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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

General Accounting

Governmental Reporting Overview
Governmental Funds

The financial statements used to present governmental funds are:

  • Government-wide financial statements:
  • Fund financial statements:
    • Balance sheet
    • Statement of revenues, expenditures and changes in fund balances

      Note: Present a governmental fund balance sheet containing deferred outflows of resources and/or deferred inflows of resources, if applicable, in the following format:

      Assets + deferred outflows of resources = liabilities + deferred inflows of resources + fund balance

The fund financial statements for governmental funds are presented using the current financial resources measurement focus and the modified accrual basis of accounting.

GASB 34, as amended by GASB 63, requires the following format presentation for the governmental funds balance sheet:

(Assets + deferred outflows of resources) = (liabilities + deferred inflows of resources) + (fund balance).

GASB 34 requires the elements of the governmental funds statement of revenues, expenditures and changes in fund balances to be presented in the following order:

  • Revenues
  • Expenditures
  • Excess (deficiency) of revenues over expenditures
  • Other financing sources and uses (including transfers)
  • Special items
  • Extraordinary items
  • Net change in total fund balance
  • Fund balance beginning of period
  • Fund balance end of period

Initially report inventories and prepaid items as an asset at the time of purchase and defer the recognition of an expenditure until the period in which the inventories are consumed or the prepaid items are used.

Governmental fund reporting focuses primarily on the sources, uses and balances of current financial resources and often has a budgetary orientation. The governmental fund category includes the general fund, special revenue funds, capital projects funds, debt service funds and permanent funds.

Or click on the headings below to open a topic individually.

General Fund (Fund Type 01) [+]

The general fund is the primary governmental fund type. GASB Codification, Section 1300.104a, states that the purpose of a general fund is “to account for all financial resources except those required to be accounted for in another fund.” In most governments, the general fund is a very active fund and can become quite complex due to the range of activities (such as administration of the various branches of government).

General funds have all the characteristics of governmental funds. Revenues are recognized when measurable and available. Expenditures are recognized when the liability is incurred.

For financial reporting purposes, an agency can only have one general fund. If several such funds exist, combine them into one fund as long as they are all part of the general government. Most general funds are required by statute to have a budget approved by the legislative body. The approved budget sets the nature and scope of financial operations by setting amounts for sources of revenues and for purposes of expenditures and provides the legal authorization for expenditures.

General Fund (0001) and Funds Consolidation [+]

GASB Codification, Section 1300.108, states: “The general rule is to establish the minimum number of separate funds consistent with legal specifications, operational requirements and the principles of fund classification discussed above.” GASB Codification, Section 1300.106, specifically states that a government shall report only one general fund. However, certain options exist with regard to the establishment and classification of funds under GAAP.

General Fund

Appropriated fund (general revenue fund 0001) and specified consolidated accounts are the only funds classified in the general fund on an agency’s report. All other funds, even though they receive their funding from appropriated fund 0001, are classified as another fund type that fits each fund’s individual usage.

Splitting of Appropriated Fund 0001 into Different GAAP Fund Types

All general revenue fund activity, except unappropriated receipts, is reported in the general fund type. Your agency’s financial reporting analyst must approve exceptions to this rule.

Unappropriated receipts collected by the agency during the year must be in appropriation 99906, GAAP fund 1000, and fund type 09, to be swept prior to fiscal year-end. Therefore, no reporting is necessary for fund type 09. Do not report prior year unappropriated receipts that were not swept. For more information, see Categories of Common Statewide Agency Fund; Category II.

Report federal and special state programs operated through appropriated fund 0001 within the general fund. Even though an agency’s internal accounting system may identify these programs separately, they are not reported as special revenue funds or any other fund type unless a specific appropriated fund number was assigned for these programs.

Funds Consolidation

Occasionally the Legislature reviews the creation of funds, accounts and the dedication of revenues. The funds retaining their dedication are referred to as consolidated general revenue accounts. The funds losing their dedication are merged with the general revenue fund (appropriated fund 0001) and lose their identity as a separate fund.

The following guidance is provided for reporting of the consolidation by impacted agencies in the agency’s AFR.

Technical Assistance for Funds Consolidation
Legend for Consolidated Funds

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

FY X0 the year before consolidation
FY X1 the first year for the consolidated fund
FY X2 the second year for the consolidated fund and the last 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 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 10 Pension funds
03 Debt service 06 Internal service 19 Permanent
04 Capital projects 09 Agency funds 20 Private-purpose
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 X1

The USAS screen below is an example of a Fund Profile (D23) screen for FY X1 with correct entry for the first year the consolidated fund lost its dedication. This example is for fiscal 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 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 should 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 should not be changed for FY X1 or X2. If the GAAP fund type look up was changed, perform a review to determine if an 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 an 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 years, all amounts are merged with the general fund. In this case, each fund with revenues, expenditures and fund balances are 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 years (FY X1 and FY X2). In the third 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 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.

Consolidated Funds Split Between Fund Types

If your agency has consolidated funds that are reported both in an operating fund and in a GAAP agency fund type (FT09), use different USAS agency level funds to separately distinguish between the two. Enter balances and transactions consolidated in the general revenue fund portion separately from the balances and transactions for the GAAP agency fund type. The GAAP agency fund types are not considered part of the consolidation for reporting purposes. This requires agencies to separately report any such funds considered to be in a GAAP agency fund type. The assets of the clearing fund that pertain to other funds are reported in the funds they are cleared to (for example, unappropriated collections and pass-through funds).

Special Revenue Fund (Fund Type 02) [+]

Per 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 term “proceeds of specific revenue sources” establishes that one or more specific restricted or committed revenue source is the foundation for a special revenue fund.

Revenue for these funds can come from a variety of sources (such as taxes, fees, gifts and grants or contributions from other governments). The expenditures from these funds are normally restricted by statute, charter provisions, local ordinance or grant agreements. The funds may be used for operations or capital outlay as legal restrictions mandate. Special revenue funds are commonly used for:

  • Education
  • Highways
  • Libraries
  • Road maintenance
  • Business licensing
  • Parks
  • Museums

Do not use special revenue funds to account for resources held for individuals, private organizations, or other governments. These types of resources are accounted for in fiduciary funds.

Revenues that are restricted or committed should continually comprise a substantial portion of the inflows reported in a special revenue fund. Consider:

  • If restricted or committed revenues that continually comprise a substantial portion of inflows are based on expectations – not necessarily a quantitative calculation, and
  • That transfers are not considered revenues for assessing criteria.

Discontinue reporting the special revenue fund if the agency no longer expects restricted or committed revenues to comprise a substantial portion of inflows.

  • Report remaining resources in the general fund or another special revenue fund with a similar purpose and restate beginning fund balances.
    • There is an exception for special revenue funds with existing resources but no expected future inflows.

With the foundation of restricted or committed revenues, other resources may also be reported in the fund if those resources are restricted, committed or assigned to the specified purpose of the fund. Other resources include:

  • Transfers
  • Investment revenue
  • Other assigned revenues

Specific restricted or committed revenues initially received in another fund and subsequently distributed to a special revenue fund must be reported as revenue in the special revenue fund to qualify for “substantial portion” assessment. For example, a dedicated property tax whose use is restricted for a purpose reported in a special revenue fund when the taxes are collected by the general fund.

Stabilization arrangements usually will not meet the definition of a special revenue fund because they are often not derived from a specific revenue source.

Disclose in the notes for each major special revenue fund:

  • The purpose of the fund
  • Revenues and other resources reported in the fund

The use of special revenue funds is not required for conformity with GAAP under NCGA Statement No. 1, Governmental Accounting and Financial Reporting Principles, as adopted by GASB 1 and should not be used unnecessarily. Please contact your financial reporting analyst regarding the possible use of fund type 01 instead.

Special revenue funds are very common, even though their use is essentially voluntary. GAAP does require the use of a special revenue fund to account for the general fund of a legally separate entity (component unit) that is blended with the government. In addition, GAAP requires state governments to use either a special revenue fund or a general fund to account for the administration of the federal food stamp program. The distinction for maintaining separate accounting treatment of specific revenues is determined solely by the presence of legal mandates on the expenditures of the funds. Revenues not subject to definite legal restrictions are not designated as special revenues.

Debt Service Fund (Fund Type 03) [+]

Per 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 years are also reported in debt service funds.

A debt service fund commonly services bond issues and liabilities under capital leases, notes, time warrants, lease-purchase agreements, special assessment notes, installment purchase agreements and other forms of general government debt securities and agreements.

Capital Projects Fund (Fund Type 04) [+]

Per 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 that will be 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. The activities accounted for in a capital project fund may be accounted for in the general fund. However, capital project funds facilitate management and control over most project expenditures and budgets, especially if separate funds are established for each project.

Permanent Fund (Fund Type 19) [+]

Permanent funds report resources legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs — for the benefit of the government or its citizenry.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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