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Committee approves AG work program after questions about using salary‑adjustment funds to cover federal grant hold
Summary
The Interim Finance Committee approved a $1,112,734 work program to align funds used during FY25 closing, amid questioning about whether using salary‑adjustment funds to backfill grant shortfalls had statutory authority after the Department of Justice held federal grants. The committee directed the AG to seek contingency funding/loans if federal funds remain withheld.
The Interim Finance Committee approved a $1,112,734 work program for the Office of the Attorney General to align salary‑adjustment funds used to close FY25 budgets into FY26 and revert them to the general fund, after extended questioning about the circumstances that prompted the transfer.
Jessica Hoban, chief financial officer for the Attorney General’s Office, said federal grant disbursements were held by the U.S. Department of Justice pending single‑audit submissions, creating a temporary negative position in the AG’s grants unit. Tiffany Greenmeier of the Governor’s Finance Office explained the decision to transfer unused salary‑adjustment funds into the grants unit during the fiscal close was intended to protect the state’s comprehensive annual financial reporting and avoid an unfavorable mark while the federal releases were pending.
Committee members pressed for the legal basis of the action. Senator Neal questioned whether the GFO had statutory authority to use salary‑adjustment funds as a loan to backfill shortfalls; AG Chief of Staff Teresa Benitez Thompson and Hoban described the timing constraints and said the steps were taken because federal funds were unexpectedly withheld and to protect critical services supported by those grants (including STOP and SASP grants to victim services, law enforcement, prosecutors, and judicial funding).
The committee considered three options. Chair Dondero Loop recommended approving the work program and directing the AG to seek an allocation or loan from the IFC contingency account later if federal grants do not arrive. Senator Winn moved to approve; the committee approved the motion. Members asked the AG and GFO to return with additional details and to work with the IFC contingency process if necessary.
Hoban said the AG currently estimates a FY26 potential shortfall of about $1,278,249 (roughly $100,000 more than this work program) for STOP and SASP‑related grants and recommended contingency planning while awaiting the federal audit’s release, anticipated in mid‑2026.
