Reporting Requirements for Annual Financial Reports of State Agencies and Universities
General Revenue Reconciliation
Payroll-Related Costs Appropriated to the Employing Agency
If an agency receives an appropriation for payroll-related costs, the agency reports legislative appropriation revenue and the associated costs as expenditures in its AFR. These amounts are reported in the GR Reconciliation web application in the following columns and rows:
- OASI (Column C) – Lines 100100, 200100, 200800 and 600200
- Retirement (Column D) – Lines 100100, 200200, 200800 and 600200
- ORP – Article III (agencies only) (Column E) – Lines 100100, 200300, 200800 and 600200
- Insurance (Column F) – Lines 100100, 200400, 200800 and 600200
- GIP (HE only) (Column G) – Lines 100100, 200500, 200800 and 600200
- BRP (agencies only) (Column H) – Lines 100100, 200600, 200800 and 500100
- Salary/Longevity (Column I) – Lines 100100, 200700, 200800 and 500200
Paid on Behalf Payroll-Related Costs Appropriated to a Central Agency
Payroll costs paid by a central agency on behalf of another agency are reported in the state CAFR based on financial statements and records obtained from the central agency, and are not compiled from the individual agency data. Previously, agencies were required to enter the expense and an associated revenue for payroll-related costs paid on their behalf. These costs must no longer be entered into USAS by the employing agency. The following rows associated with payments made on behalf of agencies are no longer automatically populated:
- 400100 – Retirement
- 400200 – Insurance
- 400300 – Unemployment
TWC and ERS will continue to provide agencies with information on benefits paid on their behalf.
Universities must continue to include the benefits paid on their behalf as an expense and the associated additional appropriation revenue on their operating statement. The amounts must not be entered into USAS. The USAS and Interagency Activity Certification Form requires component universities to certify that legislative appropriation (original and additional) revenues as calculated on the GR Reconciliation web application match either USAS or the statement of revenues, expenses and changes in net position.
Since the expense and associated revenue for benefits paid on behalf are not included on the operating statement in USAS, they also must not be included on the statement of cash flows (SOCF). The expense on the hard copy AFR associated with these benefits must not be included in the “payments to employees” line item under the cash flows from operations category. The associated appropriation revenue must not be included in the “proceeds from appropriations” line item under the cash flows from noncapital financing activities category.
If both line items are not excluded, cash and cash equivalents on the SOCF will not tie to the balance sheet. Also, cash flows from operations will not reconcile to operating income if the expense is excluded on the operating statement but not on the SOCF.
Universities have the option of manually populating lines 400100, 400200 and 400300 on the GR Reconciliation web application.
If there are significant differences between what the Comptroller’s Financial Reporting section expects and what is actually reported in the university’s AFR for “paid-on-behalf payroll-related costs,” the Financial Reporting section will request a schedule to be submitted reconciling the USAS data to the hard copy AFR.
Agencies that are not Universities
Agencies (that are not universities) no longer include payroll-related costs paid on their behalf in their operating statement unless special circumstances require that they be included (such as with an audited AFR that reports appropriated fund 0001). If this is the case, include the paid-on-behalf payroll-related costs in the agency’s internal system and the audited AFR — but not in USAS. The amounts recorded for paid-on-behalf payroll-related costs are relatively small for insurance, retirement and unemployment benefits, in part due to:
- The majority of paid-on-behalf payroll-related costs of agencies for insurance is for retiree insurance — rather than for active employee insurance. The cost of providing retiree health insurance is paid by the state as specified in the General Appropriations Act, subject to proportionality.
- The majority of paid-on-behalf payroll-related costs for retirement is for Judicial Retirement System (JRS) Plan II retirement as well as a small amount of supplemental retirement for law enforcement officers.
- TWC is reimbursed 50 percent of unemployment benefits for former state employees paid from general revenue. This reimbursement is also subject to proportionality.
Do not enter these paid-on-behalf payroll-related costs into USAS for appropriated fund 0001.
Agencies with audited financial statements that include appropriated fund 0001 may report paid-on-behalf benefits in the hard copy audited AFR. If there are significant differences between what the Comptroller’s Financial Reporting section expects and what is actually reported in the agency’s AFR for “paid-on-behalf payroll-related costs,” the Financial Reporting section will request a schedule to be submitted reconciling the USAS data to the hard copy AFR.