by Logan Finney, Idaho Reports

Legislative budget writers learned this week that the Division of Vocational Rehabilitation has overspent its budget for the current year by millions, revealing a lack of internal financial controls and possibly jeopardizing job training services for Idahoans with disabilities.

“They found that they are out of appropriations for the current fiscal year, and they are facing a budget short fall of $4.7 million,” legislative budget analyst Brooke Dupree told the Joint Finance-Appropriations Committee during a Wednesday morning hearing.

According to legislative staff, the agency was monitoring available cash rather than the appropriation they were actually allowed to spend.

Although the agency identified the $4.7 million shortfall, it requested only an additional $2.7 million this fiscal year to cover outstanding vendor payment obligations. An additional $550,000 from expected salary savings has also been earmarked to help cover the shortage, and some outstanding payments could be made in the upcoming fiscal year instead.

Division administrator Jane Donnellan said she suddenly became aware of the issue on Friday.

“The system blocked the payment,” said JFAC co-chair Sen. Scott Grow, R-Eagle. “It’s concerning to me that we have to rely upon software to block the payment and that we’re not ahead of the game ourselves.”

Donnellan noted in a letter to the co-chairs and in her answers to committee questions that the division has had three fiscal officers since 2022, with the latest starting on the job earlier this month.

“I was not provided the information, nor did I believe there was an issue based on what information was made available to me,” Donnellan said.

Despite many unanswered questions at this point, human error appears to have caused the issue.

“Based on our analysis, it would not appear that there was anything the new Luma system did that impacted this situation,” Donnellan said.

In addition to the emergency funds, the joint budget committee requested a management review of the agency through the Legislative Services Office.

“It is deeply troubling to me that the things outlined as a corrective action are not already happening,” Horman said.

The governor’s office has also reached out to an independent audit firm that could examine what went wrong, Division of Financial Management administrator Alex Adams said.

“I do realize that a lot of these issues can happen with transitions of personnel,” said Senate Finance vice chair Sen. Carl Bjerke, R-Coeur d’Alene.

The committee approved the $2.7 million in additional funds to backfill this budget year. They also revisited HB 700, the Division of Vocational Rehabilitation appropriation for next fiscal year passed earlier in session. The governor signed that appropriation in March.

On Wednesday, the committee chose to redirect funds from that budget meant for employees and office items, including two additional full-time counselors. The funding meant for those positions will instead go toward addressing the budget shortfall.

The agency should still be able to continue services for its clients with the emergency funding. Without the funds, the division would have to implement a selection order based on federal rules.

“We’ll go back in session in January. There’ll still be nearly a whole half of the year for this agency,” Grow said. “Services should be covered as they’ve determined they would be.”

However, Horman pulled the bill from the House floor back to committee later in the afternoon.

“New information has come to light, questioning the accuracy of the numbers we were given in our hearing this morning,” Horman said. “We’re asking for the bill to return to committee so that our staff can get to work on additional verification of the numbers.”

It isn’t yet clear when the committee will have the full picture. Idaho Reports will continue to follow the budget discrepancy.

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