACCOUNTS – SUMMARY TABLE . 245APPENDIX E . 247REVENUE ACCOUNTS – SUMMARY TABLE . 247APPENDIX F . 249FUNCTIONS AND ORGANIZATIONAL RESPONSIBILITY. 249APPENDIX G . 254Expenditure Objects. 254APPENDIX H – 1 . 257Mass. Water Pollution Abatement Trust (for pools 1 – 10) . 257APPENDIX H – 2 . 262Mass. Water Pollution Abatement Trust (for pools beginning with 11) . 262APPENDIX I . 270LIST OF FUNDS . 270APPENDIX J . 273ACCOUNTING ENTRIES FOR INTER-FUND BORROWING . 273APPENDIX K . 277REVENUE DEFICITS . 277APPENDIX L . 280Massachusetts School Building Authority (MSBA) Grant Payments . 280APPENDIX M. 293A Self-Insured Health Care Trust Fund . 2936
Uniform Massachusetts Accounting System – July, 2014CHAPTER 1 – INTRODUCTIONScope and PurposeThis Manual comprises the Uniform Massachusetts Accounting System (UMAS). Thescope of the Manual is the operation of an accounting system for a local governmentalentity in Massachusetts. Its purpose is to provide a reference for the City Auditor, TownAccountant or official with similar responsibilities in accounting for financial transactionsand reporting results of municipal financial operations. The Manual is based onGenerally Accepted Accounting Principles (GAAP), but is written to meet the particularneeds of Massachusetts local accounting officials.Massachusetts General Laws (G.L.) c. 44, § 38 requires the Director of Accounts inthe Department of Revenue to prescribe uniform accounting systems for localgovernmental entities. Accounting for municipally owned electric light plants isprescribed in G.L. c. 164 and is regulated by the Department of Public Utilities;accounting for retirement systems is prescribed in G.L. c. 32 and is regulated by thePublic Employment Retirement Administration Commission.This Manual deals solely with accounting policies. Municipal financial issues such asbudgeting or audit pro
Generally Accepted Accounting Principles (GAAP), but is written to meet the particular needs of Massachusetts local accounting officials. Massachusetts General Laws (G.L.) c. 44, § 38 requires the Director of Accounts in the Department of Revenue to prescribe uniform accounting systems for local governmental entities.
