Department seeks fund shifts and clarifies federal compliance for substance use grants

BOISE — Lawmakers reviewed the Department of Health and Welfare’s substance abuse treatment and prevention budget and a request to reassign fund sources so Idaho complies with federal grant administrative limits.

Alex Williamson, budget and policy analyst with the Legislative Services Office, said the division spent about $22.7 million in fiscal 2024, with 76.4% going to trustee and benefit payments. Recent changes include an $8.3 million one-time COVID-relief appropriation in 2022, an $8 million appropriation for a state opioid response grant that was made ongoing in 2024, and one-time prevention funds of $2.5 million in 2024.

For fiscal 2026 the division requested fund swaps supported by the governor: move $533,900 from liquor-control (dedicated) funds to operating (personnel) and move $673,900 from personnel to trustee and benefit payments on the federal fund side. Williamson said the change is intended to bring Idaho into compliance with new federal guidance after the Substance Abuse and Mental Health Services Administration placed Idaho on a corrective action plan for exceeding a 5% cap on administrative/personnel spending under the substance use block grant.

“...the federal organization doesn't necessarily have a preference on how much is spent, just how much of the funds that they allot, are spent on administrative costs,” Williamson told the committee. The department is asking to swap fund sources so staffing remains in place while federal funds shift to direct services.

Senator Cook questioned whether the swap was a cosmetic accounting fix after the state was “slapped” for exceeding administrative limits. Williamson and Director Alex Adams said the department is constrained by statutory appropriation language that prevents internal transfers without legislative approval and that the swap is intended to preserve staffing while meeting federal compliance requirements.

Director Adams and staff described the department as a pass-through for certain settlement and Millennium Fund obligations, noting the department had limited operational oversight over how some grant dollars are used. Adams said some opioid settlement-funded projects, such as the Boise State collegiate recovery program, were administered outside the department, and that DHW’s role was to distribute those pass-through funds.

No vote was taken. Officials said they would provide follow-up documentation about program performance and about how the requested fund swaps would affect federal compliance and service delivery.

Ending — Committee members requested additional written materials on federal corrective-action requirements, the precise accounting of the fund swaps, and program-level performance data for prevention and recovery services funded by opioid settlement and Millennium funds.