Finding #2026-002 – Allowable Costs – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Agriculture, Assistance Listing #10.932, Regional Conservation Partnership Program, Contract period: 06/12/24 – 12/31/26 Contract number: Supplemental-2983-A-1608, Co...
Finding #2026-002 – Allowable Costs – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Agriculture, Assistance Listing #10.932, Regional Conservation Partnership Program, Contract period: 06/12/24 – 12/31/26 Contract number: Supplemental-2983-A-1608, Contract period: 10/31/23 – 07/31/27 Contract number: Supplemental-2757-A-1212, Contract period: 08/29/23 – 03/31/26 Contract number: 917442230013, Passed through Sul Ross State University: Contract period: 04/01/25 – 03/31/26 Contract number: N/A. Condition and context: Of the $1,838,681 expended during the year ended March 31, 2026, approximately $1,729,640 related solely to the purchase of a conservation easement. The remaining expenditures of $109,041 consisted of payroll and related charges. In a sample of three payroll transactions tested, we noted in each case that reimbursement requests were based on hourly rates that exceeded the actual rates of pay of the employees performing the work, resulting in an overstatement of payroll charged to the grantors of $14,668. Recommendation: Develop policies and procedures to ensure that all costs charged to federal awards are based on actual costs incurred in accordance with federal award requirements. Planned corrective action: Management will establish procedures to ensure personnel costs charged to federal awards are based on actual allowable employee compensation and supported by appropriate time records. Federal reimbursement requests will be reviewed by the Director of Operations and the Director of Finance prior to submission to ensure that billed costs comply with federal award requirements. Management will also review the questioned costs identified in the audit and coordinate with the applicable grantor regarding any required repayment or adjustment. Responsible officer: Dina McIlhenny, Director of Finance and Brenna Gaik, Director of Operations. Estimated completion date: October 31, 2026.