by Logan Finney, Idaho Reports

Financial uncertainty that recently came to light at the Idaho Division of Vocational Rehabilitation turned out to be too complex for legislators and staff to untangle in the waning days of the session.

Director Jane Donellan told the Joint Finance-Appropriations Committee last week her agency, which coordinates job training to help disabled Idahoans in the workforce, unexpectedly ran out of spending authority for the fiscal year and was unable to pay vendors for their services.

The budget setting committee quickly advanced a supplemental appropriation, but then pulled it back as more uncertainty and unanswered questions came to light.

House Appropriations Committee chair Rep. Wendy Horman, R-Idaho Falls, told Idaho Reports on Wednesday that lawmakers did not act due to an “inability to verify” division finances, with discrepancies between internal state reports as well as invoices that vendors provided them.

Donellan told Idaho Reports in a statement Friday her request last week was for additional spending authority to use federal funds available to the agency and related matching funds from the state.

“The Division has been thoroughly evaluating its fiscal practices and processes to determine the root cause of this significant fiscal issue. We have a better understanding of the complexities between managing Federal and State program funds,” Donellan wrote.

The director confirmed Vocational Rehabilitation will continue providing services this fiscal year.

“The Division is rigorously evaluating the impact to our customers moving forward into State Fiscal Year 2025 and beyond. We plan to keep the Governor’s office and LSO apprised of our progress moving forward. My commitment is to remedy this critical financial issue to have the least amount of impact to individuals with disabilities as well as the businesses and governmental entities that support them,” Donellan wrote. “Furthermore, the Division has initiated the independent audit of the agency as directed by the Governor’s Office.”

Although unable to verify specifics yet, lawmakers believe the existing budget will suffice for now.

Keith Bybee, budget manager for the Legislative Services Office, laid out the latest available numbers about the IDVR budget situation in an email to the JFAC co-chairs on Wednesday.

“As of today, April 10, 2024, the Division of Vocation Rehabilitation has $1,870,328.29 remaining of the total appropriation of $10,862,100 in trustee & benefit payments. The division has identified $550,000 of personnel costs available to use for trustee & benefit payments which brings the total available to $2,420,328,” Bybee wrote.

The division has enough spending authority left over to cover the final quarter left in the fiscal year, LSO believes, even if remaining vendor costs come in above projections. They can also delay some payments until the start of the new fiscal year, if necessary. The state fiscal year ends on June 30.

“Quarter 4 expenditures for the past four years have averaged $1,597,619 in trustee & benefit payments, with last year being the highest value at $2,095,872. If expenditures are 15.5% greater than the highest value of the previous 4 years, they have sufficient appropriation to cover those costs,” Bybee wrote.

Horman told Idaho Reports the difficulty in verifying the information is possibly related to the state’s new accounting system, called Luma.

“It’s time to start auditing these budgets and going through some of this process,” House Speaker Mike Moyle, a vocal critic of the Luma system, told reporters at a press conference after adjournment. His comments were directed at Luma in general, not the Division of Vocational Rehabilitation.

“Some of our agency heads are saying they don’t have the information they need. The balances don’t match,” said Moyle, R-Star. “If they don’t get this thing working, to make these budgets and everything happen, then we’ve got problems.”

The new business system has been plagued by issues since its implementation, the Idaho Capital Sun has reported, such as delayed revenue reports and payments to agencies and grant recipients.

“The original excuse was that our state employees aren’t competent enough to run this, basically. Which is a bunch of garbage,” Moyle said. “They’re great people. They’re not stupid. This system is not broken because they can’t figure out how to work it – it’s broken because it’s not working.”

“Now, I know they’re trying to adjust it, and hopefully they’ll get those bugs out,” he added. “But you know, we’ve only got a couple more months left.”

Disclosure: Idaho Public Television is an agency of the State of Idaho.

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