TRS has received questions related to the impact of Paycheck Protection Program (PPP) Loans on reporting Federal Funds/Private Grant contributions for Charter Schools. We have reviewed the statute and if you anticipate using PPP loan funds for payroll purposes, you will need to notify TRS of the intention in writing. Please send a letter on school letterhead, signed by the Head of Institution or an RE Portal contact with Signature or Administration authority to your coach.
Initially the loan funds will be considered local funds, however, if the loan is later forgiven, the funds will fall under
Texas Government Code section 825.406 Federal Funds/Private Grant. At that time, RP Adjustments will be required to report the PPP Loan funds used for payroll expenses as compensation paid from Federal Funds/Private Grants and the applicable contributions must be remitted.
An employer who fails to report the corrections after the loan has been forgiven may be subject to the consequences described in
section 825.406(g). The retirement system is obligated to report an employer's noncompliance with
section 825.406 to the attorney general, the Legislative Budget Board, the comptroller of public accounts, and the governor.
