Yes. If the related phase has moved from construction in progress (CIP) to capital assets, the incurred cost is recorded as a capital asset. Contact your state property accounting analyst with project phase questions.

In these arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt obligation and used by third-party obligors during their activities. Payments from third-party obligors are intended to cover and coincide with debt service payments. During those arrangements, issuers retain the titles to the capital assets. Those titles may or may not pass to the obligors at the end of the arrangement. If the title:

• Passes to the third-party obligor at the end of the arrangement, the issuer will not recognize a capital asset.
• Does not pass to the third-party obligor and the third party has exclusive use of the entire capital asset during the arrangement, the issuer will not recognize a capital asset until the arrangement ends.
• Does not pass to the third-party obligor and the third party has exclusive use of only portions of the capital asset during the arrangement, the issuer (at the inception of the arrangement) will recognize the entire capital asset and a deferred inflow of resources.

No. A statement of cash flows is not required for discrete component units (FT15). Only an agency that has enterprise funds (FT05) and internal service funds (FT06) must submit a copy of its annual financial report’s statement of cash flows.

Yes. Record a due from/due to USAS entry. For more information, see Due From/ Due to Within Same Agency.

Yes. Compensable leave liability is reported in Exhibit I as shown on the Agency Template Exhibit I located in the Templates & Sample Exhibits. The amounts tie to Note 5 balances. For additional information, see Employee Compensable Leave.

Yes. They must be included in your combined Exhibit I, as the exhibit notates. The amounts tie to Note 2 and Note 5 balances. Unless you are an agency with independent audits required by statute, the Comptroller’s Financial Reporting section does not require these exhibits as a part of the AFR submission package and does not reconcile them to USAS or the notes. These exhibits are provided for agency reporting needs.

Yes. The DAFR8580 at the D23 fund level (4) is post-close and shows the allocated ending fund balance.

Yes. Agencies can use the following Working Papers templates to allocate fund balances:

• Fund Balance Governmental Activities, Allocating FT01 (Excel)
• Fund Balance Governmental Activities, Allocating FT02, FT03 and FT04(Excel)
• Fund Balance Governmental Activities, Allocating FT19 (Excel)

Custodial funds are generally held outside the state treasury. Do not use a T-code that debits or credits GL account 1149 – Funds Held for Others. By definition, the purpose of custodial funds is for assets that are held on behalf of individuals or entities other than the state of Texas.

The activity reported in FT22 includes revenues and expenditures. Reporting only the adjustments to balance sheet accounts does not follow the requirements of GASB 84 and causes imbalances on the CR111S.

Record FT22 activity using the following T-codes:

Balance Sheet

• 646/647 (Reversing)
• 644/645

Operating Statement

• 628/628R (Transfers Out)
• 629/629R (Transfers In)
• 642/642R (Expenditures)
• 643/643R (Revenues)

Restatements

• 454/454R

The General Revenue Reconciliation web application is no longer available to agencies.

Certification is no longer necessary in the General Revenue Reconciliation web application.

The financial reporting analysts will communicate with agencies to ensure the GR Reconciliation balances are correct prior to the Oct. 1 deadline for GCAs and the Nov. 1 deadline for FRAs.

Agencies may request their report workbook from their financial reporting analyst beginning Sept 1.

The Ad Hoc review reports are still transmitted to agencies (as usual) to assist agencies with their internal reconciliation process.

GR Reconciliation reports may be run as often as the agency needs them in order for the agency to successfully complete its three-way reconciliation. Agencies may request updated GR Reconciliation workbooks from their financial reporting analyst.

To summarize, the data in the GR Reconciliation web application was migrated to Workiva. The Comptroller’s financial reporting section has automated the existing GR queries, which updates the data several times a day, providing “real time” data. This creates the adjusting entries that the appropriation control officer and the financial reporting analyst then uploads to USAS.

Agencies will have the opportunity to review the USAS entries. Each agency may request a copy of its workbook from its assigned financial reporting analyst. The workbook includes the GR Reconciliation worksheet, the analysis and the journal entries.

There are no changes specific to the GR consolidated agency process for GR Reconciliation.

Each university system will receive a summary workbook (Excel file) that includes each of its components, as well as the working paper adjustments (similar to the existing template in the reporting requirements), as a downloadable Excel file. University systems may request their workbook from their financial reporting analyst beginning Sept 1.

Agencies may insert any manual amounts (such as TRS and UCI) that do not flow through USAS in their own copy of the GR Reconciliation worksheet, for internal accounting/reconciliation purposes. The financial reporting analysist will not insert these items in the source file because the amounts do not impact USAS balances.

All specific adjustments that are necessary are communicated from the agency’s assigned financial reporting analyst. The new GR Reconciliation automation process takes into consideration the previously required Other Line Adjustments (FRS entry only) items.

The initial analysis/review of GR Reconciliation begins in August and concludes in September. This review identifies any budgetary issues that the agency must resolve with its appropriation control officer. Reports of the analysis are available to agencies/universities upon request.

Note: Completion of the GR Reconciliation process relies upon the timely coordination of benefit account draws/returns.

GR Reconciliation is completed in September for GCAs and in October for FRAs. However, the FRAs can email requests to complete the GR Reconciliation early (in September) to frs@cpa.texas.gov  (please include your agency’s assigned appropriation control officer in the email request). The financial reporting analysts work with the appropriation control officers to complete the review early.

Payroll benefit appropriations are not automatically zeroed out. An analysis is performed to determine if the balance needs to be returned –OR– if a draw for additional funding is necessary. The analysis and journal entry are included in the agency’s GR Reconciliation workbook for review. The upload to USAS should be coordinated with the agency’s assigned appropriation control officer.

The financial reporting analysts make entries that record the net change in cash and elimination of legislative transfers for the GR Reconciliation.

Effective for fiscal 2024 reporting, agencies are now able to record their own shared cash entries. Coordination between agencies should conclude no later than mid-September to ensure USAS journal entries may be processed for the correct amount with the appropriate AGL reference.

Agencies should reclassify general ledger (GL) account funds held for others (GL 1149) in governmental fund types at year-end to an applicable GL account.

No. Once bonds are paid off, refunded, defeased or early extinguished, they are no longer reported as a liability of the agency. The only remaining requirement for any of the refunded/defeased bonds is to report the outstanding principal balance that is paid by your escrow agent subsequent to year-end. The purpose of the Principal and Interest screen in the BRS web application is to provide the information for all remaining principal (the agency’s liability) and associated interest by future fiscal year.

The amount reported is the amount of par value that is yet to be paid to the bondholders as of the reporting date.

When some or all of a bond issue is refunded, it is possible that the first call date of the bonds has not been reached. Payment of principal and interest continues to be made on these refunded bonds until the bonds can be called or maturity of the bond occurs. At the time of refunding, sufficient money was placed with an escrow agent to make all required interest payments until maturity (or call) of each bond not yet paid. When that event occurs, principal on the bond is made by the escrow agent.

Your bond financial advisor can assist you in confirming the amount (par value) that was still outstanding each Aug. 31 for each refunded issue not yet repaid to the bond holders. The amount is less from year-to-year if maturity was reached on some of the bonds being held by the escrow agent. This disclosure is required because your agency is still secondarily responsible for the payments to the bond holders in the event the escrow agent does not pay. This event is highly unlikely, but could happen.

• Leases are no longer classified as operating or capital leases.
• Lessees record a right to use lease liability and a right to use asset, see Leases — Recognitions and Measurements for Lessees.
• Lessors record a lease receivable and a deferred inflow of resources, see Recognitions and Measurements for Lessors.
• Recording a lease as a liability (instead of an obligation) may impact:
  • Laws, regulations and ordinances relating to debt limits.
  • Bond covenants.
  • Bond continuing disclosure.
  • Federal Grants:
    • Uniform Guidance (2 CFR 200) requires lease vs. purchase analysis.
    • Most awards only reimburse the lower of lease expense vs. depreciation.
• Clauses of subject to appropriation or funding apply to budgeting, not lease accounting (GAAP). Unless it is reasonably probable that the clause will be enforced, it can be ignored.

Leases must be recognized and measured using the facts and circumstances that exist at the beginning of the period of implementation. If applied to earlier periods, leases must be recognized and measured using the facts and circumstances that existed at the beginning of the earliest period restated. However, lessors must not restate the assets underlying their existing sales-type or direct-financing leases. Any residual assets for those leases must become the carrying values of the underlying assets.

• Review the contracts as of that date.
• Contracts in progress are measured from that date, even if the actual contract started years before.
• If contracts do not have options to extend and end within 12 months of implementation date, they are considered short-term.

No. Since the new lease does not begin until the next reporting fiscal year, include the future lease payments for the next five years in Note 8. Do not record an amount due on the financial statements for this new lease in the current reporting fiscal year in the LNSS web application.

• Lease Note Submission System (LNSS)
• Long-Term Liability Note (LTLN) web application
• Capital Asset Note Submission System (CANSS)

GASB 96:

• Applies to temporarily leased software.
• Does not apply to internally created software.
• Excludes contracts that solely provide maintenance, support or training for information technology (IT) services.
• Is very specific and focused on contracts that provide the right to determine the nature and manner of use of the IT software. For example:
  • An agency leasing a backhoe and putting an employee in the backhoe to tear up the parking lot for the three years — yes, this is a SBITA.
  • An agency hires a contractor who uses their own backhoe to tear up the parking lot for three years — no, this is not a SBITA.

GASB 96 specifically covers intent to extend outside of the contract period. This should not be included in the life of the asset. Only the legally covered, contractually bound lease period is considered the life of the asset, regardless of whether the agency pursues renewing the lease at the end of the contract. See Subscription-based IT Arrangements (SBITA) for more information.

The agency only needs to re-measure the subscription liability if there is a change to the:

• Subscription term
• Estimated amounts of payments
• Interest rate the SBITA charges to the agency
  –OR–
• Contingencies related to variable payments

A change in the discount or the index rate alone would not require a re-measurement. For further information, see SBITA Modifications and Terminations.

All SCAs are PPPs, but not all PPPs are SCAs. SCAs are a subset of PPPs that meet the following special criteria:

• An operator collects and is compensated from third party fees.
• The agency (transferor):
  • Determines or can modify or approve services provided.
  • Decides to whom the services are provided.
  • Has a significant residual interest in the underlying PPP asset at the end of the arrangement.

GASB 94 applies if the agency (transferor) executes a PPP arrangement that:

• Is on an existing asset.
• Results in either a new or improved asset. This PPP meets the definition of an SCA that is purchased or constructed by the operator.
• Results in either a new or improved asset. However, this PPP does not meet the definition of an SCA that is purchased or constructed by the operator.

Arrangements in which the agency compensates an operator for services (including designing, constructing, financing, maintaining or operating a non-financial asset) for a period of time in an exchange or exchange-like transaction.

• The corporation collects all fares for the period and remits to the agency.
• The agency pays fixed payments based on certain milestones.

T-code 632 does not allow petty cash GL accounts. To process the warrant cancellation entry using T-code 632, contact your financial reporting analyst to temporarily allow the original petty cash GL account on the Trans Code Options Profile (28B) screen for T-code 632. For more information, see Petty Cash.

There are no restatements for federal revenue or SEFA.

• For direct federal revenue — Reduce the current amount of revenue received and return that amount to the federal government. Record the offset to federal payable.
• For pass-throughs — Reduce the pass-through amount for the current reporting fiscal year. If there is no activity for either agency for the current reporting fiscal year:
  • The receiving agency must return the revenue to the original sending agency.
  • The sending agency must return the excess to the federal agency or adjust its current reporting fiscal year draws against that Assistance Listing Number (ALN). If the prior reporting fiscal year was understated, include the amount understated in the current reporting fiscal year activity.

Only report federal funds related to the loan program. Do not report the portion of loans that are distributed using institutional contributions. For more information, see Federally Funded Loan Programs.

For student loans, does an agency stop reporting new loans once federal funds have been disbursed?

For example: $200K federal funds are received and the entire amount was disbursed in Year 1; therefore, $200K was reported for new loans. In year 2, interest and payments were made; therefore, another $10K of those funds was loaned.

Earned federal funds not received from the federal government are included as interest income or another appropriate category. Differentiating the amounts loaned with federal repayments from that loaned with interest is something agencies determine and document internally. For more information, see Earned Federal Funds vs. Federal Funds.

Yes. Universities are exempt from SEFA Note 7. For more information, see Note 7: Federal Deferred Revenue.

Generic ALNs are only allowed as a last measure. The agency must exhaust every avenue of communication with the federal agency in an effort to identify the correct ALN. For more information, see SEFA Required Data.

On the Notes to SEFA menu, enter nonmonetary donations in Note 1: Non-Monetary Assistance and include a description of the donation as well as the ALN and amount.