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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

COVID-19 and the CARES Act

General Information

The United States Congress issued the following Acts to address the COVID-19 pandemic, which has adversely affected the United States since March 2020:

Name of Act Acronym Enacted
Coronavirus Preparedness and Response Supplemental Appropriations, 2020 CPRSA Act March 6, 2020
Families First Coronavirus Response Act FFCRA March 18, 2020
Coronavirus Aid, Relief, and Economic Security CARES Act March 27, 2020
Paycheck Protection Program and Health Care Enhancement PPP & HCE Act April 24, 2020

The President of the United States declared the COVID-19 pandemic a nationwide disaster on March 13, 2020, pursuant to Sec. 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). The Federal Emergency Management Agency (FEMA) issued a release March 24, 2020 stating federal emergency aid is available for the state of Texas to supplement the state, tribes and local recovery efforts in the areas affected by the COVID-19 pandemic beginning on Jan. 20, 2020.

The 2020 Compliance Supplement, Appendix VII provides limited reporting and compliance guidance for federal COVID-19 awards. An additional COVID-19 addendum is expected to be released during the fall of calendar year 2020, providing additional guidance about certain COVID-19 programs.

The Comptroller’s office established appropriated fund 0325 (the Coronavirus Relief Fund) to track CARES Act federal funding. View the fund profile in USAS on the Appropriated Fund Profile (D22) screen. According to established guidelines in the USAS Coding Instructions, agencies that expect receiving CARES Act funds must create a profile in the Fund Profile (D23) screen for appropriated fund 0325.

COVID-19 Funds in SEFA

Identify COVID-19 funds separately in the Schedule of Expenditures Federal Awards (SEFA) and on the Federal Audit Clearinghouse data collection form. The SEFA web application contains the CFDAs associated with COVID-19 funding. Agencies must designate funds received and expended for COVID-19 programs in the SEFA web application by:

  • Using the C designation for batch uploads
    —OR—
  • Selecting the COVID-19 checkbox for individual record entries.

Identify COVID-19 expenditures separately in the SEFA web application whether the federal funds are from the CARES Act or another federal act or award. The same CFDA in the SEFA web application may include both COVID-19 and non-COVID 19 expenditures.

If the agency received a COVID-19 federal award that does not require a federal expenditure to record the federal revenue, the agency must record either a:

  • Reconciling item in SEFA Note 2
    —OR—
  • Deferred revenue in SEFA Note 7

Use the SEFA Note 2 reconciliation to identify recorded revenue that does not require a matching expenditure (such as the allowable reimbursement of foregone revenue). Use SEFA Note 7 to record deferred revenue if the expenditure will be recorded in a future fiscal year.

Reporting CARES Act in the AFR

For financial reporting purposes, each agency that receives funding under the CARES Act must set up its D23 fund 0325 profile as follows:

  • D23 fund number: 0325
  • D22 appropriated fund number: 0325
  • D24 GAAP fund number: 0325
  • D21 GAAP fund type:
    • Use the fund type of the existing federal program receiving enhanced CARES Act funding. If this fund type is other than FT01 or FT05, contact your financial reporting analyst.
    • For new federal funding use either:
      • FT01 for governmental funds
      • FT05 for proprietary funds

The above fund structure satisfies the transparency reporting needs for separate tracking of CARES Act activities — but CARES Act activity is not presented as a separate column on the fund financial statements. Under this structure, CARES Act activity is reported within the normal operating fund activity of the fund in which the regular benefits were accounted.

CARES Act funds held outside the state’s Treasury (in Treasury Safekeeping Trust or in external federal trust accounts) are not required to be reported using appropriated fund 0325. In these cases, CARES Act activity is blended with the normal operating activity and not reported separately on the face of the financial statements. Report the shared CIST balance for appropriated (D22) fund 0325 in the AFR. This is an exception to the traditional reporting of CIST balances by the controlling agency.

For more information, contact your financial reporting analyst.