***REVIEW DRAFT INTERNAL APHIS USE ONLY***

Page 44 PAA-12-01 WS Resource Management Review

SUMMARY OF ISSUES

1. The allocation and expenditure of appropriated dollars within the state offices is transparent and adequately
recorded. The primary allocation rationale is based upon historic precedence with internal and external resistance
to deviate from these existing patterns. The current allocation of appropriated funds represents a vulnerability for
the program since it is difficult, if not impossible, to link together performance, budget, strategy and outcomes.
2. Beyond the state level, WS has difficulties monitoring and reporting its fiscal condition in real-time. This appears
to be the result of multiple factors including cash flow structures and local cost assignment practices. State offices
generally have the ability to review their finances in a timely and accurate fashion using informal ledgers.
Practices used to monitor and report on organizational finances vary by state, but most appear to be reasonable.
3. Within a strict accounting definition, WS cost shares all, or nearly all, of its agreements, with only a small
percentage of WS agreements as full cost recovery. Cost share varies by state, and within states, it also varies by
cooperator and project. Significant federal and Agency guidance exists addressing user charges, however, since
WS has not established specific implementing instructions on cost sharing, practices vary significantly across the
program. As a result, overall WS resource management is complicated as each state approaches this issue
differently.
4. WS generally recoups its portion of direct costs associated with operations; however, there is little consistency in
how states calculate and recoup indirect costs. The program uses several methods to calculate indirect costs, many
of which fail to conform to federal accounting standards governing overhead. Current practices, such as cost
sharing, create significant challenges in determining if they are under charging, recouping their costs, or over
charging for the services they provide. These practices place WS at significant risk of negative findings under
financial control audits.
5. At the State level WS tends to adequately align its staffing mix (Permanent, Temporary, and Term appointments)
with the perceived risk or variability of funding. State directors were highly cognizant of the need to mitigate
operational and financial risk by consciously shaping their workforce through appointment types.
6. As a whole, WS has not well defined or communicated its business expectations throughout the organization.
From a strategic perspective, it is not clear if state offices should seek to expand their operations to accommodate
more cooperators and protect more resources, maintain the status quo or potentially contract to more sustainable
positions. Likewise, from a tactical standpoint, state offices are unsure of what specific long-term costs they need
to account for and what if any level of reserves they need to sustain. Since WS national intent on cooperator
billing is interpreted differently, widely divergent practices exist complicating overall resource management.

7. Disagreement exists over WS obligation to collect and distribute the agency portion of the APHIS overhead rate.
This widely misunderstood topic is a point of contention between the program and the Agency, provoking
disunity.

8. Program support accounts lack guidance on purpose and intent. Program wide monitoring of funds in these
accounts does not occur and states lack formal guidance on what costs these accounts need to support. In addition,
the extent to which state offices can accumulate balances in these accounts is not defined. This places WS at
significant risk of negative findings under financial control audits.