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Glenn Hegar  ·  Texas Comptroller of Public Accounts

USAS Profile Review and Cleanup Procedures

USAS Profile Review and Cleanup Procedures – Pass-Through Funds

Background

Pass-through grants as defined under GASB Statement No. 24, Accounting and Financial Reporting of Certain Grants and Other Financial Assistance, are grants received by a recipient government to transfer to or spend on behalf of a secondary recipient and should be recognized as revenues and expenditures/expenses in a governmental, proprietary or trust fund. The only exception to this is if the recipient government serves only as a cash conduit (i.e., has no administrative or direct financial involvement in the program), the grant should be reported in a GAAP agency fund.

To facilitate the agencies’ AFRs and the CAFR, RTI T-codes have been developed that post to revenue and expenditure GLs for pass-through money. These comptroller objects should only be used for pass-through money.

Federal Pass-Through

  1. Agency A receives federal money.
    Agency A uses comptroller object 3XXX to record the revenue.
  2. Agency A sends some of the federal money to agency B.
    Agency A uses comptroller object 7971 to record a federal pass-through expenditure, non-operating.
    Agency B uses comptroller object 3971 to record a federal pass-through revenue, non-operating.
  3. Agency B spends the money by providing services or giving it to the ultimate consumer.
    Agency B uses comptroller object 7XXX to record an expenditure.

State Grant Pass-Through

  1. Agency A receives appropriated money for grants.
    Agency A uses comptroller object 3XXX to record a revenue.
  2. Agency A sends some of the state grant money to agency B.
    Agency A uses comptroller object 7614 to record a state grant pass-through Expenditure, non-operating.
    Agency B uses comptroller object 3725 to record a state grant pass-through revenue, non-operating.
  3. Agency B spends the money by providing services or giving it to the ultimate consumer.
    Agency B uses comptroller object 7XXX to record an expenditure.

For both federal and state grant pass-through money, agency A and B records will record transaction 2 as expenditures and revenue on their AFRs. The Comptroller’s office will eliminate the revenue for comptroller objects 3725, 3842, 3971 and 3978 and the expenditure for comptroller objects 7614, 7615, 7971 and 7978 so that there will be no double counting on the CAFR.

The roll-up and the name for these comptroller objects are as follows:

Comptroller Object Name Roll-up
3725 State Grant Pass-Through Revenue, Non-operating Revenues
3842 State Grant Pass-Through Revenue, Operating Revenues
3971 Federal Pass-Through Revenue, Non-operating Revenues
3978 Federal Pass-Through Revenue, Operating Revenues
7614 State Grant Pass-Through Expenditure, Non-operating Expenditures
7615 State Grant Pass-Through Expenditure, Operating Expenditures
7971 Federal Pass-Through Expenditure, Non-operating Expenditures
7978 Federal Pass-Through Expenditure, Operating Expenditures

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Risk Areas

Using comptroller object 3725, 3842, 3971, 3978, 7614, 7615, 7971 or 7978 for non pass-through funds

Because the revenues and expenditures that post to the above comptroller objects will be eliminated for the CAFR, it is important to use these comptroller objects correctly so the CAFR will reflect federal and state revenue correctly.

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Reports and Procedures

Report PCU152 – Pass-through funds, CY, comptroller objects 3725, 3842, 3971, 3978, 7614, 7615, 7971 and 7978

Type Listing
Source GL table
Purpose The report is a summary sorted by appropriated fund, agency fund, comptroller object, AY, appropriation number. This report reflects the name and roll-up. The GL account and the T-code are given as information to assist in the identification of transactions.

Procedures

  1. Verify that the comptroller objects that were used are only for pass-through funds.

    The QMF will show total CY GL activity in the above named comptroller objects. A separate line is shown for each GL account inferred by the T-code. For example, for a T-code that infers four GL accounts, four separate lines are listed for one transaction. From the information given, determine if the comptroller object was used only for pass-through.

  2. Correct the comptroller object.

    If a wrong comptroller object was used, it must be corrected. It can be corrected at the summary object level by fund, appropriation number and AY.

Example:

This example illustrates the way to correct an incorrect entry using comptroller object 3725 – State Grant Pass-through Revenue when comptroller object 3980 – Operating Fund Transfers should have been used.

QMF Element Original Entry Reversal Entry Correcting Entry
Amount $1000 $1000 $1000
T-code 405/273 405/273 449
GL Account 5000/5001 5000/5001 6011
PCA 12345 12345 12345
Appropriation 12345 12345 12345
Agency fund 0001 0001 0001
Comptroller Object 3725 3725 3980
Object Group 38 38 32
Reverse Indicator   R  
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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