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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 32 – Fund Balances

Note 32 applies to all agencies that report fund balances for governmental funds if the balance is being classified as anything other than the default for the fund type.

The required format for the note is a Microsoft Word document with the header information (agency name/number and note number/name) as described in Note 32 Sample sent as an attachment in an email to

GASB 54 establishes financial reporting standards for fund balances. Agencies must classify all fund balances as nonspendable, restricted, committed, assigned or unassigned.

  • Nonspendable — includes amounts that cannot be spent because they are either:
    • not in a spendable form
    • they are legally or contractually required to be maintained intact
  • Restricted — includes amounts that can be spent for a specific purpose and there must be an external restriction placed on the fund (such as a constitutional provision, restrictions from external resource providers or through enabling legislation).
  • Committed — includes amounts that can only be spent on a specific purpose as stipulated by action of the government’s highest level of decision-making authority.
  • Assigned — includes amounts intended to be used for a specific purpose but do not meet the requirements to be classified as restricted or committed.
  • Unassigned — the residual classification for the general fund for all spendable amounts not included in the other classifications. Unassigned can only be used outside of the general fund if a fund has an overall negative balance.

Each fund type is set up to default to one of the following classifications at year-end:

  • FT01, only GAAP fund 0001 — general fund that defaults to unassigned
  • FT01, not GAAP fund 0001 — typically GR dedicated funds that generally default to committed
  • FT02, FT03 and FT04 — special revenue, debt service and capital project funds that generally default to restricted
  • FT19 — permanent funds that generally close to non-spendable for permanent fund corpus

If the following funds have a balance, they are always classified only as:

  • GAAP Fund 0599 (Economic Stabilization Fund) — Unassigned
  • GAAP Fund 0802 — Committed
  • GAAP Fund 0900 — Assigned

For any governmental fund (if an agency uses a classification other than the default or assigned) the agency needs to cite the specific covenant, provision, federal requirement or court order causing the restriction or commitment.

For all other funds (if an agency is reporting a fund balance for a fund that is anything other than its default classification) the agency needs to cite the specific covenant, provision, federal requirement or court order causing the restriction or commitment or it needs to be reclassified.

For more information on fund balance reclassifications, see Allocation of Fund Balance or Net Position.

Glenn Hegar
Texas Comptroller of Public Accounts
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