840 CMR 4.00: FINANCIAL OPERATIONS/STANDARD METHOD OF ACCOUNTING

840 CMR 4.00, establishing standard methods of accounting for boards, is
promulgated by the Public Employee Retirement Administration Commission
pursuant to M.G.L. c. 7, § 50 and M.G.L. c. 32, § 21. Except as may otherwise be
provided by the Commission, or by supplementary rules of a particular retirement
board approved by the Commission pursuant to 840 CMR 14.02, or by statute,
840 CMR 4.00 shall govern methods of accounting of all retirement boards.

4.01: Ledger Accounts, Cash Book and Journal

      Every board shall establish, number and maintain ledger accounts in the form
prescribed by the Commission and shall maintain a cash book, the format of which
shall be provided or approved by the Commission, and a journal for adjusting
entries.

4.02: Entries and Posting of Accounts; Trial Balance

(1) Entries shall be entered on a daily basis.

(2) The Cash Book and Journal shall be posted to the ledger accounts monthly.

(3) A Trial Balance shall be performed monthly.

4.03: Copies to be Sent to PERAC

(1) Within four weeks of the close of each month, after all entries for the month
have been posted and a trial balance performed, the board shall send to the
Commission a photocopy of the following for the month:
      (a) cash book entries;
      (b) trial balance; and
      (c) journal entries

(2) The board shall send or have sent to the Commission a copy of all custodian
statements received by the board within four weeks of the close of the month. Such
statements shall be separated into the following five categories: cash, short term
investments*, fixed income investments, equities, and pooled funds. Such
statements shall include, but not be limited to:
      (a) monthly custodian bank statements which detail transaction activity
      including investment income, investments purchased, accrued interest paid,
      investments sold, book value of investments sold, profit/loss on investments
      sold, accrued interest sold, cusip numbers, name of brokers and commissions
      paid, trade receivables and payables, trade dates, settlement dates and actual
      settlement dates.
            *Short term investments are defined as U.S. Treasury Bills, Commercial
            Paper, Certificates of Deposit, Repurchase Agreements, Cooperative
            Shares, Savings and Loan Shares, Money Market and Term Deposits.
      (b) monthly account appraisal which provides an alphabetical listing of assets
      held for each category; information for each asset should include a complete
      description of the asset, cusip numbers, par value or number of shares, book
      value and market value.

(3) The board shall send or have sent to the Commission a copy of all statements
received by the board within four weeks of the close of the month. Such statements
shall detail the activity of the retirement system including purchases and sales of
fund shares, income, dividend re-investments, fund expenses, and ownership interest
of the retirement system in any commingled funds, including, but not limited to,
separate accounts, bank pooled funds, mutual funds, group trusts and limited
partnerships.

4.04: Failure to File Financial Reports

      Any retirement board failing to file the financial statements and reports required
by M.G.L. c. 32, § 20(5)(g), or by 840 CMR 4.03 shall be subject to the penalties
provided by M.G.L. c. 32, § 24(2) and to revocation of exemption pursuant to
840 CMR 19.00.

REGULATORY AUTHORITY
840 CMR 4.00: M.G.L. c. 7, § 50; c. 32, § 21.

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