Office of the Comptroller files Fiscal Year 2021 Annual Comprehensive Financial Report
Today, Comptroller of the Commonwealth William McNamara announced the filing of the Commonwealth’s Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2021, the period that ended June 30, 2021.
Among the findings published in the ACFR:
- The total governmental activities net position stood at a deficit of $79.056 billion as of June 30, 2021. Major reasons for this deficit include debt issued by the Commonwealth for road/bridge assets owned by the Massachusetts Department of Transportation (MassDOT), capital grants and expenditures for state authorities and municipalities, Massachusetts School Building Authority debt/grants payable, and unfunded pension and retiree health benefits.
- The Commonwealth’s current assets increased by $9.178 billion during Fiscal Year 2021, primarily a result of strong tax revenue growth and provision of federal government financial aid under the American Rescue Plan Act of 2021 (ARPA).
- Commonwealth of Massachusetts long-term debt outstanding increased by $1.084 billion during Fiscal Year 2021.
- Unemployment insurance compensation expenditures totaled $19.439 billion in Fiscal Year 2021, an increase of $7.491 billion, or 62.7%, from the previous year.
- Direct local aid spending totaled $6.499 billion, an increase of $109 million, or 1.7%, from the previous year.
- The Commonwealth received $34.947 billion within governmental activities (which excludes self-funded “business-type activities” such as Unemployment Insurance and the Institutions of Higher Education), of which 57.6% was from income taxes, 21.8% was from sales taxes, 10.5% was from corporate taxes, 1.9% was from motor fuels taxes, and 8.2% was from other forms of taxation.
The ACFR includes an auditors’ report prepared by the Commonwealth’s independent auditors, CLA (CliftonLarsonAllen).
The filing of the ACFR at this time is, in part, affected by the extraordinary circumstances surrounding state finance during Fiscal Year 2021, including unprecedented unemployment insurance compensation expenditures, and a historic influx of federal funding. The Office of the Comptroller and has worked with CLA and with departments experiencing challenges with this financial accounting to ensure a complete and accurate report.
Said Comptroller William McNamara, “The ability to produce the Annual Comprehensive Financial Report is a year-round effort involving the Office of the Comptroller and financial and administrative professionals across the Commonwealth of Massachusetts. I would like to express my gratitude to the Statewide Chief Financial Reporting Officer Pauline Lieu and her staff on the Statewide Financial Reporting Team, as well as the Office of the Comptroller’s Statewide General Accounting Team for their diligent work and professionalism. Additionally, I would like to thank everyone at the Office of the Comptroller for their contributions to this effort, our partners at Commonwealth departments and agencies, and the insightful team at CLA. The aggregate effort and expertise of everyone involved has produced a report that I believe accurately and completely portrays the state of the Commonwealth’s finances.”
About the Annual Comprehensive Financial Report
The ACFR, previously referred to as the Comprehensive Annual Financial Report, is prepared in accordance with Generally Accepted Accounting Principles in the United States of America, as defined for governments by the Government Accounting Standards Board.
The objective of the ACFR is to provide a clear financial picture of the government of the Commonwealth of Massachusetts as a single, unified entry, in a format that makes the report easily compared to other states. The ACFR incorporates activity from over 150 departments, including the various agencies, boards, and commissions, the 25 institutions of higher education, the judicial and legislative branches of government, constitutional offices, as well as 41 separate, independent public authorities.
This report presents the Commonwealth’s financial information on two bases of accounting, each serving a different purpose:
- The fund perspective statements present governmental operations on a modified accrual basis of accounting, or “fund perspective”, which shows how the Commonwealth is able to meet its short-term obligations through “currently available resources”.
- The government-wide perspective combines all government and business-type activities in a statement of net position and a statement of activities, presenting all functions on a full accrual basis of accounting, including long-term assets such as capital assets and long-term liabilities such as debt and retiree pensions and health insurance benefits.
About the Office of the Comptroller
The Office of the Comptroller of the Commonwealth of Massachusetts is an independent and apolitical overseer of governmental and other funding sources, totaling more than $94 billion in revenue and $95 billion in spending in Fiscal Year 2021. In addition, the Office of the Comptroller oversees the Commonwealth’s expenditure, payroll management, and major audit functions.
As stewards of the public trust, we aspire to inspire confidence by maintaining our core principles: clarity, integrity, and accountability.
The powers and obligations of the Office of the Comptroller are generally dictated by M.G.L. c. 7A.