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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Interfund Activity

SECO Federal Revolving Loans

Background

In 2009, the State Energy Conservation Office (SECO) began offering a federal revolving loan program made available through the American Recovery and Reinvestment Act (ARRA). This program is a low-interest loan program intended to assist governmental entities in financing their energy-related cost-reduction efforts using the program’s “Loan Assistance for Building Energy Efficiency and Retrofit Activities” established by the Notice of Loan Fund Availability (NOLFA) issued in the Texas Register on Oct. 30, 2009.

Financial Accounting Treatment

The accounting treatment of the revolving loan program is similar to the LoanSTAR program. An interfund receivable/payable must be established to account for the loan proceeds.

Repayment interest from the loan program is reinvested in the program and considered to be program income. Therefore, report the interest in conjunction with the loan funds as part of the interfund receivable/payable each year.

SECO/Agency Year-End Balance Reconciliation Timeline

SECO provides agencies with their loan balances after each fiscal year-end. The following reporting timelines were established to assist agencies in ensuring the amounts reconcile:

  • On or before Sept. 8 — SECO’s interagency contact person emails a loan activity report to each agency’s interagency contact person.
  • On or before Sept. 15 — Agencies must respond to SECO by email to report the amount the agency will be reporting as current and non-current liabilities.

If an agency does not respond to SECO by Sept. 15, SECO uses its estimates to determine the current and non-current interfund receivable and payable to be presented on the AFR. These amounts must be used for both SECO and the other agency and may result in an adjusting entry by the Financial Reporting section to reconcile the balances.

SEFA Reporting

SECO SEFA Impact

As the funds are expended, SECO records direct federal revenue and expenditure for this program in SEFA. No federal pass-through expenditure is recorded. This results in a reconciling item on SEFA Note 2 equal to the amount of the reinvested repayment interest expended for the current year. This is an “Other Reconciling Item” on SEFA Note 2 and must be entered by the Comptroller’s Financial Reporting section. SECO must communicate the amount of the reconciling item to the Financial Reporting section in order to reconcile SEFA Note 2. In addition, SECO includes these loans in its SEFA Note 3(b) under the applicable ALN. For Section 1512 Reporting, SECO reports as a sub-recipient of an awarded amount from the Department of Energy.

Agency SEFA Impact

Agencies must not report the loan proceeds as federal revenue or federal pass-through revenue in SEFA. SECO is responsible for the full SEFA reporting related to the federal revolving loan program.