Encumbrance Reporting and Lapsing of Appropriations (APS 018)

Overview

Applicable to

State agencies and institutions of higher education.

Policy

State agencies and institutions of higher education must report binding encumbrances and payables for appropriated funds in USAS for the current appropriation year (AY) within 30 days following each of the first three quarters of the fiscal year. Certifications are required when binding encumbrances and payables are reported.

Annually, binding encumbrances and payables must be reported to the Texas Comptroller of Public Accounts (Comptroller’s office), the State Auditor’s Office (SAO) and the Legislative Budget Board (LBB) by Oct. 30 for all appropriated funds for all open appropriation years. (The recommended due date for GR consolidated agencies is Sept. 30.)

Within CAPPS Financials, encumbrance and payable entries can only be posted to the upcoming AY once the USAS profile rollover has taken place. The USAS profile rollover typically takes place the third weekend in June.

The Comptroller’s office is statutorily required to lapse all unencumbered non-construction appropriation balances for all prior appropriation years on Nov. 1 of each fiscal year. To facilitate this, an automatic lapse program will run in USAS as early as the Nov. 1 nightly cycle.

Legal Citation

Texas Constitution Article III, Section 49-g and Article VIII, Section 6; Government Code, Sections 403.021, 403.071.

CAPPS Instructions

Instructions for the Centralized Accounting and Payroll/Personnel System (CAPPS) are included under CAPPS Entries. Please see the box to the right for the outline of this APS.

Background

Why Report Appropriated Funds?

According to the Texas Constitution, Article VIII, Section 6, money can only be drawn from the state treasury by a specific appropriation. Appropriations contained in the General Appropriations Act (GAA) usually have a term of one year, coinciding with the state fiscal year (Sept. 1 to Aug. 31); however, 403.071(b), Government Code effectively permits the expenditure of properly encumbered funds for up to two years after the end of the fiscal year for which the appropriation was made.

Government Code, Section 403.021(b), states that state agencies must report all binding encumbrances and payables into the Uniform Statewide Accounting System (USAS) for the first three quarters of the current appropriation year within 30 days after the close of each of the first three quarters. Annually, year-end binding encumbrances and payables must be reported to the Comptroller’s office, the SAO and the LBB by Oct. 30. (The recommended due date for GR consolidated agencies is Sept. 30.) The report must contain all open appropriation years, as well as all appropriated funds whether received as a direct appropriation or a transfer.

Impact on Economic Stabilization Fund

At the end of each biennium, half of the unencumbered positive General Revenue Fund balance is transferred to the Economic Stabilization Fund (ESF) per the Texas Constitution, Article III, Section 49-g. Entering binding encumbrances and payables into USAS by the deadline is crucial in determining the amount that will be transferred into the ESF, as required by the Texas Constitution.

Impact on Biennial Revenue Estimate

Accurate encumbering and lapsing of appropriations is also critical in the creation of the Biennial Revenue Estimate (BRE), which is used by the Legislature to determine available resources for state agency and institutions of higher education appropriations during each legislative session.

Over encumbering of funds could skew the data included in the BRE and the amount deposited into the ESF. State agencies and institutions of higher education are required to accurately report all encumbrances.

Reporting Guidelines

Definitions

Payables

Amounts obligated for goods or services actually rendered or provided to the agency by the end of the reporting period but for which the agency has not yet made payment should be recorded as accounts payable.

Encumbrances

Over encumbering of an appropriation should be avoided. Amounts obligated for goods or services through contractual obligations should be encumbered according to Texas Attorney General Opinion Numbers 0-2815(1940), V-1139 (1950); WW-40 (1957) and WW-978 (1961). For purposes of the Binding Encumbrances and Payables Certification, an outstanding encumbrance is defined as a contract, agreement or other action that legally obligates state funds.

Encumbrances differ from payables. Encumbrances are commitments for goods or services made before the end of the reporting period, but the actual receipt of the good or service does not occur until after the end of the reporting period (Nov. 30, Feb. 28/29, May 31 or Aug. 31).

An encumbrance is for actual contracts awarded, not anticipated contracts or contracts under negotiation. For example, funds dedicated for construction but not yet awarded would not be reported as an encumbrance. The implementation of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, in fiscal 2012 replaced the need to reserve fund balance for encumbrances. The allocation of fund balance, including encumbrances, should now be reflected as Assigned or Committed. Please refer to Fund Balance/Net Position: Governmental Funds on the AFR website for detailed instructions.

Appropriation Years

Agencies must obligate (encumber) an appropriation during the appropriation year for which the appropriation is made. Payments for such obligations must be made within two years following the last day of the AY for non-construction appropriations:

If the AY is…	Then funds must be encumbered by…	And vouchers must be paid by…
2022 (Sept. 1, 2021 – Aug. 31, 2022)	Aug. 31, 2022	Aug. 31, 2024
2023 (Sept. 1, 2022 – Aug. 31, 2023)	Aug. 31, 2023	Aug. 31, 2025

Lapsed Appropriations

Appropriations expire when:

• They are not obligated in USAS by Aug. 31 of the appropriation year in which they were made.
• Obligated appropriation balances are not expended within two years following the last day of the AY.

  –OR–

• They are not reappropriated in subsequent legislation.

Unless the unobligated appropriation balance is specifically reappropriated for a new term, it cannot be encumbered after the end of the appropriation term. All unobligated appropriation balances must be lapsed by processing a budget lapse transaction into USAS. The Comptroller’s office automatically lapses all unobligated balances as early as Nov. 1 each year.

Agencies with appropriations that may be expended for both operating and construction purposes must lapse or move forward (if appropriate legal authority exists) the unobligated portion.

Unexpended Balance Forward

Unexpended balance (UB) refers to the unobligated balance remaining in an appropriation at the end of an appropriation term. Agencies must have legislative authority to move funds from one year to the next or from one biennium to the next biennium. Any UB of funds must occur prior to Oct. 30 to avoid lapsing of those funds. (The recommended due date for GR consolidated agencies is Sept. 30.)

Important Dates

Quarterly entries of encumbered and payable amounts must be made into USAS with an effective date on or before the end date of the quarter or year. Because the annual reporting requirement encompasses the fourth quarter of the previous appropriation year, there is no requirement for separate fourth quarter reporting. The agency type for annual financial reporting determines the annual due date.

The tables below show the due dates for entering binding encumbrances and payables into USAS:

Due Dates for First Three Quarters

Period	End Date/Effective Date	Due Date
1st Quarter	Nov. 30	Dec. 30
2nd Quarter	Feb. 28/29	March 30
3rd Quarter	May 31	June 30

Required form: Quarterly Certification

Annual Due Dates

AFR Agency Type	End Date/Effective Date	Due Date
GR consolidated	Aug. 31	Sept. 30
Full Reporting	Aug. 31	Oct. 30

Required form: Annual Certification

Budget Revisions and Expenditure Transfers

All transactions for budget revisions and expenditure transfers for open AYs must be completed by Oct. 30 for full reporting agencies and by Sept. 30 for GR consolidated agencies. Doing so will reduce the number of issues that may arise with the lapse that occurs as early as Nov. 1.

Comptroller’s Office Requirements

Lapsed Balances

The Comptroller’s office analyzes binding encumbrance and payables information agencies enter into USAS for quarterly and annual reporting periods.

The Comptroller’s office is directed by Government Code, Section 403.021 (d), to lapse on Nov. 1 of each fiscal year all unencumbered non-construction appropriation balances for all previous appropriation years based on the binding encumbrances and payables reported into USAS. All unobligated balances automatically lapse on Nov. 1. Please contact your ACO for more information on the centrally run auto lapse algorithm.

The Comptroller’s office must enter an online approval for all agency-entered lapse transactions. If your agency has a special situation (such as estimated federal receipts), please call your appropriation control officer (ACO) and request assistance to avoid processing errors.

Expired Appropriations

The Comptroller’s office monitors all previous years’ appropriations and ensures all expired appropriations are zero. This is part of the year-end close process.

Payments After the Statute of Limitations Expire for the Appropriation

Valid claims not presented within the statutory time limit may be paid from funds appropriated to the Comptroller’s office for miscellaneous claims. Such claims cannot be made more than eight years after the date the original claim arose and are limited to $50,000 for any single claim or for an aggregate of claims by a single claimant made during one biennium. Claims over the $50,000 limit and eight-year limitation period may be presented to the Legislature for funding consideration.

Interagency Transaction T-codes

To post interagency accruals (due to/due from) or transfers, see T-code Chart for ITVs and RTIs on the AFR website for the T-code choices or review the Interagency Transaction Voucher (ITV) T-Code Chart PDF.

Reconciling With the AFR

In addition, agencies must also ensure the annual payables information entered into USAS agrees with the payables reported on the agency’s annual financial report (AFR). The USAS information must be reconciled to the AFR and certified under separate reporting procedures. The final expenditure data is loaded into the Automated Budget and Evaluation System for Texas (ABEST) and must be reconciled by approved LBB-assigned strategies.

Reviewing Appropriation Balances Prior to UB or Lapsing

Reviewing for Accuracy

Appropriation balances on the USAS 62 screen may require adjustments or corrections before UB forward, lapsing or collected cash disposition. All transactions for budget revisions and expenditure transfers for affected years should be completed before processing UB or lapsing transactions. Doing so will reduce the number of issues that may arise with the lapse that occurs as early as Nov. 1.

Funding Exceeds Budget

When Appropriation Cash Available (ACA) is greater than Remaining Cash Basis Budget (RCBB) and an agency has appropriation authority to the collected cash, the RCBB should be increased to equal ACA. After increasing the RCBB to equal ACA, the agency should UB or lapse unobligated budget.

Budget Exceeds Funding

RCBB often exceeds ACA. This situation results from unfunded original budget or the RCBB being increased prior to fully collecting the Method of Finance (MOF) amount.

In situations where the RCBB was increased before fully collecting the MOF amount, the RCBB should be reduced to equal the balance of ACA, or the original budget amount if ACA is less than the RCBB. If the RCBB had been increased with T-code 179, a T-code 195/179R should be processed. If the RCBB had been increased with T-codes 006/009, the decrease should be processed with T-codes 009R/006R.

UB, Lapsing and Appropriation Collected Cash Disposition

Introduction

Once balances on the USAS 62 screen are correct, the transaction to UB forward or lapse unobligated appropriation balances should be processed. The disposition of collected cash balances in appropriations must also be identified at this time.

UB T-codes or Entries

Unobligated appropriation balances that agencies have authorization to transfer forward should always comply with the authorization language to transfer forward one year at a time (i.e., AY 2022 to AY 2023).

Use the following T-codes, with a Document Type B, Batch Type 1 to transfer forward UBs:

To transfer a committed budget…	Use T-code…
From the old appropriation	040
To the new appropriation	042

For a collected budget, first transfer the budget, then make the cash transfer. (See cash transfer instructions.)

To transfer a collected budget…	Use T-code…
From the old appropriation	041 and 040
To the new appropriation	042 and 043

Collected Cash

Many ACA balances include both committed and collected cash funding or are completely funded with collected cash.

Collected Cash UB

Unobligated ACA collected cash balances should be moved forward if authorized in the GAA or another statute. Unobligated cash transfers forward should move only one year at a time (i.e., AY 2022 to AY 2023). Transfers forward of UB collected cash should be processed using the following cash disposition T-codes:

If cash was received…	Use T-code…	COBJ
As revenue (Balance Type 12)	405 and 406	3974/3975*
As an operating cash transfer (Balance Type 20)	403 and 404	3986*/7986

Note: * The comptroller object for the collected budget portion of the transactions above should be based on the type of funds transferred. Comptroller object 3974 is for federal funds and 3975 is for regular revenues. Comptroller object 3986 is for unexpended balance forward-operating transfers in and 7986 is for unexpended balance forward-operating transfers out.

Non-UB Collected Cash

If no UB authority exists and the cash was deposited to:

• Fund 0001 – See Prior fiscal year collected cash below.
• General revenue dedicated account or special fund – Transfer to unobligated appropriation number 00000 using the following cash disposition T-codes:

Agency	T-code/Title	Appropriation Number	COBJ	Appropriated Fund/Agency Fund/PCA
Affected Agency	406/Revenue Transfer-Out	Determined by Agency	3970	Determined by Agency
Affected Agency	405/Revenue Transfer-In	00000	3970	Determined by Agency

Prior Fiscal Year Collected Cash

There are often appropriation collected cash balances remaining in prior fiscal years. If the cash is in Fund 0001, use RTI 003973, vendor number 39029029020000, and the following coding block to transfer to Agency 902:

Agency	T-code/Title	COBJ	Appropriated Fund/Agency Fund/PCA
Affected Agency	475/Accrued Transfers Out w/Liquid	7973	Determined by Agency

If the collected cash is in a GR-Dedicated account or Special Fund, follow instructions in Non-UB collected cash.

Lapsing Appropriations

Note: These lapsing instructions presume that all UB transfers forward have been processed.

By Oct. 30 of each year, all agencies must lapse appropriation balances that exceed the level necessary to satisfy any outstanding binding encumbrances and/or payables. (The recommended due date for GR consolidated agencies is Sept. 30.) The lapse transaction must reduce the remaining cash basis budget and the appropriation cash available to an amount equal to the amount needed to pay outstanding binding encumbrances/payables. Enter with Document Type B, Batch Type 1, COBJ 7000:

To lapse a…	Use T-code…
Committed budget	036
Collected budget	039

Once all binding encumbrances and payables are entered into USAS, the committed lapse amount should equal the current remaining encumbrance basis budget less any previously obligated amounts still available for expenditure as of Oct. 30 (or Sept. 30 for GR consolidated agencies).

Reinstating Lapsed Balances

The chief fiscal officer (CFO) or higher official must submit a lapse reversal request that includes a justification for the reversal to the agency’s ACO for approval.

The justification must support that the funds released by the requested lapse reversal are needed to pay a valid expenditure incurred prior to the end of the appropriation year for which the reversal is requested. For example, a request for a lapse reversal for an AY 2022 appropriation must be for a valid expenditure incurred on or before Aug. 31, 2022. Agencies must maintain documentation in their files to support the request to reinstate a lapse, including the approval of the CFO. The supporting documentation must be maintained in agency files for at least two years after the fiscal year in which the request is made.

The existence and timing of an expenditure must be substantiated by a copy of or reference to a purchase order or contract that existed on the date the expense or obligation was incurred.

If the request is granted, the ACO will provide online Comptroller’s office approval with a 600 approval code.

After approval, agencies may make a partial or total reinstatement of a lapse for an outstanding obligation with a budget transaction with:

• Document Type B
• T-code 036 (lapse committed revenue appropriation) or 039 (lapse collected revenue appropriation)
• R in the REVERSAL field
• The proper legal descriptive text (LDT)
• COBJ 7000

See also Appropriation Lapses and Related T-Codes.

Submitting the Required Certifications

The chief fiscal officer or higher official for each agency must approve and submit:

• Quarterly Certification that the binding encumbrance and payable entries have processed in USAS for each of the first three quarters of the fiscal year by Dec. 30 (1st Quarter), March 30 (2nd Quarter) and June 30 (3rd Quarter)

  –AND–

• Annual Certification that the binding encumbrances, payable entries, budget revisions and expenditure transfers have processed in USAS and all unobligated balances have been lapsed or brought forward for previous year appropriations (includes the fourth quarter of the previous appropriation year) — Due by Oct. 30
  (The recommended due date for GR consolidated agencies is Sept. 30.)

Note: Submitting the online form sends the certification to the Comptroller’s office, the SAO and the LBB. You will receive a confirmation page that can be saved as a PDF or copied and pasted into a document for your records.

Contacts

Contact your appropriation control officer if you have USAS or certification form questions.

Contact your agency’s CAPPS support staff if you have CAPPS questions.

Authorized agency support staff may contact the CAPPS Help Desk at (512) 463-2277 for additional assistance.

USAS Requirements

USAS Encumbrance Funding Edit Control

Agencies reporting only to USAS record encumbrances into USAS when obligations are made. The ENC field on the Appropriation Number Profile (20) establishes the encumbrance funding edit control type indicator. The ENC field is set to 2 (Advisory – Warning message appears if the remaining encumbered basis budget or the appropriation encumbered cash available is exceeded) for all active appropriations.

Payable T-codes in USAS

Fiscal Year Considerations

Enter payables with an effective date of Aug. 31 or Aug. 32 to post to the prior fiscal year. Transactions backdated to the prior fiscal year during September may be entered with an effective date of either Aug. 31 or Aug. 32. Transactions backdated to the prior fiscal year after Sept. 30, when month 12 is closed, must be entered with an effective date of Aug. 32. When requesting year-end reports, remember to request period 13.

Vouchers payable transaction codes will generate T-codes that will post the cash transactions in the current fiscal year (see USAS Binding Encumbrances and Payables T-codes). In addition, any previous year payables that have accrued but are not ready to be paid should be entered with T-code 420 and an effective date of Aug. 31. T-code 420 will generate T-code 421 in the current fiscal year to reverse the payable.

Accrued Reimbursements for Institutions of Higher Education

Accrued reimbursements from appropriated funds to local funds (T-codes 246/903 for payroll, 247/904 for non-payroll and 264/905 for non-payroll, interest eligible) should be entered with an effective date of the reporting period’s last day. Any reimbursements that have accrued but are not ready to be paid until after the end of the period should be entered with T-code 420 and an effective date of the reporting period’s last day. T-code 420 will generate T-code 421 in the current fiscal year to reverse the payable.

Professional Fees and Services

The Professional Fees and Services Report (DAFR8960) needs to provide accurate information for annual financial reporting purposes. The payee identification number must be included on transactions entered with T-code 420, including any Comptroller Object Code Profile (D10) that rolls up to Generally Accepted Accounting Practices (GAAP) Source Group 0220 (Professional Fees and Services).

Encumbrance T-codes in USAS

If an agency does not record encumbrances into USAS when obligations are made, an entry must be made at the end of the first three quarters and year-end using T-code 207 to record the encumbrance amount. T-code 207 records the encumbrance in the previous period (the period’s ending date must be used for effective date) and reverses with the generated T-code 211 so the encumbrance is not reflected in the current period.

If an agency uses T-code 210 to record encumbrances throughout the year, no entry is necessary at the end of the first three quarters and year end. At time of payment, the agency uses T-code 231 to record a payable, liquidate the encumbrance and make payment. (T-code 217 is used to cancel an encumbrance.)

Binding Encumbrances and Payables Coding Block in USAS

Binding encumbrances and payables must be entered by appropriation number, appropriation year, fund, program cost account (PCA) and comptroller object (COBJ) for all appropriated funds. Agencies must ensure encumbrance and payable transactions post to PCAs that point to the correct program code in USAS and use the comptroller objects that roll up to the correct LBB object code for all expenditures required to be reported on the LBB’s ABEST system.

See USAS Summary Comptroller Objects Sorted by LBB Object for a list of comptroller objects that may be used as “summary” object codes for encumbrance and payable transactions. These comptroller objects are considered summary object codes only for reporting binding encumbrances and payables required by this document. See the following Comptroller object impact section below for a discussion of when the use of summary object codes is appropriate.

Comptroller Object Impact in USAS

Appropriations of Funds Held Inside the State Treasury

Agencies may enter summary comptroller objects for encumbrance transactions posting to appropriations of funds held in the state treasury. T-codes generating warrants must use specific detail object codes, while T-codes that accrue or reverse (i.e., T-code 420) may use summary object codes.

Funds Held Outside the State Treasury

Agencies with appropriations of funds held outside the state treasury may enter binding encumbrances and payables with summary comptroller objects but should consider how this affects their AFR. Comptroller objects used for these purposes must be correct with regard to LBB objects and GAAP source/objects.

Texas Public Educational Grants Programs and Skiles Act Revenue Bond Retirement must be entered with the appropriate PCA, T-code 642 and comptroller objects 7593 or 7591. Local funds should use T-codes that reverse, not T-codes that liquidate.

Note: Per Requirements for Local Operating Funds and Associated Local Funds (FPP S.009), local USAS operating and operating trust funds are not subject to the lapse and encumbrance provisions of APS 018. They are still subject to the Reporting Requirements for the Annual Financial Reports for payables and accruals.

Fund Cash Forward in USAS

Fund cash balances not required for payment of outstanding obligations from previous years should be moved to the current year (if authorized by statute or the GAA). Again, the balances may be moved forward to the current year, one year at a time (i.e., to move AY 2021 balances to AY 2023, move 2021 to 2022 then 2022 to 2023). Enter the coding block with Document Type J, Batch Type 2 or 8:

If cash was received…	Use T-codes…	COBJ
As revenue (Balance Type 12)	405 and 406	3974/3975*
As a transfer (Balance Type 20)	403 and 404	3986*/7986

Note: * The comptroller object for the collected budget portion of the transactions above should be based on the type of funds transferred. Comptroller object 3974 is for federal funds and 3975 is for regular revenues. Comptroller object 3986 is for unexpended balance forward-operating transfers in and 7986 is for unexpended balance forward-operating transfers out.

Once the transfer out is completed, there should not be a negative balance on the USAS 62 screen.

USAS Appropriation Lapses and Related T-codes

Appropriation Lapses Coding in USAS

Description / Explanation	T-code	Year-End Eff Date	Doc Type	Batch Type	COBJ	Generated T-code
Lapse Coding for Committed Budget	036	08/31/XX or current date	B	1	7000	N/A
Lapse Coding for Collected Budget	039	08/31/XX or current date	B	1	7000	N/A

Coding for UB Forward in USAS

Coding for Committed Budget

Description / Explanation	T-code	Year-End Eff Date	Doc Type	Batch Type	COBJ	Generated T-code
Transfer Out (UB) of Current Appropriation	040	current date	B	1	7000	N/A
Transfer In To New Appropriation	042	current date	B	1	7000	N/A

Coding for Collected Budget

Requires two steps.

1. Make the Budget Transfer by entering the following four transactions:
   

   Description / Explanation	T-code	Year-End Eff Date	Doc Type	Batch Type	COBJ	Generated T-code
   1(a) Transfer Out Revenue Budget from Current AY	041	current date	B	1	3974 or 3975	N/A
   1(b) Transfer Out Expenditure Budget from Current AY	040	current date	B	1	7000	N/A
   1(c) Transfer In Expenditure Budget to New AY	042	current date	B	1	7000	N/A
   1(d) Transfer In Revenue Budget to New AY	043	current date	B	1	3974 or 3975	N/A

2. Make the Cash Transfer with either steps 2 (a) and (b) or steps 2 (c) and (d).

   If Revenue Transfer, complete steps 2 (a) and (b) – These are balancing T-codes and must be done together.

   Description / Explanation	T-code	Year-End Eff Date	Doc Type	Batch Type	COBJ	Generated T-code
   2(a) Revenue Cash Transfer Out of Current AY	406	current date	J	2, 5 or 8	3974 or 3975	N/A
   2(b) Revenue Cash Transfer In To New AY	405	current date	J	2, 5 or 8	3974 or 3975	N/A

   If Operating Transfer complete steps 2 (c) and (d) – These are balancing T-codes and must be done together.

   Description / Explanation	T-code	Year-End Eff Date	Doc Type	Batch Type	COBJ	Generated T-code
   2(c) Cash Operating Transfer Out of Current AY	404	current date	J	2, 5 or 8	7986	N/A
   2(d) Cash Operating Transfer In to New AY	403	current date	J	2, 5 or 8	3986	N/A

   Note: COBJ 3974 – federal funds; 3975 – other funds; 3986 – operating transfers in

USAS Binding Encumbrances and Payables T-codes

Note: Refer to the Transaction Code Decision Profile (28A), Trans Code Options Profile (28B) and Trans Code Description Profile (28C) for all T-code requirements.

Encumbrance Entry for Agencies Using USAS Only

Record Encumbrance

If no obligation or payment recorded in USAS as of end of reporting period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
For agencies not using USAS encumbrance accounting	207*	08/31/XX or 08/32/XX	Qtr End Date	E	3	Summary	211
For appropriations held outside state treasury	207*	08/31/XX or 08/32/XX	Qtr End Date	E	3	Summary	211
For agencies using USAS encumbrance accounting	210	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A

Liquidate Encumbrance

As of the end of reporting period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record encumbrance liquidation (for agencies using USAS encumbrance accounting) and payable as of end of reporting period, and issue payment in current period (if payment not yet recorded)	231*	08/31/XX or 08/32/XX	Qtr End Date	1,2,3,9	4	Specific	380
Record cancellations (for agencies using USAS encumbrance accounting to correct errors in encumbrance balance; can also be used with current period effective date for payments already made which failed to liquidate encumbrance)	217	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A
Record adjustments (for agencies using USAS encumbrance accounting to increase or decrease encumbrances as needed)	216	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A

Payables (Accruals) in USAS

Record Payable

If no obligation or payment recorded in USAS as of end of reporting period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record payable as of end of reporting period, and issue payment in current period (if payment not yet recorded in current period	225**	08/31/XX or 08/32/XX	Qtr End Date	1,2,3,9	4	Specific	380
Record payable as of end of reporting period (when payment has already been made in current FY; does not generate a warrant)	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421
Record payable as of end of reporting period (to record all expenditures, cash and accrued, for appropriations held outside state treasury)	642	08/31/XX or 08/32/XX	Qtr End Date	U	4, 5	Summary	N/A

Expenditure Transfers and Corrections in USAS

If correcting PCA, appropriated fund, AY or appropriation for previous reporting period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record accrual (Accrued Expenditure Transfer In/Accrued Expenditure Transfer Out; payee identification number required)	467**/468**	08/31/XX or 08/32/XX	Qtr End Date	J, K	4, 8	Specific	471/472

If ETVs processed for previous AY during current period with T-codes 407/408:

Description/Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record payable (T-code 418 requires GL 1049; T-code 418R requires GL 0279)	418*/418R*	08/31/XX or 08/32/XX	Qtr End Date	U	4, 8	Specific	419/419R

If correcting ETVs processed for previous AY during current period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Reverse original ETV (Expenditure Transfer Out/Expenditure Transfer In)	407R/408R	Default	Default	J	4, 8	Specific	N/A
Record accrual (Accrued Expenditure Transfer In/Accrued Expenditure Transfer Out; payee identification number required)	467**/468**	08/31/XX or 08/32/XX	Qtr End Date	J	4, 8	Specific	471/472

If a comptroller object correction will cross LBB object codes:

Note: See the Comptroller Object Profile (D10).

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record accrual (Accrued Expenditure Transfer In/Accrued Expenditure Transfer Out; payee identification number required)	467**/468**	08/31/XX or 08/32/XX	Qtr End Date	K	4, 8	Specific	471/472

Misclassification of Encumbrances or Payables in USAS

If encumbrance recorded as T-code 207 at end of reporting period but should be a payable:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Reverse encumbrance	207R*	08/31/XX or 08/32/XX	Qtr End Date	E	3	Summary	211R
Record payable	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421

If encumbrance recorded as T-code 210 at end of reporting period but should be a payable:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Cancel encumbrance	217	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A
Record payable (requires entry of payee identification number)	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421

If encumbrance recorded with T-code 210 at end of reporting period and processed T-code 231 in current period but should be a payable:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Adjust encumbrance	216	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A
Cancel encumbrance	217	08/31/XX or 08/32/XX	Qtr End Date	E	3	Specific	N/A
Record payable (requires entry of payee identification number)	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421

If payable recorded with T-code 420 at end of reporting period but should be an encumbrance:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Reverse payable	420R*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421R
Record encumbrance	207*	08/31/XX or 08/32/XX	Qtr End Date	E	3	Summary	211

Interagency Payments/Receipt for Goods and Services in USAS

If ITV processed for previous reporting period during current period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record payable as of end of reporting period, and reverse payable in current period (requires entry of payee identification number)	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421

If invoice received during current period but ITV not yet processed:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record payable as of end of reporting period, and record interagency payment in current period (PDT T, or Doc Type T)	225**	08/31/XX or 08/32/XX	Qtr End Date	1, 2, 3, T	4	Specific	380

If correcting an interagency payment that affected previous AY in current period:

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
Record payable (requires entry of payee identification number)	420*	08/31/XX or 08/32/XX	Qtr End Date	U	4	Summary	421
To correct the coding elements in next period	931/931R	08/31/XX or 08/32/XX	Default	J	4, 8	Specific	N/A
Record Due To (accrues and the reverses)	481***	08/31/XX or 08/32/XX	Qtr End Date	T	2	Specific	757

Revenue Adjustments in USAS

Description / Explanation	T-code	Year-End Eff Date****	Quarter Eff Date	Doc Type	Batch Type	COBJ	Generate T-code
If processing revenue adjustments in the current FY	405/406	Default	Default	J	5, 8	Specific	N/A
To correct transactions processed in the previous FY, record accrual (Accrued Revenue Transfer In/Accrued Revenue Transfer Out)	465**/466**	08/31/XX or 08/32/XX	Qtr End Date	J	5, 8	Specific	469/470
If revenue adjustment (T-codes 405/406) has been processed in the current FY but should have been recorded for previous FY, reverse 405R/406R, then 465**/466** or record receivable-unbilled.	121*/121R	08/31/XX or 08/32/XX	Qtr End Date	U	2, 5	Specific	122/122R

* Reversing T-codes.

** Liquidating T-codes (Do not use for Local Funds).

*** T-code 481 is a RTI T-code that accrues and reverses

**** Transactions backdated to the prior fiscal year during September may be entered with an effective date of either Aug. 31 or Aug. 32. Transactions backdated to the prior fiscal year after Sept. 30 when month 12 is closed must be entered with an effective date of Aug. 32. When requesting year-end reports, remember to request period 13.

Note: See the Basis Conversion Adjustments in the AFR website.

USAS Step-by-Step Instructions for Entry of Binding Encumbrances and Payables

Step	Action
1	Analyze Appropriation Balances Review each of your agency’s appropriations on the USAS Appropriation Record Inquiry (62) screen for the period just ended, quarter or fiscal year, for accuracy of Remaining Cash Basis Budget. Review balance types for reasonability, negative amounts, and for reconciliation with the internal system or source document. Note: Analysis should include the remaining cash basis budget balances for all appropriations.
2	Identify and Enter Payables Identify invoices/goods/services received but not yet recorded in USAS. Prepare and enter document(s) to post to accounts payable. (Refer to Binding Encumbrances and Payables T-codes for T-code selections.) The use of summary comptroller objects is allowed. (Refer to Summary Comptroller Objects Sorted by LBB Object.)
3	Identify and Enter Encumbrances (Quarterly-Current AY; Annually-All prior AYs) Identify contractual obligations not yet recorded in USAS. Prepare and enter documents to post encumbrances. (Refer to Binding Encumbrances and Payables T-codes for T-code selections.) The use of summary comptroller objects is allowed. (Refer to Summary Comptroller Objects Sorted by LBB Object.)
4	Review the 62 Screen in USAS for Correct Posting Verify entries made in step two and three above posted to correct period and balance type. Reverse incorrect entries and reenter with correct coding as necessary.
IMPORTANT: Steps five through seven refer to year-end only.
5	Identify and Enter UB Forwards Identify appropriations with authority to carry Unexpended Balances (UB) forward to the next appropriation year (AY). Prepare and enter documents to transfer out budget and cash from the previous AY and to transfer into the new AY. (Refer to Appropriation Lapses and Related T-codes for UB Forward T-code selections.)
6	Return Benefits Identify and prepare documents to return unobligated benefit authority to funding agencies. (Refer to APS 019.)
7	Identify and Enter Lapses Identify remaining appropriation authority to be lapsed. Prepare and enter document. (Refer to Appropriation Lapses and Related T-codes for lapse T-code selections.)
8	Have the Chief Fiscal Officer or Higher Official Approve and Submit the Required Certifications Note: The annual certification must be received within 60 days of the end of the fiscal year. (The recommended due date for GR consolidated agencies is Sept. 30.) The certification for the first three quarters must be received within 30 days of the end of each quarter. See Important Dates.
9	Review Cash Expenditure Activity Review by strategy to prepare for ABEST/USAS reconciliation. Remember to use T-codes 467/468 to correct expenditures by strategy with an effective date of the last day of the reporting period. For fourth quarter ABEST/USAS reconciliation, all correcting USAS entries must be made by Oct. 30 in order to appear correctly in ABEST. (The recommended due date for GR consolidated agencies is Sept. 30.) Expenditures should be correct with regard to PCA, program code, appropriated fund and comptroller object.

USAS Summary Comptroller Objects Sorted by LBB Object

Below are comptroller objects sorted by LBB object that may be used as “summary” object codes for encumbrance and payable transactions. These comptroller objects are considered summary object codes only for reporting encumbrances and payables as required by this Fiscal Policy and Procedure.

USAS COBJs for Funds Held in the State Treasury

LBB Object	Description	Comp Object	Description
1001	Salary and Wages	7002	Salaries and Wages
1002	Other Personnel Costs	7022	Payroll Related Costs – Longevity Pay
1005	Faculty Salaries (Higher-Ed Only)	7008	Higher Ed Faculty Salaries and Wages
1010	Prof Sal-Faculty Equiv (Higher-Ed Only)	7009	Higher Ed Sal-Fac/Acad Equiv Emp
1015	Prof Sal-Extension (Texas Agricultural Extension Service Only)	7011	Higher Ed Salaries-Extension
2001	Professional Fees and Services	7253	Other Professional Services
2002	Fuels and Lubricants	7304	Fuels and Lubricants – Other
2003	Consumable Supplies	7300	Consumables
2004	Utilities	7524	Other Utilities
2005	Travel	7111	Travel
2006	Rent-Building	7462	Rent of Office Bldg/Office Space
2007	Rent-Machine and Other	7406	Rental of Furnishings/Equipment
2008	Debt Service	7801	Interest on State Bonds (TPFA only)
2009	Other Operating Expense	7210	Fees and other charges
3001	Client Services	7643	Other Financial Services
3002	Food for Persons-Wards of State	7316	Food Purchase – Ward of State
4000	Grants	7613	Payments/Grants to Other Political Subdivisions
5000	Capital Expenditures	7373	Furnishings & Equipment

USAS COBJs for Funds Held Outside the State Treasury (Local Appropriated Funds)

LBB Object	Description	Comp Object	Description
1001	Salaries/Wages (Higher-Ed only)	7544	Higher-Ed Non Faculty Salaries/Wages
1002	Other Personnel Costs (Higher-Ed Only)	7535	Payroll Related Costs
1005	Faculty Salaries (Higher-Ed Only)	7545	Higher-Ed Faculty Salaries/Wages
2009	Other Operating Expense (Higher-Ed Only)	7546	Higher-Ed Other Expenses
5000	Capital Expenditures (Higher-Ed Only)	7547	Higher-Ed Capital Outlay

CAPPS Requirements

Encumbrance Entry in USAS for Agencies Using CAPPS

Agencies using CAPPS are considered reporting agencies under APS 018, but do not record encumbrances into USAS when obligations are made:

• An entry must be made in USAS at the end of the first three quarters and year-end using T-code 207 to record the encumbrance amount. See Important Dates. Amounts not encumbered in USAS will be incorporated into the auto lapse algorithm. Please contact your ACO for more information on the centrally run auto lapse algorithm.
• T-code 207 records the encumbrance in the previous period (the period’s ending date must be used for effective date) and reverses with the generated T-code 211 so the encumbrance is not reflected in the current period.
• No entry into CAPPS is required to record encumbrances since the encumbrances are already reflected in the commitment control tables. CAPPS commitment control tables should not be open for appropriation years that are not active in USAS.

Fund Cash Forward in USAS for Agencies Using CAPPS

Agencies using CAPPS also must record fund cash forward in USAS by entering the T-codes below in CAPPS and interfacing that entry to USAS. Fund cash balances not required for payment of outstanding obligations from previous years should be moved to the current year (if authorized by statute or the GAA). Balances may be moved forward to the current year, one year at a time (i.e., to move AY 2021 balances to AY 2023, move 2021 to 2022 then 2022 to 2023).

In CAPPS, enter the letter J in the USAS Document Number.

Field	Entry
Business Unit	AGYXX
Ledger Group	ACTUALS
Fiscal Year	20XX
USAS Document Number	J (leave blank) Number will fill when posted

If cash was received…	Use T-codes…	COBJ
As revenue (Balance Type 12)	405 and 406	3974(XX)/3975(XX)*
As a transfer (Balance Type 20)	403 and 404	3986(XX)*/7986(XX)

Note: * The comptroller object for the collected budget portion of the transactions above should be based on the type of funds transferred. Comptroller object 3974 is for federal funds and 3975 is for regular revenues. Comptroller object 3986 is for unexpended balance forward-operating transfers in and 7986 is for unexpended balance forward-operating transfers out.

CAPPS UB Entries/Lapsing

After completing the instructions for all agencies, make manual UB entries in CAPPS if needed. Use a Budget Journal or a Budget Transfer Journal entry.

Committed Budget Transfer in CAPPS

To transfer a committed budget…	Use account…
From the old appropriation	7000(XX)
To the new appropriation	7000(XX)

Collected Budget Transfer in CAPPS

To transfer a collected budget…	Use account…
Transfer Out Expenditure Budget from Current AY	7000(XX)
Transfer Out Revenue Budget from Current AY	3974(XX)/3975(XX)
Transfer In Expenditure Budget to New AY	7000(XX)
Transfer In Revenue Budget to New AY	3974(XX)/3975(XX)

Collected Cash UB in CAPPS

Agencies using CAPPS may also record revenue and cash in USAS by entering the T-codes below in CAPPS and interfacing that entry to USAS.

In CAPPS, enter the letter J in the USAS Document Number.

Field	Entry
Business Unit	AGYXX
Ledger Group	ACTUALS
Fiscal Year	20XX
USAS Document Number	J (leave blank) Number will fill when posted

If cash was received…	Use T-codes…	COBJ
As revenue (Balance Type 12)	405 and 406	3974(XX)/3975(XX)*
As an operating cash transfer (Balance Type 20)	403 and 404	3986(XX)*/7986(XX)

Note: * The comptroller object for the collected budget portion of the transactions above should be based on the type of funds transferred. Comptroller object 3974 is for federal funds and 3975 is for regular revenues. Comptroller object 3986 is for unexpended balance forward-operating transfers in and 7986 is for unexpended balance forward-operating transfers out.

Non-UB Collected Cash in CAPPS

Agencies using CAPPS may also record revenue and cash in USAS by entering the T-codes below in CAPPS and interfacing that entry to USAS.

In CAPPS, enter the letter J in the USAS Document Number.

Field	Entry
Business Unit	AGYXX
Ledger Group	ACTUALS
Fiscal Year	20XX
USAS Document Number	J (leave blank) Number will fill when posted

Agency	T-code/Title	Appropriation Number	COBJ	Appropriated Fund/ Agency Fund/PCA
Affected Agency	406/Revenue Transfer-Out	Determined by Agency	3970(XX)	Determined by Agency
Affected Agency	405/Revenue Transfer-In	00000	3970(XX)	Determined by Agency

Prior Fiscal Year Collected Cash in CAPPS

After completing the instructions for all agencies, make several manual entries to show the USAS RTI transactions in CAPPS.

The first entry will be a General Ledger journal to Actuals using the coding data from the RTI.

Header Page	Entry
Ledger	ACTUAL
Effective date of transaction	8/31/XX
Reversal of transaction	Beginning of next period or on a specific date

Lines Page	Entry
Debit	7973(XX)
Credit	1050(XX)
Reference Column	Vendor ID and Name

Next when the Liquidation of the Accrued Transfer Out occurs, use the accounting entry template that hits the agency’s Cash account and generates a USAS manual (MAN) T-code.

Note: This transaction will not be sent to the Archive In or to USAS. USAS status flips to N.

Accounting Entry Template Field	Entry
Payment Type	MAN
Template	MANUAL or agency-defined
T-code	MAN
Account	0045(XX)
Appropriated Fund/Agency Fund/PCA	Determined by Agency
Account	7973(XX)

Note: If the collected cash is in a GR Dedicated account or Special Fund, follow the instructions for all agencies in Non-UB collected cash.

Lapsing Appropriations in CAPPS

After completing the instructions for all agencies, agencies using CAPPS will not load budget balances for lapsed appropriations.