letter explains how to account for an overpayment of Foundation School Program
(FSP) funding, also called state funding, in accordance with Statement 65 of the Governmental
Accounting Standards Board (GASB).
Does the TEA Determine That a District Was Overpaid?
each fiscal year, when final financial and attendance data are available, the
Texas Education Agency (TEA) goes through a process called settle-up to
reconcile the difference between the FSP payments made to districts and the actual
earnings of districts. If a district was overpaid for the year, the TEA recovers
the overpaid state funding, usually by reducing the district’s scheduled FSP payments over the remainder of the current state
How Should My District Account for FSP
Overpayments in Light of GASB Statement 65?
Historically, districts have recorded overpayments
of FSP funding as deferred revenue. However, under GASB Statement 65, overpayments
to districts do not meet the requirements of deferred inflow or deferred
outflow. Instead, an overpayment is considered an amount owed to the state that
was not earned by the district. Since the revenue from the overpayment was not
earned, the district should account for it as a liability.
Should I Contact If I Have Questions?
Please contact Yolanda Walker in the Financial
Accountability Division by phone at
(512) 463-0947 or by email at firstname.lastname@example.org if you have questions.