According to MGL Ch. 41, Section 35, a treasurer “shall annually render a true account of all receipts and disbursements,” hence the necessity of keeping a cash book. The cash book is the source of original entry, organized by date, for recording all municipal receipts (evidenced by departmental turnovers, wire transfers, etc.) and deposits, as well as disbursements (summarized by payroll and vender warrants).
When accurately maintained, it reveals the total cash position of the community at any given time.
A cash book also serves as an important financial control when the treasurer reconciles it to monthly bank statements and then to the accountant’s general ledger cash balance also on a monthly basis.
Modern day software, such as Excel and Quickbooks, have replaced manual ledgers, an important advancement that has made dealing with the complexities of current day municipal financial management possible. Advantages include the ability to import data from external sources, thereby avoiding the need to manually key entries, and the instant availability of cash balance information at any point in time, thereby eliminating the need to run an adding machine tape.
Shortly after the end of each month, the treasurer’s office should internally reconcile the cash book to all bank statements. Since the cash reconciliation is a legal responsibility of the treasurer, even if it is assigned to a staff member, he or she is obligated to oversee the process to ensure its accuracy and timeliness. Once reconciled internally, the treasurer’s office should reconcile to the accountant’s general ledger as a further check and balance to ensure that funds are not missing and financial records are correct. If variances exist, the treasurer should begin the process of verifying cash book entries with source documents.
Prompt and frequent reconciliations are essential in order to maintain control over cash. The treasurer’s cash book is also a legal, permanent record. Therefore, at the end of each fiscal year, it should be printed, bound and retained in compliance with the Secretary of State’s municipal guidelines on record retention.
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| Date published: | February 2, 2026 |
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| Last updated: | March 11, 2026 |