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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

The American Recovery and Reinvestment Act (ARRA)

General Information

The American Recovery and Reinvestment Act of 2009 (ARRA) was enacted by the 111th United States Congress and signed into law by President Obama on Feb. 17, 2009. The Comptroller’s office established appropriated fund 0369, the Federal American Recovery and Reinvestment Fund, to track the federal stimulus. The fund profile may be viewed in USAS on the Appropriated Fund Profile (D22) screen. Agencies that anticipate receiving ARRA funds in the state treasury must create a profile in the Fund Profile (D23) screen for appropriated fund 0369 according to established guidelines found in the USAS Coding Instructions.

ARRA Funds in SEFA

Identify ARRA 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 ALNs associated with ARRA funding. Agencies are required to designate funds received and expended for ARRA programs via the checkbox available in the SEFA web application.

Federal agencies identified over 200 new and existing programs funded by ARRA. The most current Compliance Supplement –2 CFR Part 200 Appendix XI, available from the White House’s Office of Federal Financial Management webpage, provides additional guidance on programs (including clusters of programs) related to ARRA funding.

ARRA Exceptions

Certain ARRA programs are not subject to Uniform Guidance compliance requirements and, as such, result in the reporting of federal revenue for financial statement purposes. However, the expenditures related to these programs are not included in SEFA and therefore result in the reporting of a reconciling item in SEFA Note 2. The programs that currently fall under this exception are:

  • ESBA COBRA Premium Assistance (ALN 17.151) – no longer an active program: Provided for premium reductions for health benefits. Eligible individuals paid only 35 percent of their COBRA premiums and the remaining 65 percent was reimbursed to the coverage provider through a tax credit. To be eligible, individuals must have experienced the involuntary termination of a covered employee’s employment, which was the only COBRA-qualifying event for COBRA Premium Assistance. This program expired in 2012.
  • Build America Bonds – no longer an active program: The Build America Bonds were taxable municipal bonds that carried special tax credits and federal subsidies for either the bond issuer or the bond holder. The purpose of the program was to reduce the cost of borrowing for state and local government issuers and governmental agencies. This program expired on Dec. 31, 2010.
  • ARRA Section 1602: Grants to States for Low-Income Housing Projects in Lieu of Low-Income Housing Tax Credit (no ALN).
  • ARRA Section 1603 – no longer an active program: Payments for Specified Energy Property in Lieu of Tax Credits at business locations (no ALN). This program expired on Dec. 31, 2011.
  • Qualified Therapeutic Discovery Project – ALN 21.103 and R&D cluster.
  • Qualified School Construction Bonds (no ALN).

If your agency is aware of any further programs that may be accounted for as an ARRA exception, email SEFA.Texas@cpa.texas.gov.

Reporting ARRA in the AFR

For financial reporting purposes, each agency that receives funding under ARRA must set up its D23 fund 0369 profile as follows:

  • D23 Fund Number: 0369
  • Appropriated Fund Number: 0369
  • GAAP Fund Number/GAAP Fund Type:
    • Enhancement of Existing Federal Program: reference the GAAP fund/GAAP fund type of the existing federal program receiving enhanced funding under the ARRA
    • New Federal Funding: set equal to GAAP fund 0001 and FT01

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

ARRA funds held outside the state treasury (in Treasury Safekeeping Trust or in external federal trust accounts) are not required to be reported using appropriated fund 0369. In these cases, ARRA 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 fund 0369 in the AFR. This is an exception to the traditional reporting of CIST balances by the controlling agency.

ARRA Section 1512 and SEFA Reconciliation No Longer Required

As per section 627 of the federal Fiscal Year 2014 Omnibus Spending Bill, Section 1512 reporting was repealed effective Feb. 1, 2014. Therefore, the web-based reconciliation is no longer required between ARRA Section 1512 reporting and the SEFA for state agencies and institutions of higher education. The last required web-based reporting period for ARRA/SEFA reconciliation was fiscal 2013. Agencies and institutions of higher education must maintain sufficient documentation to perform this reconciliation if requested.

For more information, email SEFA.Texas@cpa.texas.gov.