Lesson 1: State Grant Pass-Through Funds

Accounting Literatures

The Governmental Accounting Standard Board (GASB) defines pass-through grant as a grant that is received by an agency to transfer to or spend on behalf of a secondary agency.

GASB 24, paragraph 5, states its position regarding pass-through grants as follows:

As a general rule, cash pass-through grants should be recognized as revenue and expenditures or expenses in a governmental, proprietary, or fiduciary fund. In those infrequent cases in which a recipient government serves only as a cash conduit, the grant should be reported in a custodial fund. See GASB 24 for more details.

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