The general fund is the primary governmental fund type. In accordance with the GASB Codification, Section 1300.104a, the general fund is used to account for and report all financial resources not required to be accounted for in another fund. The general fund is reported using the current financial resources measurement focus and the modified accrual basis of accounting, under which revenues are recognized when measurable and available and expenditures are recognized when the related liability is incurred.

For financial reporting purposes, the state reports only one general fund. If multiple general funds are maintained for internal or legal purposes, they must be combined and presented as a single general fund in the financial statements.

In the state of Texas, the general fund is subject to a legally adopted budget, which is approved by the Legislature. The approved budget establishes the authorized level of revenues and expenditures and provides the legal authority for financial operations during the fiscal period.

In accordance with the GASB Codification, Section 1300.108, governments must establish the minimum number of separate funds necessary to:

• Comply with legal requirements
• Meet operational needs
  –AND–
• Adhere to the principles of fund classification

General Fund

The only funds classified and reported as the general fund in the agency’s financial statements are:

• Appropriated fund 0001 (general revenue fund)
  –AND–
• Specified consolidated general revenue accounts

All other funds (including those that receive appropriations or transfers from appropriated fund 0001) must be classified and reported in the fund type that best reflects the nature and purpose of the underlying activity. The source of funding does not determine fund classification — the classification is (instead) based on the use and restrictions of the financial resources, consistent with governmental fund reporting principles.

Splitting of Appropriated Fund 0001 into Different GAAP Fund Types

Report all activity associated with appropriated fund 0001 within the general fund type, except for unappropriated receipts as described below. Exceptions to this classification require approval from the agency’s financial reporting analyst to ensure consistency with statewide reporting requirements and generally accepted accounting principles.

Agencies must report programs funded through appropriated fund 0001 (including federal and other special programs) within the general fund, even if they are tracked separately within the agency’s internal accounting system. Do not report these programs as special revenue funds or other fund types unless a separate appropriated fund was statutorily established.

Agencies must record unappropriated receipts collected by the agency during the fiscal year in appropriation 99906. These receipts are required to be swept prior to fiscal year-end. As a result, agencies must not report prior fiscal year unappropriated receipts that were not swept.

For more information, see Categories of Common Statewide Suspense Fund; Category II.

Funds Consolidation

The Legislature periodically reviews the structure of state funds (including the creation of funds, accounts and the dedication of revenue sources). As part of this process, funds that:

• Retain their dedication are classified as consolidated general revenue accounts.
• Lose their dedication are merged into appropriated fund 0001 and are no longer reported as separate funds. When a fund loses its dedication:
  • Its financial activity is incorporated into the general fund.
    –AND–
  • The fund no longer maintains a separate identity for financial reporting purposes.

Agencies affected by fund consolidation must use applicable reporting guidance in the preparation of their Annual Financial Report (AFR) to ensure that all activity is properly classified and presented in accordance with statewide requirements.

Technical Assistance for Funds Consolidation

Legend for Consolidated Funds

The following legend allows agencies to identify the fiscal years referred to in this section for consolidated funds:

FY X0	the fiscal year before consolidation
FY X1	the first fiscal year for the consolidated fund
FY X2	the second fiscal year for the consolidated fund and the last fiscal year funds can be spent that were obligated in FY X0

Do not change the appropriated fund lookup on any D23 fund profile screen. This is the main risk area involving consolidated funds. To ensure the cash balance rolls forward correctly, the FY X1 and FY X2 appropriated fund lookup on the D23 fund must always be the same as the FY X0 D23 fund.

Consolidated Fund/Account that Retained its Dedication

Fiscal Year X1

The USAS screen below is an example of a Fund Profile (D23) screen with correct entry for a consolidated fund that has retained its dedication. The fund has a GAAP fund type 01 for general fund and therefore the activity for this fund is reported in the general fund column on a financial statement.

TEXAS  SD23           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:00 PM 
 LINK TO:                           FUND PROFILE                           PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
                 AGENCY: XXX  FISCAL YEAR: X1    FUND: 0008                   
                  TITLE: CONSOLIDATED FUND WHICH RETAINED DEDICATION            
      APPROPRIATED FUND: 0008   (MUST BE IN D22 APPROP FUND PROFILE)            
              GAAP FUND: 0008    GAAP FUND TYPE: 01                             
         LOCAL FUND IND: N                                                      
           FUND LEVELS DETERMINE THE LEVEL OF CONTROL FOR THE FOLLOWING         
                 (0=NONE, 1=APPROPRIATED FUND, 2=FUND):                         
           APPROPRIATION: 1   AGENCY BUDGET: 0 CASH CONTROL: 1                  
 CASH BALANCE DISP –  IND: N FUND:        %/AMT: 00000000000                    
              DESCRIPTION:                                                      
         CC ORG LEVEL IND: 0       (0=DO NOT POST AGENCY, 1=POST AGENCY)        
  DEPOSITORY INTEREST IND: Y                                                    
         STATE FUND GROUP: 03      (SYSTEM GENERATED)                           
          GAAP FUND GROUP: 01      (SYSTEM GENERATED)     

The following are the only valid GAAP fund types when the consolidated fund indicator on the Appropriated Fund Profile (D22) screen is 0001:

01   General	05   Enterprise	19   Permanent
03   Debt service	06   Internal service	20   Private-purpose
04   Capital projects	10   Pension funds	22   Custodial funds

TEXAS  SD22           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:49 PM 
 LINK TO:                   APPROPRIATED FUND PROFILE                      PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
         APPROPRIATED FUND: 0008                                                
                     TITLE: CONSOLIDATED FUND WHICH RETAINED DEDICATION
          STATE FUND GROUP: 03                                                  
         CONSOLIDATED FUND: 0001   (MUST BE IN D22 APPROPRIATED FUND PROFILE)   
       REPORT ROUTE AGENCY: XXX   (DEFAULT AGENCY TO ROUTE FUND BASED REPORTS; 
                                    MUST BE 000 OR IN D02 AGENCY PROFILE)       
             CASH CONTROL-                                                      
                      TYPE: 1      (0=NO, 1=ABSOLUTE, 2=ADVISORY) 
              

Consolidated Fund/Account that has Lost its Dedication

Fiscal Year X1

The USAS screen below is an example of a Fund Profile (D23) screen for FY X1 with correct entry for the first fiscal year the consolidated fund lost its dedication. This example is for FY X1 and has a GAAP fund type of 01 for general fund and therefore, the activity for this fund is reported in the general fund column on a financial statement. See the previous listing for other valid GAAP fund types. DAFR8660 Fund Cash History or similar report is available for this fund. Note the appropriated fund number and the GAAP fund number are the same for the existing D23 fund.

TEXAS  SD23           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:00 PM 
 LINK TO:                           FUND PROFILE                           PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
                 AGENCY: XXX  FISCAL YEAR: X1    FUND: 0008                   
                  TITLE: CONSOLIDATED FUND WHICH LOST DEDICATION                           
      APPROPRIATED FUND: 0008   (MUST BE IN D22 APPROP FUND PROFILE)            
              GAAP FUND: 0008    GAAP FUND TYPE: 01                             
         LOCAL FUND IND: N                                                      
           FUND LEVELS DETERMINE THE LEVEL OF CONTROL FOR THE FOLLOWING         
                 (0=NONE, 1=APPROPRIATED FUND, 2=FUND):                         
           APPROPRIATION: 1   AGENCY BUDGET: 0 CASH CONTROL: 1                  
 CASH BALANCE DISP –  IND: N FUND:        %/AMT: 00000000000                    
              DESCRIPTION:                                                      
         CC ORG LEVEL IND: 0       (0=DO NOT POST AGENCY, 1=POST AGENCY)        
  DEPOSITORY INTEREST IND: Y                                                    
         STATE FUND GROUP: 03      (SYSTEM GENERATED)                           
          GAAP FUND GROUP: 01      (SYSTEM GENERATED) 

TEXAS  SD22           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:49 PM 
 LINK TO:                   APPROPRIATED FUND PROFILE                      PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
         APPROPRIATED FUND: 0008                                                
                     TITLE: CONSOLIDATED FUND WHICH LOST ITS DEDICATION
          STATE FUND GROUP: 03                                                  
         CONSOLIDATED FUND: 0001   (MUST BE IN D22 APPROPRIATED FUND PROFILE)   
       REPORT ROUTE AGENCY: XXX   (DEFAULT AGENCY TO ROUTE FUND BASED REPORTS; 
                                    MUST BE 000 OR IN D02 AGENCY PROFILE)       

Fiscal Year X2

FY X1 Existing D23 Fund Profile Screen that Rolled Forward to FY X2 with Appropriated Fund Lookup Similar to FY X1

The USAS screen shown below is an example of a Fund Profile (D23) screen with correct entry for remaining cash activity in FY X2 for a consolidated fund that lost its dedication. The activity for this fund is reported in the general fund column on a financial statement. The only activity that must flow through this fund in FY X1 and FY X2 is activity related to FY X0 obligations.

TEXAS  SD23           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:00 PM 
 LINK TO:                           FUND PROFILE                           PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
                 AGENCY: XXX  FISCAL YEAR: X2    FUND: 0008                   
                  TITLE: CONSOLIDATED FUND WHICH LOST DEDICATION                 
      APPROPRIATED FUND: 0008   (MUST BE IN D22 APPROP FUND PROFILE)            
              GAAP FUND: 0008    GAAP FUND TYPE: 01                             
         LOCAL FUND IND: N                                                      
           FUND LEVELS DETERMINE THE LEVEL OF CONTROL FOR THE FOLLOWING         
                 (0=NONE, 1=APPROPRIATED FUND, 2=FUND):                         
           APPROPRIATION: 1   AGENCY BUDGET: 0 CASH CONTROL: 1                  
 CASH BALANCE DISP –  IND: N FUND:        %/AMT: 00000000000 

WARNING: The GAAP fund type lookup on this fund must not be changed for FY X1 or FY X2. If the GAAP fund type look up was changed, perform a review to determine if the agency has a D23 fund that commingled different GAAP fund types within the fund.

New D23 Fund Profile with a Lookup of Appropriated Fund 0001

Create a new D23 fund profile in FY X1 to reflect the information below. The new D23 fund has activity for the respective fiscal years recorded in it. A new D23 fund number is required. If the agency already has an agency fund looking up appropriated fund 0001 and GAAP fund type 01, then it can be used instead of creating a new D23 fund. The agency must ensure that it has adequate records to support possible reporting of the revenue sources for the prior dedicated fund because oversight agencies may request this information.

TEXAS  SD23           UNIFORM STATEWIDE ACCOUNTING SYSTEM    MM/DD/YY 06:00 PM 
 LINK TO:                           FUND PROFILE                           PROD 
                                                                                
 ACTION: R  (A=ADD, C=CHANGE, D=DELETE, N=NEXT, R=RECALL)                       
                 AGENCY: XXX  FISCAL YEAR: X1    FUND: 1008                   
                  TITLE: NEW CONSOLIDATED FUND FOR FUND WHICH LOST ITS DEDICATION
      APPROPRIATED FUND: 0001   (MUST BE IN D22 APPROP FUND PROFILE)            
              GAAP FUND: 0001    GAAP FUND TYPE: 01                             
         LOCAL FUND IND: N                                                      
           FUND LEVELS DETERMINE THE LEVEL OF CONTROL FOR THE FOLLOWING         
                 (0=NONE, 1=APPROPRIATED FUND, 2=FUND):                         
		APPROPRIATION: 1   AGENCY BUDGET: 0 CASH CONTROL: 1                  
 CASH BALANCE DISP –  IND: N FUND:        %/AMT: 00000000000      

Set up the new D23 fund profile for an appropriated fund look up of 0001 and a GAAP fund look up of 0001.

Financial Report Presentation

The general fund, including appropriated fund 0001 and other consolidated dedicated accounts, is presented separately in the combining statements. This requirement includes a combining balance sheet and combining operating statement (see examples at Templates and Sample Exhibits). A column for each USAS D22 fund (appropriated fund/ fund type combination) is presented discretely on the combining statements for all balances and activity. A separate column is included for each consolidated account with a fund balance, even if it lost its dedication. These additional statements assist agencies in their reconciliation to USAS.

If the agency wishes to present further detail on federal or special programs operated from appropriated fund 0001, it may do so with a supplemental schedule. Supplemental schedules are presented separately from the combined or the combining general fund consolidated funds financial statements.

Balance Sheet

All assets, liabilities and fund balances of all consolidated funds and accounts are reported in general revenue. Use the combining balance sheet to report amounts in general revenue fund 0001. Other consolidated general revenue funds may also be included. A suggested format is:

• One column for appropriated fund 0001 (required)
  –AND–
• One column for each consolidated fund/account

Operating Statement

There are two scenarios for presenting the operating statement of consolidated funds.

If the consolidated fund occurred in previous fiscal years, all amounts are merged with the general fund. In this case, each fund with revenues, expenditures and fund balances is reported as part of the general fund on Exhibit II. The combining statement reports general revenue fund 0001 and each consolidated fund/account like the balance sheet columns. For consolidated accounts that lost dedication, report a transfer out for the amount of unobligated consolidated fund balance transferred to agency 902. Since appropriations generally have a three-year life, the once dedicated funds (FY X0) continue to report activity as usual for two fiscal years (FY X1 and FY X2). In the third fiscal year, these accounts report a final transfer out leaving an ending fund balance of zero.

If the consolidation of the fund occurred in this fiscal year, the operating statement treatment is similar to the previous fiscal year’s instructions for the operating statement. This requires reporting the fund activity in a consolidated account and reporting a transfer out to reduce any unobligated fund balance to zero. The general fund on Exhibit II reports a transfer in for that fund balance. The combining statement reports the transfer in under the general revenue fund 0001 or in the appropriate separate consolidated fund.

In accordance with GASB 54, special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes (other than debt service or capital projects). The requirement that special revenue funds be supported by the proceeds of specific revenue sources establishes that at least one restricted or committed revenue source must serve as the foundation of the fund. This revenue source must be expected to continue to comprise a substantial portion of the inflows reported in the fund.

For state agencies, fund classification is determined based on the legal and statutory restrictions governing the use of resources, rather than the source of appropriations. Accordingly, programs funded through appropriated fund 0001 are not reported as special revenue funds unless a specific appropriated fund was established and the revenue meets the restricted or committed criteria.

Special revenue funds may include revenues derived from sources (such as taxes, fees, grants, gifts or intergovernmental revenues) on the condition that the use of those resources is restricted or formally committed to a specified purpose. Expenditures from these funds are typically constrained by statute, grant agreements or other legally enforceable requirements. Resources may be used for operating or capital purposes, depending on applicable restrictions. In addition to the foundational restricted or committed revenue source, other resources may be reported in the fund if they are restricted, committed or assigned to the same specified purpose, such as:

• Transfers (reported as other financing sources, not revenues).
• Investment earnings.
• Other assigned resources.

However, transfers are not considered revenues when evaluating if restricted or committed revenues comprise a substantial portion of inflows, which an evaluation that is based on professional judgment and reasonable expectations, rather than a strict quantitative threshold.

If an agency no longer expects restricted or committed revenues to comprise a substantial portion of inflows, the special revenue fund must be discontinued and agencies must:

• Report remaining resources in the general fund or another appropriate governmental fund.
  –AND–
• Restate beginning fund balances accordingly.

Note: An exception exists for special revenue funds that have existing resources but no expected future inflows, provided the restricted or committed purpose of those resources remains in effect.

Agencies must recognize restricted or committed revenues that are initially received in another fund and subsequently distributed to a special revenue fund as revenue in the special revenue fund to be considered in the substantial portion assessment. Stabilization arrangements generally do not meet the definition of a special revenue fund, as they are typically not supported by a specific restricted or committed revenue source.

Agencies must not use special revenue funds to report resources held for individuals, private organizations or other governments where the state agency does not have administrative involvement or direct financial responsibility. Report such resources in fiduciary funds in accordance with GASB 84.

According to GASB 54, debt service funds are used to account for and report financial resources that are restricted, committed or assigned to expenditure for principal and interest. Debt service funds are used to report resources if they are legally mandated. Financial resources that are being accumulated for principal and interest maturing in future fiscal years are also reported in debt service funds.

Debt service funds are required when the:

• Accumulation and use of resources for debt repayment are legally mandated.
  –OR–
• Resources are being formally set aside for the payment of principal and interest in future fiscal years.

When not legally required, agencies may still use debt service funds to demonstrate accountability for resources dedicated to debt service.

According to GASB 54, capital projects funds are used to account for and report financial resources that are restricted, committed or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Capital project funds exclude those types of capital-related outflows financed by proprietary funds or for assets held in trust for individuals, private organizations or other governments.

Capital project funds focus on sources and uses of available, spendable resources and use the modified accrual basis of accounting. The use of a capital project fund is not required for GAAP compliance. Agencies may report capital-related financial activity within the general fund or another governmental fund, provided that the classification of resources is appropriate. However, capital projects funds are commonly used when:

• Resources are restricted, committed or assigned specifically for capital purposes.
• Legal, contractual or grant requirements necessitate separate accountability.
• The agency seeks to demonstrate financial control and oversight of significant capital projects.

In accordance with GASB 54, permanent funds are used to report resources that are legally restricted to the extent that only earnings (and not principal) may be used for purposes that support programs. The principal (nonexpendable corpus) of a permanent fund must be maintained intact in perpetuity in accordance with legal or donor restrictions. Only the earnings generated from these resources may be expended and such expenditures must be used to support programs that benefit the state or its citizenry.

Permanent funds must be distinguished from fiduciary funds as defined in GASB 84:

• Permanent funds are used when the earnings benefit the state or the public.
• Fiduciary (private-purpose trust) funds are used when the resources benefit specific individuals, private organizations or other governments.

If the beneficiaries are external to the state, agencies must report the resources as fiduciary activities rather than as a permanent fund.

If the agency has new activity believed to be governmental and it does not fit the description of any existing GAAP funds, a new GAAP fund may be requested from and reviewed by the Financial Reporting section.

If the agency wants to request a new GAAP fund, see Requesting an Additional GAAP Fund.