Reporting Requirements for Annual Financial Reports of State Agencies and Universities
Pass-Through Activity
State Pass-Throughs
Recognition of State Grant Pass-Through Funds
When your agency receives state dollars from another state agency, classify the interfund activity as a state grant pass-through (subrecipient) or as a vendor/interfund service provided and used type of activity — in other words, a vendor payment. The following is a list of characteristics to help distinguish between a state grant pass-through and a vendor/interfund service provided and used activity.
| Characteristics of a State Grant Pass-through From/To Another State Agency | Characteristics of Vendor Activity Between State Agencies (Vendor Payment) |
|---|---|
| The paying/grantor agency received an appropriation with the authority to grant that money to another agency. | The receiving agency has contracted to perform a service for, or on behalf of, the paying agency but they did not apply for or receive a grant. |
| The receiving agency was granted the dollars based on meeting specific qualifications. | The paying/grantor agency receives services that are quantifiable based on time, piece completed, etc. |
| The paying/grantor does not directly receive any consideration or benefit in exchange for the funds. | The paying/grantor agency receives some direct benefit for exchange of funds. |
| Report these funds in AFR line item State Grant Pass-Through Revenue/Expense. | Report these funds in AFR line item Other Sales of Goods and Services. |
The following COBJs can only be used when the above characteristics of a state grant exist:
- COBJ 3725 – State Grant Pass-Through Revenue, Non-operating
- COBJ 7614 – State Grant Pass-Through Expenditure, Non-operating
- COBJ 3842 – State Grant Pass-Through Revenue, Operating
- COBJ 7615 – State Grant Pass-Through Expenditure, Operating
For state grant pass-through revenue and expenditures/expenses, the grant name, agency name and agency number that the grant passed from/to must be identified and included in the SPTR entries. Contact your financial reporting analyst for assistance.
The classification of the money passed between agencies is the key to accurate reporting by both agencies. The chart below shows examples of current programs/grants from the Texas Higher Education Coordinating Board and how they must be classified for universities.
| Program/Grant | COBJ Classification* | Fund | Appn. |
|---|---|---|---|
| TX College Work Study | University determination | 0001 | 13155 |
| TX Grant Program | University determination | 7999 | 99999 |
| Engineering Recruitment Program | University determination | 9999 | 13138 |
| Advanced Research Program | 3842 | 0001 | 13020 |
| College Readiness Initiative | University determination | 0001 | 13132 |
| Top Ten Percent Scholarship Program | University determination | 7999 | 99999 |
| * The Advanced Research Program is classified as state grant pass-through revenue, operating. The university determines the revenue classification of the remaining programs. To qualify as operating pass-through revenue, the grant must finance a program the university would normally undertake. If the pass-through revenue is supplemental to on-going projects and the university would conduct the project regardless of the additional funds, the revenue is classified as operating pass-through revenue. Once the university determines the classification of each program, contact your appropriations control officer (ACO) to make sure all the appropriate USAS screens are updated with the correct COBJs. | |||
Pass-Through Activity Between Universities
Universities must report all state grant pass-through activity that occurs between other agencies and universities on their proprietary operating statements.