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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

Universities

Additional Requirements for GASB 24/35

Reporting Federal and State Revenues Received from Agencies

Federal and state grants received from other agencies are recognized as either federal or state interagency pass-through revenue. Funds passed through to other agencies are recognized as either federal or state interagency pass-through expenditures.

GASB 35 amended GASB 24, paragraph 4, and requires pass-through grants to be recognized as revenue and expenditures or expenses in a governmental, proprietary or fiduciary fund.

If the grant originated from federal dollars, use the federal pass-through revenue COBJs:

  • 3971 – Federal Pass-Through Revenue, Non-operating
  • 3978 – Federal Pass-Through Revenue, Operating

These codes are used because the revenue originates from federal dollars and normally remains federal dollars.

If the grant revenue originated from state appropriations, use the state grant pass-through COBJs:

  • 3725 – State Grant Pass-Through Revenue, Non-operating
  • 3842 – State Grant Pass-Through Revenue, Operating

It is important to use the correct COBJs to reflect pass-through revenues because these revenues are matched statewide to the pass-through expenditures.

If a university grants money from federal or state sources, it must record line items on its financial statements for federal and state pass-through expenditures. These must be entered using the appropriate COBJs:

  • 7971 – Federal Pass-Through Expenditure, Non-operating
  • 7978 – Federal Pass-Through Expenditure, Operating
  • 7614 – State Grant Pass-Through Expenditure, Non-operating
  • 7615 – State Grant Pass-Through Expenditure, Operating

Pass-through transactions must balance. However, an operating pass-through expenditure reported by the disbursing agency can balance with the recognition of non-operating pass-through revenue by the recipient agency and vice versa.