All obligations and expenditures must be processed in a timely manner in MMARS, as prescribed by the CTR. Pre-encumbrance and encumbrance documents are processed to reserve funds for obligations/contracts. All payments for commodities received and services rendered are processed in MMARS.
All encumbrance transactions must be processed according to the accounting prescriptions set forth in the CTR’s Expenditure Classification Handbook. The major transactions are described later in this section. These transactions initiate the outright purchase, lease, rental, fee for service, or license for commodities and services covered under 801 CMR 21.00 and 808 CMR 1.00.
A descriptive list of pertinent MMARS transactions and associated requirements for documentation and approval follows. For more detailed transaction instructions, consult the MMARS website.
Note: References to MMARS transactions only apply to those entities that use the state accounting system, MMARS.
- MMARS TRANSACTIONS
Please see CTR’s Expenditure Classification Handbook to determine which transactions apply to the object code selected for the purchase.
Under MMARS, the term “commodity” applies to both goods and services. Goods include, but are not limited to, any articles of trade, items, products, supplies, information technology resources, automated data processing and telecommunication hardware, software, and systems. Services include, but are not limited to, furnishing of time, labor, effort, specialized skills by a contractor including operational, professional, maintenance, consultant, maintenance and repair, non-professional, and human and social services.
The contract-related MMARS documents are considered “commodity-based” documents and are the only MMARS documents with a “commodity” line. These documents require a commodity code. The encumbrance and payment documents include:
- RQS (Standard Requisition) – pre-encumbrance for the CT, RPO, and PC, that may be used to reserve funds prior to encumbering.
- CT (Contract) – encumbrance for contracts for services, leases that are less than six months and construction.
- PC (Commodity Purchase Order) – encumbrance for contracts for commodities that are “goods.”
- PRC (Payment Request) – the payment document for the CT, PC, and the RPO (manual payment only when authorized by CTR).
- RPO (Recurring Payment Order) – encumbrance for recurring payments. The RPO is required for all space leases (Object Code G01), all TELP object codes (U08/L02-L12/N62), all operating and capital leases longer than six months (U09/L22-L32/N63), ready payments (human and social service payments under 815 CMR 3.00), maintenance contracts, and other contracts with scheduled payments.
- PRM (Payment Request Matching Document) – the payment document for the RPO that is automatically generated by the system.
- Contract -Related MMARS Transaction Guidance
For statewide contracts, Departments must enter the Master Agreement (MA) number and must reference the Request for Response (RFR) number as part of the Board Award Field.
- NON-COMMODITY BASED ENCUMBARANCES
Non-commodity based encumbrances reserve funds for any reimbursements to employee-related expenses, pension and insurance related expenses, postage, subscriptions and memberships, advertising expenses, fees, fines, licenses and permits, confidential investigation expenses, donations, exhibits/displays, electricity, sewage disposal, water, natural gas, incidental purchases, and other expenditures that do not require a procurement and contract. The encumbrance and payment documents include:
- AP (General Accounting Pre-Encumbrance) – encumbrance to reserve funds prior to encumbering a GAE, with the exception of incidental purchase object codes.
- GAE (General Accounting Encumbrance) – encumbrance for obligations not requiring a procurement and contract, including incidental purchases.
- GAX (Generate Accounting Expense Expenditure) – the payment document for non-incidental purchase payments encumbered with a GAE.
- INP (Incidental Payment) – the payment document for incidental purchase payments encumbered with a GAE.
Note:Openorder Event Type: The use of an Openorder event type (allowed on the CT and GAE encumbrance) is not considered a procurement. Openorder allows for the reservation of funds for multiple contractors. It is an accounting treatment and does not take the place of a procurement method. Evidence of an appropriate procurement and contract for each contractor must be kept in the Department’s procurement file. Please contact the Comptroller for more information about the Openorder.
PC APPROVAL PROCESS
There is no secondary approval for commodity purchases exceeding $150,000. PC documents that require an override in MMARS are to be forwarded to the Executive Office for Administration and Finance (ANF) Budget staff for approval.
For services, the transaction delegation threshold is $500,000 and those secondary approvals are completed in accordance with procedures established by CTR. Departments must be able to document and verify that all purchases have been made in accordance with prescribed laws, regulations, policies, and procedures to ensure that the acquisition represents “best value” to the Commonwealth. Departments may not manipulate contracts or contract amendments to avoid secondary review for encumbrances exceeding the delegation limit, e.g. splitting contracts or contract amendments, or encumbering less than the maximum obligation of a contract.
CTR OVERSIGHT REVIEW
Process for CT and RPO Transactions Exceeding a Department’s Delegation Threshold Limit.
CT and RPO transactions that exceed a Department’s transaction delegation limit require secondary review by CTR. Departments are required to complete the one-page CTR Encumbrance/Contract Transmittal Form and submit the required paperwork, which will be reviewed by the CTR Contracts Unit. Upon receipt of the CTR Encumbrance/Contract Transmittal Form and the required paperwork, the Contracts Unit staff will review the package and, if appropriate, finalize the encumbrance in MMARS. CTR will reject documents if the contract package does not include all of the required paperwork or if it has errors in MMARS. If rejected, CTR will insert a Document Comment into the CT or RPO outlining the issues. In addition, an e-mail is sent to the Departments’ MMARS Liaisons.
The chart below delineates delegation limits for Master Agreements, commodities, services, and incidental purchases:
|MMARS DOCUMENT||DELEGATION LIMIT|
FOR TOTAL DURATION
|No limit||Department transactions referencing Statewide Contract MAs managed by OSD will process automatically without secondary review.|
|No limit||Includes Departmental MAs referencing a PC.|
|$500,000||Includes Departmental MAs referencing a CT.|
|$500,000||Includes Department MA referencing RPO.|
|$10,000||One-time, non-recurring need.|