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SEFA Tutorial

Lesson 1: Federal Reporting Requirements – Background

Direct Federal Funds vs. Federal Pass-through Funds

Each agency must record direct and pass-through federal activity in SEFA and in USAS. Agencies receive federal revenue both:

  • Directly from the federal government (direct federal revenue)
    –AND–
  • Passed-from other non-federal entities (federal pass-through revenue)

Note: Non-federal entities include both agencies and non-state entities (NSEs). Agencies also spend federal awards directly on federal program expenditures and expenses (direct federal expenditures) and pass-through awards to other agencies and NSEs (federal pass-through expenditures).

Pass-through activity occurs when the agency both:

  • Receives an appropriation with the authority to grant money to another agency
    –AND–
  • Retains administrative responsibilities for that money

Pass-through expenditures and expenses must use the same basis of accounting as the fund financial statements. Cash basis reporting is not permitted for pass-through activity.

Direct federal funds and pass-through activity are discussed in more detail in lessons 2 and 3.

Next: Learning Check