Lesson 2: Agency Responsibilities for Federal Awards

ITVs through Reoccurring Transaction Indices (RTIs)

The disbursing and receiving agencies must use the RTI process to record ITV transactions. The AFR Reporting Requirements’ RTI Tables provides specific USAS coding and other requirements for various revenue and expenditure transactions. Agencies must use a federal Comptroller Object (COBJ) for recording federal interagency pass-through revenue and expenditures.

The following table provides links to the RTI Tables most frequently used for federal interagency pass-through transactions.

Most Frequently Used RTI Tables for Federal Activity

The AFR Reporting Requirements’ Federal Pass-Throughs page provides an overview of recording federal interagency pass-through (where pass-through refers specifically to interagency pass-through and not to NSE pass-through). Also included on AFR Reporting Requirements’ website are:

• Decision Chart A is for the disbursing agency to record pass-through expenditures
• Decision Chart B is for the receiving agency to record pass-through revenues

These decision charts help agencies determine the appropriate COBJ and other USAS coding required to record an interagency pass-through transaction. Also included is guidance for USAS accounting treatments for various types of pass-through activities based on the nature and timing of the transaction.

Example:
Sample Agency XXX receives the following federal award directly from Sample Federal Agency ZZZ:

• Award amount: $1,000,000
• Program title: ZZZ Federal Program
• ALN: 12.345
• State funding match requirement: none

During the fiscal year, Sample Agency XXX distributes $200,000 of this federal award to Sample Agency YYY.

As the disbursing agency, Sample Agency XXX follows Decision Chart A by:

1. Recording direct federal revenue of $1,000,000.
2. Determining that it will disburse $200,000 to Sample Agency YYY.
3. Determining that Sample Agency YYY is a pass-through recipient (subrecipient), so Sample Agency XXX proceeds to Option A.
   Option A:
   1. Sample Agency XXX determines the pass-through expenditures to Sample Agency YYY are non-operating, so Sample Agency XXX records $200,000 using COBJ 7971.
   2. Sample Agency XXX uses the preferred Method 1 of sending a contract in the form of a written grant agreement to Sample Agency YYY that includes the following details:
      • Sample Agency XXX is transferring $200,000 to Agency YYY.
      • 100% of the $200,000 is federal pass-through funds and must be recognized as such in USAS
      • Agency YYY is Sample Agency XXX’s subrecipient for the federal program
      • The federal program title is ZZZ Federal Program
      • The federal program ALN is 12.345
   3. At fiscal year-end, Sample Agency XXX:
      • Contacts Agency YYY for written confirmation of the COBJs, Agency General Ledger (AGL), and ALN used by Sample Agency YYY for the transaction.
      • Use Sample Agency YYY’s written confirmation to verify that the federal pass-through expenditures Sample Agency XXX reported as COBJ 7971 equal the sum of Sample Agency YYY’s federal pass-through revenue reported in COBJ 3978.
      • Record the pass-through to Sample Agency YYY in the SEFA web application:
        • ALN: 12.345
        • Program title: ZZZ Federal Program
        • Direct revenue: $200,000
        • Pass-through Expenditures: $200,000
        • Pass-through To Sample Agency: YYY
      • Confirm the $200,000 pass-through expenditures to Sample Agency YYY are reported in USAS, the AFR operating statement and the SEFA web application.

As the receiving agency, Sample Agency YYY, follows Decision Chart B by:

1. Determining that it will use the federal revenue for operating activity.
2. Recording $200,000 federal pass-through revenue using COBJ 3978.
3. Before receiving payment, Sample Agency YYY reviews the written grant agreement from Sample Agency XXX.
4. Confirming the written grant agreement states Sample Agency XXX’s transactions are federal pass-through funds and must be treated as such in USAS.
5. At fiscal year-end, Sample Agency YYY:
   • Provides written confirmation to Sample Agency XXX of the COBJs, Agency General Ledger (AGL), and ALN used by Sample Agency YYY for the transaction and request corresponding confirmation from Sample Agency XXX.
   • Uses Sample Agency XXX’s confirmation to verify that the federal pass-through expenditures Sample Agency XXX reported as COBJ 7971 equal the sum of Sample Agency YYY’s federal pass-through revenue reported in COBJ 3978.
   • Records the following pass-through from Sample Agency XXX in the SEFA web application:
     • ALN: 12.345
     • Program title: ZZZ Federal Program
     • Pass-through revenue: $200,000
     • Pass-through From Agency: XXX
     • Direct Expenditures: $200,000
   • Confirms the $200,000 pass-through revenue from Sample Agency XXX is reported in USAS, the AFR operating statement and the SEFA web application.

Next: Contractor (Vendor) vs. Subrecipient Determination Responsibilities