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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

Miscellaneous Topics
Rebates

According to the Code of Federal Regulations (CFR), rebates are an applicable credit. Applicable credits reduce or offset expenditures and expenses allocable to a federal program (2 CFR 200.406 [a]). Agencies must disclose material rebates as a significant accounting policy in the notes to the Schedule of Expenditures of Federal Awards (SEFA) (2 CFR 200.510 [b][6]).

Agencies must disclose the annual rebates received from the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), ALN 10.557 in SEFA Note 6. The WIC rebates are only disclosed in SEFA Note 6 and are not reported in the SEFA Record List or the SEFA Schedule 1A with other ALN 10.557 revenues and expenditures.

WIC rebates from manufacturers must be reported to the federal cognizant agency in the month the payment is received (7 CFR 246.14 [f]). The Office of Federal Financial Management’s provides the following requirements:

(Part 4 — Agency Program Requirements; Part 4 — Department of Agriculture [USDA] section)
Assistance Listing 10.557 Special Supplemental Nutrition Program For Women, Infants, And Children (WIC)

II. Program Procedures; B. Program Funding

4. Rebates:

A State agency may contract with a food manufacturer to receive a rebate on each unit of the manufacturer’s product purchased with Food Instruments (FIs) redeemed by program participants. Such rebates are credits for food costs that are reported in the month in which the rebate was received.

III. Compliance Requirements; B. Allowable Costs/Cost Principles

1. Applicable Credits:

The following items are credits against current vendor billings or prior expenditures:

a. Rebates — Rebates are credits for food costs that are reported in the month in which the rebate was received (7 CFR section 246.14[f]).

Monthly rebates for ALN 10.557 are reported to the federal cognizant agency. Annual rebates for the fiscal year must be disclosed in SEFA Note 6.

See the WhiteHouse.gov’s Office of Federal Financial Management page (in the most recent Compliance Supplement — 2 CFR Part 200 Appendix XI) for more guidance related to reporting ALN 10.557 rebates.