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Got a question? Try Ask the MMA How can we set aside a gift for unanticipated expenses?
Q: Our town anticipates the receipt of a substantial cash gift. How can we set a portion of these funds aside for future unanticipated expenses without the funds going into the general fund or free cash account and being used to offset the general town budget?
A: Section 53A of Chapter 44 governs the treatment of gifts where there are conditions attached on the use of the gift. If there are no conditions attached, Section 53 applies. Section 53 generally provides that the gift amount flow to “free cash,” which town meeting may appropriate, entirely or in part, for any lawful purpose, including the stabilization fund.
The following are the pertinent parts of Section 53A: “An officer or department of any city or town, or of any regional school or other district, may accept grants or gifts of funds from the federal government and from a charitable foundation, a private corporation, or an individual, or from the commonwealth, a county or municipality or an agency thereof, and in the case of any grant or gift given for educational purposes may expend said funds for the purposes of such grant or gift with the approval of the school committee, and in the case of any other grant or gift may expend such funds for the purposes of such grant or gift in cities having a Plan D or Plan E form of government with the approval of the city manager and city council, in all other cities with the approval of the mayor and city council, in towns with the approval of the board of selectmen, and in districts with the approval of the prudential committee, if any, otherwise the commissioners. Notwithstanding the provisions of Section 53, any amounts so received by an officer or department of a city, town or district shall be deposited with the treasurer of such city, town or district and held as a separate account and may be expended as aforesaid by such officer or department receiving the grant or gift without further appropriation. If the express written terms or conditions of the grant agreement so stipulate, interest on the grant funds may remain with and become a part of the grant account and may be expended as part of the grant by such officer or department receiving the grant or gift without further appropriation. …”
Got a question? Try Ask the MMA How can we set aside a gift for unanticipated expenses?
How can we set aside a gift for unanticipated expenses?
Q: Our town anticipates the receipt of a substantial cash gift. How can we set a portion of these funds aside for future unanticipated expenses without the funds going into the general fund or free cash account and being used to offset the general town budget?
A: Section 53A of Chapter 44 governs the treatment of gifts where there are conditions attached on the use of the gift. If there are no conditions attached, Section 53 applies. Section 53 generally provides that the gift amount flow to “free cash,” which town meeting may appropriate, entirely or in part, for any lawful purpose, including the stabilization fund.
The following are the pertinent parts of Section 53A: “An officer or department of any city or town, or of any regional school or other district, may accept grants or gifts of funds from the federal government and from a charitable foundation, a private corporation, or an individual, or from the commonwealth, a county or municipality or an agency thereof, and in the case of any grant or gift given for educational purposes may expend said funds for the purposes of such grant or gift with the approval of the school committee, and in the case of any other grant or gift may expend such funds for the purposes of such grant or gift in cities having a Plan D or Plan E form of government with the approval of the city manager and city council, in all other cities with the approval of the mayor and city council, in towns with the approval of the board of selectmen, and in districts with the approval of the prudential committee, if any, otherwise the commissioners. Notwithstanding the provisions of Section 53, any amounts so received by an officer or department of a city, town or district shall be deposited with the treasurer of such city, town or district and held as a separate account and may be expended as aforesaid by such officer or department receiving the grant or gift without further appropriation. If the express written terms or conditions of the grant agreement so stipulate, interest on the grant funds may remain with and become a part of the grant account and may be expended as part of the grant by such officer or department receiving the grant or gift without further appropriation. …”
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