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 as a liability.
To facilitate the agencies’ AFRs and the ACFR, use the specific RTI T-codes that post to revenue and expenditure GLs for pass-through money. The comptroller objects noted below should only be used for recording pass-through activity.
Federal Pass-Through
- Agency A receives federal money.
Agency A uses comptroller object 3XXX to record the revenue. - 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. - 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
- Agency A receives appropriated money for grants.
Agency A uses comptroller object 3XXX to record a revenue. - 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. - 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, agencies A and B report transaction 2 as expenditures and revenue on their AFRs. The Comptroller’s office eliminates 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 ACFR.
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 |