The Governmental Accounting Standards Board (GASB) Statement 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance, was issued June 1994 and effective for periods beginning after June 15, 1995. This statement establishes accounting and financial reporting standards for pass-through grants, food stamps, and on-behalf payments for fringe benefits and salaries.
ATTENTION: TRS Reporting Officials
The Teacher Retirement System of Texas is furnishing this information to assist reporting employers in complying with the GASB requirements. Certain information required by GASB 24 will have to be derived from the reporting employer's payroll records. Please forward this document to your reporting employer's financial/accounting manager and your auditor.
Annual Financial Report of Reporting Employer Financial Statements
GASB 24 requires reporting employers to recognize revenue and expenditures/expenses for on-behalf payments in their financial statements. On-behalf payments for fringe benefits and salaries are direct payments made by a paying entity to a third-party recipient for the employees of an employer entity.
Types of On-Behalf Payments
State Contributions – Contributions made by the State of Texas to the Teacher Retirement System (TRS) of Texas on behalf of a reporting employer's employees must be recognized as equal revenues and expenditures/expenses by each district. Section 1.3.3 of the Texas Education Agency's (TEA) Financial Accountability System Resource Guide provides a detailed explanation and example. Click on the link below to obtain the most recent version of the TEA Financial Accountability System Resource Guide.
TEA Financial Accountability System Resource Guide
Federal Government Retiree Drug Subsidy – The Medicare Modernization Act of 2003 (MMA) created an outpatient prescription drug benefit program (known as Medicare Part D) and a Retiree Drug Subsidy (RDS) program which were made available in 2006. The Texas Public School Retired Employee Group Insurance Program (TRS-Care) is offering a Medicare Part D Plan and is participating in the Retiree Drug Subsidy plan for eligible TRS-Care participants. Under Medicare Part D and the RDS program, TRS-Care receives payments from the federal government to offset certain prescription drug expenditures for eligible TRS-Care participants. On-behalf payments must be recognized as equal revenues and expenditures/expenses by each reporting employer.
The allocation of these on-behalf payments is based on the ratio of a reporting employer's covered payroll to the entire covered payroll reported by all participating reporting employers. TRS based this allocation percentage on the "completed" report submissions by reporting employers for the month of December 2024. Any questions about payroll amounts should be directed to a reporting employer's payroll contact.
Click on the link below to obtain a listing of each reporting employer's portion of retiree drug subsidy received by TRS for each fiscal year ending August 31.
Notes to the Financial Statements
Per GASB 24, paragraph 12, reporting employers should disclose in the notes to the financial statements the amounts recognized for on-behalf payments for fringe benefits and salaries. For on-behalf payments that are contributions to the pension plan, see GASB 68 instructions.