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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

Pass-Through Activity

State Pass-Throughs
State Grant Pass-Through Issues

Vendor Services Provided and Used vs. Subrecipient

At the time the grant is awarded the agency that disburses funds (Agency A) to another agency (Agency B) is responsible for determining if the payment is recorded as a pass-through grant to a subrecipient or a vendor payment. Agency A confirms these decisions in writing on the grant award to Agency B and Agency B records the transaction as determined by Agency A. For state grant subrecipient versus vendor determinations, see Recognition of State Grant Pass-Through Funds.

State vs. Federal Grant Pass-Through

If Agency A determines a payment will be recorded as a grant pass-through transaction, Agency A is also responsible for determining the amount by funding source (such as state and/or federal) and if the payment is recorded as a state grant pass-through or a federal grant pass-through. Agency A must confirm this decision in writing on the grant award at the time the grant is originally awarded. If the funds for the grant program:

  • Originate from state appropriations, the pass-through is classified as a state grant pass-through.
  • Were initially received from the federal government, the pass-through is classified as federal.

Confirmations Required

Agency A must confirm the above decisions in writing to Agency B and Agency B must record the transaction as determined by Agency A to avoid disputes. Both parties must sign the confirmation.