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Committee tightens allowable and prohibited spending rules for family practice residency funds
Summary
The committee approved revised guidance tightening allowable uses of family-practice residency funds, prioritizing direct resident compensation and requiring board approval for many other direct costs; the panel asked staff to finalize language and provide program outreach.
The Family Practice Advisory Committee approved updated guidance June 10 to clarify allowable and prohibited uses of Family Practice Residency Program funds and to align the guidance more closely with the Graduate Medical Education expansion program.
Ernest Hacchas told the committee the proposed changes would "prioritize direct resident costs" and align reporting and allowable categories with the GME expansion program to reduce confusion and improve compliance.
Committee members pressed for clarity about how host institutions should account for funds that are commingled with hospital or university accounts. Several members, including Eric Warwick (Baylor College of Medicine) and representatives of UT Southwestern, explained some institutions pay resident stipends through affiliated hospitals; those members said the guidance should allow programs to report how state funds are used even when the payroll pass-through occurs at a hospital. Warwick said family-practice grant dollars often support administrative and faculty costs "that are not supported under the GME dollars," and urged practical flexibility.
THECB staff described the operational approach: award agreements will include an approved budget; programs must attach the initial budget at signing, and any pivot from that budget will require THECB approval. Staff said they will consult the agencyOffice of General Counsel before finalizing language and will present a reworked document by administrative action if necessary to meet the upcoming application timeline.
Committee members also agreed to a change discussed during the meeting: increasing the per-unit threshold for equipment purchases that require prior approval. After discussion of point-of-care ultrasound and other devices, the committee agreed to raise the per-unit threshold to $7,500 for equipment purchases that remain eligible for program support; equipment purchases above that amount will require THECB approval as "other direct costs." The committee asked staff to deliver the revised guidance to program directors via the faculty development center and to include the change in application materials.
Zubair Saeed moved to approve the updated "current use of funds" guidance as discussed; the motion passed. THECB staff will finalize the text, confirm legal review, and distribute the guidance with the FY2026 Request for Applications and at upcoming gatherings of program directors.
