Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Pass-Through Activity

State Pass-Throughs
Recording State Grant Pass-Through Expenditures

State grant pass-through expenditures/expenses can be recorded in USAS in several ways:

• When the activity occurs within the state treasury, use the RTI process with T-code 274, state grant pass-through expenditure (7614 or 7615) COBJs (see RTI Table 1).
• When the pass-through is expended to local funds from cash in state treasury (CIST) funds, use the RTI process with T-code 268 to generate payment (see RTI Table 11).
• Agencies that do not expend the funds from CIST funds use generic T-code 642 to record the expenditure when reconciling their AFR to USAS.

Note: Run the Interagency/Interfund Activity reports (located in the FMQuery–SIRS Main Menu; select USAS Research Tools in the General Ledger Reports drop-down menu) to assist agencies with recording pass-through grant expenditure/expenses. These reports show the amount of cash expenditures/expenses using COBJ 7614 — state pass-through expenditures, non-operating and COBJ 7615 — state pass-through expenditures, operating. Contact your financial reporting analyst for additional help.

Correction of State Grant Pass-Through Expenditure

When a warrant is generated, the AGL is on the expenditure/expense general ledger (GL) account. If there are data entry errors for the incorrect COBJ and/or a blank or incorrect AGL, see the following sections that list the necessary correcting entries.

Correcting Blank or Incorrect AGL on Pass-Through Expenditures/Expenses

When correcting pass-through expenditures/expenses with T-codes 407/408 or 467R/467, be sure to use the recipient’s correct vendor number. This allows the Comptroller’s office to properly prepare the cash basis pass-through expenditure/expenses report to help agencies reconcile their pass-through amounts at fiscal year-end.

The process to correct the AGL on pass-through expenditures/expenses is as follows:

If the entries are recorded BEFORE Aug. 31, 20CY:

Accounting effect of entries recorded BEFORE Aug. 31, 20CY:

After fiscal year-end, if a USAS transaction has a blank AGL that posted to CIST (GL0045) or expenditure control-cash (GL 5500), corrections can no longer be made by reversing the original T-codes because cash transactions cannot be backdated. Therefore, correct the transaction using the expenditure transfer process outlined as follows:

If the entries are recorded AFTER Aug. 31, 20CY:

Accounting effect of entries recorded AFTER Aug. 31, 20CY:

Generated Entries Note: T-code 467 posts as of the effective date of this transaction and generates a cash entry (T-code 471) that posts on the system management date. If this entry is backdated, the generated entry posts in the next period.

Correcting COBJ on Pass-Through Expenditures/Expenses

Be especially cautious when correcting COBJs by ensuring the COBJs for Agency A still match the corresponding COBJs for Agency B. For example, if Agency A already confirmed with Agency B that a state grant pass-through COBJ was used and later decides to change the object to a federal grant pass-through COBJ, Agency B must be notified of the change before the interagency deadlines to allow the correction to be made on both sides of the pass-through.

When correcting pass-through expenditures/expenses with T-codes 407/408 or 467R/467, be sure to use the recipient’s correct vendor number. This enables the Comptroller’s office to properly prepare the cash basis pass-through expenditure report to help agencies reconcile their pass-through amounts at fiscal year-end.

The process to correct the COBJs on pass-through expenditures/expenses is as follows:

If the entries are recorded BEFORE Aug. 31, 20CY:

Accounting effect of entries recorded BEFORE Aug. 31, 20CY:

If the entries are recorded AFTER Aug. 31, 20CY:

Accounting effect of entries recorded AFTER Aug. 31, 20CY:

Generated Entries Note: T-code 467 posts as of the effective date of this transaction and generates a cash entry (T-code 471) that posts on the system management date. If this entry is backdated, the generated entry posts in the next period.

Correcting D23 and GAAP Fund on Pass-Through Expenditures/Expenses

If at fiscal year-end an agency realizes the D23 fund(s) and/or GAAP fund(s) are incorrect for a pass-through transaction that was already coordinated and is in balance with the other agency, the Comptroller’s office recommends the following method to correct the error. This discrepancy may occur due to an occasional immaterial coding or data entry error.

If the incorrect D23 fund and the correct D23 fund are both within the same GAAP fund, no entry is required by the Comptroller’s office, although the agency may choose to do the entry if needed for internal purposes. If the GAAP fund is incorrect, the Comptroller’s office requires the agency to make the correction. In both situations, the Comptroller’s office recommends the agency make the correction within its own agency to avoid having to re-coordinate with the other agency.

If the D23/GAAP fund is the only error, the agency may leave the pass-through due from/due to as is and run the GAAP fund adjustment through other expenditures/other operating expenses using COBJ 7970 outlined as follows:

If the entries are recorded AFTER Aug. 31, 20CY between different GAAP funds:

Accounting effect of entries recorded AFTER Aug. 31, 20CY between different GAAP funds:

Generated Entries Note: T-code 467 posts as of the effective date of the transaction and generates a cash entry (T-code 471) that posts on the system management date. If this entry is backdated, the generated entry posts in the next period.