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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

SEFA Timeline

Interagency federal pass-through balances in USAS are posted to the SEFA web application in the first week of August.

The following timeline lists the deadlines for agency SEFA submissions. Submit each of the following certifications using the SEFA web application.

Note: A list of agencies that do not certify by the assigned deadlines is provided to the State Auditor’s office.

July 1 – Initial Certification

The SEFA web application is available to begin the interagency reconciliation process on July 1 and the acknowledgment by your agency through the initial certification request will provide the agency the earliest opportunity to enter its interagency federal pass-through activity (including accruals) in the SEFA web application. If full detail on accrual amounts is not available, records are still entered based on the agency’s documented revenues or expenditures. Disbursing and receiving agencies are strongly encouraged to communicate with each other prior to the pass-through certification deadline to confirm the federal pass-through amounts and avoid discrepancies between the reported interagency balances.

The initial certification confirms the SEFA web application can accept the agency’s interagency federal pass-through records for the current fiscal year. It is very important to meet this submission deadline in order to populate the SEFA Agency Pass-through Reconciliation and USAS Agency Pass-through Reconciliation reports.

Sept. 19 – Sept. 27 – SEFA Interagency Federal Pass-Through Reconciliation Period

All balances not confirmed by the initial certification deadline must be reconciled during the reconciliation period. The reconciliation period provides time for agencies to communicate and resolve any discrepancies between federal pass-through balances reported by the disbursing and receiving agencies. All balances must be reconciled prior to the final interagency federal pass-through certification deadline of Sept. 28. The Financial Reporting section can assist agencies unable to reach an agreement. Contact your financial reporting analyst for assistance or email sefa.texas@cpa.texas.gov.

Note: Enter USAS interagency/interfund transactions by Sept. 26.

Sept. 28 – Pass-Through Certification

This certifies that the agency fully reconciled all interagency pass-throughs. To successfully certify, the SEFA Agency Pass-through Reconciliation and USAS Agency Pass-through Reconciliation reports must display zero differences. After the Pass-through Certification, all interagency federal pass-through records in the SEFA web application are locked down and closed to modifications.

The SEFA analyst reviews the SEFA web application data and certifications following the interagency federal pass-through certification deadline. For uncertified agencies, the SEFA analyst adjusts unbalanced interagency federal pass-throughs and then certifies the agency using the following general rules:

  • The disbursing agency is responsible for determining the classification of funds:
    • Pass-through vs. vendor
    • Federal vs. state
    • The portions of federal and state
  • The receiving agency determines the amount of accruals.

The Financial Reporting section then advises each impacted agency that its AFR must change to balance with SEFA.

Nov. 1 – Final Certification

This certifies that all remaining SEFA data (such as direct transactions, non-state entity pass-throughs to or from, SEFA notes, EINs, UEIs, etc.) were entered into the SEFA web application and that SEFA reconciles to USAS annual financial report balances. This certification completes the agency SEFA submission process.

Year-Round Requests

The following requests can be made year-round:

  • Assistance Listing Number (ALN) additions to USAS and the SEFA web application. Documentation of the grant award is required before the ALN can be added to the USAS Grant Category (D40) Profile screen and the SEFA web application.
  • Non-State Entity (NSE) name additions to the SEFA web application. Agencies can download an Excel catalogue of current NSEs in the SEFA web application. Documentation of the grant award that shows the ALN is required before the NSE name can be added to the SEFA web application.

Send documentation to sefa.texas@cpa.texas.gov.

SEFA Reminders

Please be aware of the following SEFA reminders:

  • Universities are exempt from Note 7 – Federal Deferred Revenue (as of fiscal 2014)

    Note: Per GASB 65, the term “deferred” is only used when referring to “deferred inflows of resources” or “deferred outflows of resources.” As a result, “deferred revenue” is now “unearned revenue” and “deferred costs” is now “prepaid costs.” The term “deferred” was not changed in SEFA in order to be in compliance with Uniform Guidance (2 CFR Part 200).

  • Include details of insurance purchased with federal funds in Note 1 – Nonmonetary Assistance
  • Ending balances for federal direct student loans must equal zero
  • SEFA does not contain restatements
    • Prior fiscal year errors are not corrected in the current fiscal year SEFA
    • Corrections must be made in USAS

      Note: If expenditures were overstated in the prior fiscal year, return the excess revenue to the original sending agency. The original sending agency must either return the excess to the federal agency or adjust the current year draws. Do not understate the current fiscal year expenditures.

  • For SEFA to balance — accrual of revenue must occur in the year of the expenditure
  • SEFA is the “Schedule of Expenditures of Federal Awards” — agencies must be able to provide confirmation/documentation (upon request) if reconciling to revenues
  • Verify end of year payables using the RTI process are not double counted in the confirmation process

    Note: When the RTI process is used and the liquidation date is in the next fiscal year, do not record a due from/due to for that transaction. The USAS T-code used for the RTI already records a due from/due to with an effective date in the current fiscal year.

  • ALNs are not interchangeable — agencies cannot borrow from another grant if a grant runs out of funding