SEFA Tutorial
Lesson 3: Overview of Classifying Federal Funds
This lesson provides a conceptual understanding of the various classifications of federal funds that are applicable to the SEFA web application and USAS. Additional information is available on the AFR website’s Federal Pass-Throughs page.
Federal Revenue and Federal Expenditures: Direct vs. Pass-through
Federal funds are classified as either a:
- Federal revenue or federal expenditure
–AND– - Direct or pass-through transaction
Additionally, a pass-through transaction is further classified as either an:
- Interagency pass-through
–OR– - NSE pass-through
These classifications are important to understand for properly entering federal revenue and expenditure data in the SEFA web application and in USAS.
Federal revenue may be received:
- Directly from a federal awarding agency
–OR– - Indirectly from another non-federal entity
Federal expenditures may be:
- Spent by the receiving agency
–OR– - Passed-through to another non-federal entity
For both federal revenue and federal expenditures, the non-federal entity may be an NSE or another agency.
Each federal revenue transaction entered into the SEFA web application must disclose whether the revenue transaction is either a:
- Direct transaction
- NSE pass-through transaction
- Interagency pass-through transaction
While SEFA identifies federal NSE pass-through revenue, USAS classifies this as direct federal revenue. This means that in USAS, entries made for both direct and NSE pass-through federal revenue MUST be made using a direct federal revenue COBJ. Interagency pass-through federal revenue entries must use either COBJ 3971 for non-operating revenue or COBJ 3978 for operating revenue. For a list of revenue COBJs (including federal revenue COBJs), see the Comptroller Manual of Accounts: Comptroller Object Codes.