Appropriations panel hears DHHS budget overview, FTE block‑grant and staffing data

Interim Health and Human Services Commissioner Dirk Wilke told the House Appropriations subcommittee on Human Resources that the department's biennial salary appropriation is about $551,700,000 and that the agency has been operating under an FTE "block grant" pilot that gives HHS flexibility to manage hiring and repurposing positions across the agency.

The pilot was approved in the 2023 session and removes a fixed head‑count cap for the department, so HHS manages to a single salary appropriation rather than a fixed total of authorized FTE. "The block grant includes all compensation over time, bonuses paid, promotional increases, health insurance premiums," Deputy Commissioner Sarah Stolt told the committee, summarizing how the department counts total personnel costs.

Why it matters: Committee members pressed for granular detail because HHS manages roughly $5.7 billion overall, of which about $551.7 million is the salary and benefits pool; roughly $4.8 billion flows out to vendors and providers. Changes to HHS staffing and how vacancies are used affect Medicaid payments, long‑term care, behavioral health and other services paid through federal, state and special funds.

Overview and numbers

Wilke gave a headline view of the department's organization and priorities and described the FTE block‑grant approach as a response to workforce volatility and specialized staffing needs. HHS told the committee the approved technical FTE figure from the 2023 appropriation is 2,581.83 FTE. Department witnesses said the number of filled positions hovers around 2,400 and that, as of a December 1 snapshot provided to legislative staff, there were roughly 374.63 vacant FTEs in various phases of recruitment and fill (classified, posted, interviewing, offer pending, new hire not yet started).

Stolt outlined four categories the department uses to allocate block‑grant authority: A) converting long‑term temporary employees to permanent FTE; B) filling or repurposing basic vacancies; C) short‑term/emergency temps and interns; and D) repurposing multiple FTEs or creating new positions where demand or acuity requires it. She said an internal FTE committee reviews requests to repurpose or create positions and that the committee includes the HHS chief human resources officer, the CFO, the interim commissioner and the deputy commissioner.

What HHS reported the committee has approved since the block‑grant began: - 50 long‑term temporary positions in behavioral health repurposed at the start of the block‑grant implementation; - 50 additional long‑term temps transferred to FTE early in the pilot; - 92.5 new FTE approved and in various stages of fill across divisions; - 56 new FTE specifically approved for behavioral health.

HHS told the subcommittee that roughly 109 vacant positions were in classification, 112.5 were posted and actively recruiting, 43 were in the interview phase, 16 had offers pending and about 80 were filled but hires had not yet started (December 1 snapshot). HHS also reported 11.7 position numbers planned for deletion and three positions subject to a federal hiring freeze (Disability Determination Services).

Committee requests and oversight

Committee members repeatedly asked HHS to provide a division‑level accounting of how the block grant has been used, including: the number of long‑term temps converted to FTE by division; a listing of repurposed positions and the net origin/destination (for example, positions moved from LSTC or other facilities into the state hospital); how much of the block‑grant salary pool is funded from general fund versus federal and special funds; and a breakdown of revenue‑generating positions. Chairman John Nelson said the committee expects a cumulative total showing how much salary appropriation was effectively unspent or reallocated from vacancies across state agencies for the last biennium and asked HHS to supply that detail.

Donna Ochland, HHS chief financial officer, told members the department staffs roughly 75 people in the central finance team and that finance and HR currently track repurposings and transfers manually (spreadsheets) because the agency's HR systems do not capture all repurpose details automatically. Ochland said the department will provide the requested financial reconciliations and a projection of the salary roll‑up going into the next biennium.

Audits, projects and other items discussed

Wilke and staff summarized recent audit findings and said HHS would present division‑level audit detail later in the hearings. The agency listed one‑time projects carried forward from the prior biennium, including the new state public health laboratory (building and design), several IT projects (including a child support system and grants/contracts technology), behavioral health facility grants and other one‑time appropriations.

Deputy Commissioner Stolt described operations and administration functions (finance, HR, legal, communications, facilities and IT governance) and highlighted two federally funded programs that live administratively in the deputy commissioner's office: refugee resettlement services (about 800 newcomers resettled in 2024, with roughly 400 placed into employment) and the State Council on Developmental Disabilities (a federally funded council that awards small grants and advocacy training). Stolt and Ochland said the Governor's budget will publish administration requests on the governor's release date and that the department will return with more detailed reports to the committee.

What the committee will do next

Members said they expect HHS to deliver the division‑level breakdowns before detailed budget deliberations begin. Wilke and staff said they would provide the committee: a division breakdown of conversions from temp to FTE; a listing of repurposed positions and their originating budget lines and fund sources; a breakdown of vacancies by division with the five recruitment phases; and a funding mix (general/federal/special) for the salary pool. The department said it will present operations detail in follow‑up sessions and planned to provide additional numbers as soon as the governor's executive budget is released.

Ending

The subcommittee recessed for a scheduled break after receiving the overview; HHS staff were scheduled to present public health and division detail later in the week. No formal motions or votes were recorded during the overview. The committee asked for follow‑up reports on FTE conversions and the dollar impact of vacancy churn to support future appropriations oversight.